Chairman Paul Ryan recently released his House Budget to the Congressional Budget Office. It encompasses changes to Medicare, Medicaid, the major 2010 health care legislation, other government spending and tax law.
Under Ryan's budget, beginning in 2022 Medicare would end the current Medicare program for all Americans born after 1956 and be replaced by a "premium support payment" (but still called Medicare). It also would increase the age eligibility by increasing the age by two months each year until it reached 67 years of age in 2033. Eligibility for the traditional Medicare program would remain for people who were 55 years of age or older at the end of 2011. In 2022 these same people would have the option of going to the "premium support" system if they choose.
The "premium support payment" is a voucher-like program whereas enrollees would receive some type of premium to help them purchase private health insurance. The premium support payments would then go directly to the private insurance company that people selected. Premium support payments would vary depending on the health status of the beneficiary. The premium support payments to enrollees also would vary based on a person's income. This could result in significant out-of-pocket costs over the premium allowed for very ill people.
Ryan's budget also modifies Medicaid beginning in 2013 by converting the federal share of all Medicaid payments into block grants and allocated to the states. The total dollar amount of the block grant would increase only based on population growth and the growth in the consumer price index; however, beginning in 2022, these block grants would be reduced to exclude projected spending for acute-care services for elderly Medicaid beneficiaries.
Here is a word on revenues and taxation in the budget that I find interesting: The instructions given to the CBO to evaluate the budget proposal specified revenue of 19 percent of gross national product, which is above the current level of about 15 percent of gross domestic product, and slightly above the 30-year historical average of 18.2 percent of GDP. "The Path to Prosperity" budget states separately that income tax rates would be lowered, and selected tax expenditures such as deductions, exemptions and subsidies would be eliminated. As to Social Security, the CBO states that there are no changes in the proposal to the baseline. The CBO has stated that the spending on the Social Security program is projected to be relatively stable as a share of GDP from 2030 forward.
I encourage all seniors to watch this House budget proposal closely and send any questions or concerns to Rep. Ryan. This budget is more far-reaching than what I have endeavored to highlight here, so stay informed.
As offered before, you can obtain a copy of the entire senior issues voting record for 2011 for both the House and Senate by calling me at 775-224-0904 and requesting a copy of the Alliance for Retired Americans special report on legislation vital to retired persons. Stay tuned.
• Janice Ayres is immediate past president of the Nevada Senior Corps Association.