The deepest cuts in the Republicans’ 2012 budget proposal come from programs that serve the poor, including nutrition, student loans, and especially healthcare. In one of the most sweeping changes, the budget plan would gut Medicare and Medicaid programs by turning Medicare from a guaranteed benefit into a system in which private insurers cover elderly Americans, and cutting $800 billion from Medicaid by turning it into a state block grant program. Medicare now pays most of the healthcare bills for 48 million elderly and disabled Americans, and polls suggest that Americans overwhelmingly oppose the cuts. We speak to Joe Baker, president of the Medicare Rights Center, and Elisabeth Benjamin of the Community Service Society of New York. [includes rush transcript]
JUAN GONZALEZ: The biggest cuts in the GOP’s 2012 budget proposal announced this week come from programs that serve the poor, including nutrition, student loans, and especially healthcare. In one of the most sweeping changes, the budget plan guts Medicare and Medicaid programs.
Representative Paul Ryan, the Wisconsin Republican who chairs the House Budget Committee, drafted most of the plan. His proposal would turn Medicare from a guaranteed benefit into a system in which private insurers would cover elderly Americans. The federal government in turn would subsidize their premiums. Ryan proposes cutting $800 billion from Medicaid by turning it into a state block grant program.
Earlier this year, in the GOP response to President Obama’s 2011 State of the Union address, Representative Ryan defended cutbacks on social spending.
REP. PAUL RYAN: We are at a moment where if government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.
JUAN GONZALEZ: Medicare now pays most of the healthcare bills for 48 million elderly and disabled Americans. Polls suggest that Americans overwhelmingly oppose cuts to Medicare and Medicaid. Healthcare advocates say the proposal would shift more medical costs to older Americans, while the block grant proposal for Medicaid would lead to reduced benefits and make fewer people eligible for the program.
AMY GOODMAN: To discuss this further, we’re joined by two major healthcare advocates. Joe Baker is president of the Medicare Rights Center. We’re also joined by Elisabeth Benjamin, vice president of Health Initiatives of the Community Service Society of New York.
Let’s begin with Medicare, Joe. What is being proposed?
JOE BAKER: Well, the math is really quite simple: the consumers pay more, and the government pays less. And as Juan was saying, the way this works is we end Medicare as we know it today, no more guaranteed benefits. You get a subsidy to go out in the private market and buy a private insurance plan. And, you know, the trick is, as it were, is that the government voucher amount doesn’t keep up with medical inflation. So, through the years, you have to, as a consumer, put more and more of your money into that voucher or add to that voucher to get a decent plan.
The other thing, of course, is that we’re going to be paying for administrative costs for insurance companies. Medicare is a very efficient program. It has administrative costs of about three to five percent right now. Insurance companies, you’re lucky if you see them with administrative costs at 15 percent; most are in the 20s and even higher. So, we’re going to be paying for that.
And then, of course, there’s the utilization management, or the kind of rationing, if you will, that health plans sometimes engage in. And so, people are going to be paying out of their pocket for care that’s denied.
So we’re really moving from a place where the government is saying, "We’re going to guarantee a certain level of benefits for our older folks and people with disabilities," who really need that healthcare — they are most vulnerable — and who have very flat incomes. I mean, they’re living on Social Security. About half of people with Medicare right now — and this isn’t going to change in the future — are living at about $21,000, $20,000 or less a year in income. They’re already paying $4,000 to $5,000. And CBO estimates and others estimate that that could double under this plan. So we’re talking about half your income going to healthcare in the future for a lot of people with Medicare, and that’s just unsustainable for them. They’re really not going to be able to get the care.
JUAN GONZALEZ: The way the system works now, basically, the government pays for healthcare costs, but — of the Medicare retirees, but pays a — but, in essence, controls the charges, because it says, "We will only pay this amount for this service."
JOE BAKER: That’s right. That’s right.
