Path to Prosperity?

            A couple weeks ago, the GOP rolled out its 2012 budget proposal, Paul Ryan’s “Path to Prosperity,” which did a huge favor for the Democratic Party and the increasingly diminishing number of Americans to whom facts and logic are things to be admired, not sneered at and twisted.  It put in plain black and white what the Republicans have advocated in oblique ways for 30 years—the party’s desire to see this country become a plutocracy where big money, whether corporate or individual, rules the day.

            Specifically, the GOP proposes to reduce the budget deficit dramatically by cutting 4.3 trillion dollars in spending over the next ten years.  Never mind that the actual budget deficit reduction would be more on the order of 1 billion dollars when you factor in the 4.2 trillion dollars in tax cuts—well over 90% of which would go to wealthy individuals and corporations—over the same period.

            The kicker is that fully 2/3 of the spending cuts come from programs aimed at ordinary Americans.  Those programs range from education to assistance for the poor to infrastructure renewal to job training to regulatory agencies to health care.  Among the things not cut are defense spending or corporate welfare—though, to be fair, the Ryan budget does cut ethanol subsidies.

            Not surprisingly, since virtually every Republican in Congress signed Grover Norquist’s pledge to never raise taxes, obvious deficit reduction opportunities like income taxes on the wealthy, estate taxes, capital gains taxes and corporate taxes are not anywhere to be found in the Path to Prosperity.

            Nowhere however is the disparity between the sacrifice Ryan’s budget demands from the less fortunate and what it demands from the most fortunate more apparent than in the area of health care.  The Path to Prosperity takes dead aim at health care programs for Americans at both ends of the spectrum—children and senior citizens.

            Let’s look at the senior citizen aspect first.  Here the target is Medicare.  Amazingly, to me at least, when Ryan first presented his budget proposal, even normally left-leaning media like the Washington Post and the New York Times hailed it as a “courageous” action that finally put one of the bigger elephants in the room on the table.  I can only assume that the editorial boards of both papers reacted to the fact that the words “Medicare” and “overhaul” appeared in the same sentence, wrote their headlines on that basis, then actually read  what the overhaul would comprise.

            Beginning in 2022, Medicare under Ryan’s plan would stop being an entitlement paying defined benefits.  Instead, seniors would be given what the Path to Prosperity calls “premium support” with which they could purchase private insurance.  The Congressional Budget Office has already released figures showing that a 2022 retiree would face at least $6,400 more in out of pocket payments to acquire private insurance comparable to what Medicare presently offers.

            Who benefits from this proposal?  Clearly, the federal government will be paying way less for senior citizen medical care then it does now, so the federal budget enjoys a benefit.  Clearly also the medical insurance industry will benefit enormously.  2022 will be right near the peak of “baby boomer” retirement, so millions of people will be needing the coverage they now receive from