JUAN GONZALEZ: So, what they’re doing now is basically saying the government is going to control its costs —
JOE BAKER: Right.
JUAN GONZALEZ: — but not going to do anything about the increase in healthcare costs that people face generally.
JOE BAKER: Right, you’ve got it. I mean, basically, what the government is saying, you know, "We give up trying to control healthcare costs. We’re going to leave it to consumers, and we’re going to leave it to the people that are least able to really influence those costs, and, you know, not take any responsibility for that." The real problem with this program — and there’s a number of them, and we’ll discuss those, but — is that, you know, there is nothing that really gets at the core of the problem, which is rising healthcare costs. The Accountable Care Act, which was passed, does start to get at some of those delivery system and other kinds of reforms. This proposal, the budget proposal, does nothing in that regard, actually repeals the Affordable Care Act. And so, we’re taking a step way back and putting this on the backs of consumers.
AMY GOODMAN: Elisabeth Benjamin, Families USA just named you "Consumer Health Advocate of the Year." It sounds like you have your work cut out for you. You especially work on the issue of Medicaid, among other issues. First explain who gets Medicaid and then what will Ryan’s proposal do?
ELISABETH BENJAMIN: Sure. Seventy million Americans get Medicaid. So, who does it cover? It covers one out of every three childbirths in America. So a third of all babies are delivered onto Medicaid. And that’s a good thing, because if you’re a baby born onto Medicaid, you get Medicaid for the first year of your life, which means you get your vaccinations, you get your well child visits, you get everything. So that makes babies safe and healthy, so that we have, you know, good and productive folks in our society. So, what they’re trying to do is block grant it, which means they’re just turning a lump sum over to the states, and then they’re capping those block grants over time, which means that we’re going to get even less and less money over time.
The problem is, is that Medicaid is the program when we have recessions. So, for example, we just helped a young woman named Sarah. She had a job. She got laid off in the recession. She was pregnant. Her health insurance from her job ran out. What stepped in to make sure — if you tried to go out and buy health insurance on the open market when you’re pregnant — ehh, pre-existing condition, you’re pregnant, can’t have health insurance. She went to Medicaid, was able to get Medicaid. Baby delivered — safe, sound. You know, baby has vaccinations for their first year of life. Sarah’s maternity visit is all paid for. That’s what we need.
But one thing people always say about Medicaid is, "Oh, well, that must be very expensive. We can’t really afford as a society to put people onto Medicaid." The problem with that argument is that Medicaid is 27 percent cheaper in providing care than any other insurance product out there for children and 20 percent cheaper for adults. So this is a, you know, lean, mean fighting machine, if you will, of healthcare. It is the backbone of not only our current system, but it will also be sort of the backbone or the ectoskeleton or the endoskeleton of the future system, in the sense that what the Affordable Care Act, what health reform does is build on this successful program. Another 16 million people will be able to get health insurance, to the very, very poor. We’re talking about people with $15,000 a year in income. And then it has — the Affordable Care Act further will provide subsidies up to 400 percent of poverty or, for example, $80,000 for a family of four.
Both of those provisions are gutted by the Ryan proposal. So, we will go from our current system of having 50 million uninsured to even more uninsured, as opposed to, in 2014, we were about to drop our uninsurance rates by 32 million people. If we get people into the system, we can start controlling costs, and we can have a rational system. Right now the system is irrational.
JUAN GONZALEZ: And what would be the impact on states and the dangers for states to suddenly get their money in a block grant instead of getting it through the existing Medicaid system?
ELISABETH BENJAMIN: There’s three horror scenarios. The first one, we get another recession. What happens during recession is Medicaid is a safety net, people get laid off, they go to Medicaid, and they’re able to get coverage. That’s number one.
Number two, we have epidemics. AIDS, for example, was a classic example, where AIDS stepped in the void — when we had an epidemic, the Medicaid system stepped into the void of provided people necessary coverage. Same thing with whether we have more flu epidemics or whatever. You need a social safety net of healthcare to prevent people from being exposed to other epidemics and to be cared for when they get sick.
And then, finally, you know, what happens is we often get these blockbuster drugs. You know, they come along to help whatever, chronic diseases and whatever. And so, we need Medicaid as a system to be able to bulk purchase those drugs so that we are less vulnerable to those costs.
JUAN GONZALEZ: And the prospects of this Republican proposal getting through Congress or the sense whether the Democrats will compromise to some degree on some aspects of this to get a budget through next year?
ELISABETH BENJAMIN: It would be insane for the Democrats to compromise on this. This guts exactly what they achieved last year. You know, we have passed health reform for the first time in the last century. This is not only undoing health reform, which, like it or leave it, it’s at least a pathway to getting people covered in America, it’s also undoing the Great Society and the Depression-era programs. I mean, it’s getting rid of Medicare, essentially —
JOE BAKER: Right.
ELISABETH BENJAMIN: — and it’s getting rid of Medicaid. Those are the major efforts that we’ve done to sort of fight health problems.
AMY GOODMAN: And yet, when you look at the polls, Joe Baker —
JOE BAKER: Yes.
AMY GOODMAN: — a Kaiser Family Foundation poll conducted in early January found 47 percent of Americans don’t want to see a reduction in Medicaid; 56 percent said they felt that way about Medicare; an even greater number, 64 percent, did not support a change in Social Security.
JOE BAKER: Right, right. So, I mean, I think the popular sentiment is actually with these programs.
AMY GOODMAN: We don’t see that reflected in the media.
JOE BAKER: No, we don’t, actually. And I don’t know why that is. It’s unfortunate. I mean, these programs are widely popular across the country, particularly Medicare — and Medicaid, because, as Elizabeth knows, about a third of Medicaid costs go to cover long-term care for people with Medicare. Many families are struggling with long-term care. There really is no viable coverage out there except for the Medicaid program. People try to keep their loved ones by their side in their homes as long as possible. Medicaid allows that with home care. And, you know, if needed, it pays for nursing home care. So, you know, these programs, people know they’re needed. They want to see the deficit reduced. They may want to see other programs funded. But they know they don’t want cuts in these programs, because they see them as a lifeline and a safety net.
JUAN GONZALEZ: And would these proposals affect not only future recipients of Medicare and Medicaid, but the current recipients, as well?
JOE BAKER: Well, the current recipients of — under this Ryan plan, the current recipients of Medicare and those that are 55 and older would not see a change to their Medicare program. It’s really those 55 and under. So, you know, those of us who are 55 and under — I still count myself among them — have to kind of get organized here and think this through. But once again, you’re going to have a program, you know, that’s going to wither on the vine, as it were, as Newt Gingrich said. You know, it’s going to die off. So, that’s a weakening program. So even if you’re a senior today and you’re going to keep with the old — you know, the traditional Medicare program, that program isn’t viable in the out years. And so, I think we need to understand that. If we’re really going to pierce the safety net in this way, it’s going to render the whole thing useless.
AMY GOODMAN: Very quickly, Elisabeth, how are people organizing?
ELISABETH BENJAMIN: Well, there’s — you know, people are writing to their members of Congress. That’s the number one thing you can do. You must call Congress, must call — doesn’t matter if you have a Republican or a Democratic member. Call them and let them know. We need the Democrats to stand strong. These programs can’t — you know, hands off these programs. These are our healthcare programs. We want them. We want more of them.
And then, the second thing you can do is also let the Obama administration know. We don’t want them to cave at the last minute, after we’ve shored up Congress. So, there’s numbers to call the White House. There’s numbers to call Congress. We can put that on the website on Democracy Now! and get those to you right away.
AMY GOODMAN: Well, I want to thank you both very much for being with us, Elisabeth Benjamin, vice president of Health Initiatives at the Community Service Society of New York, and Joe Baker, president of Medicare Rights Center, also here in New York.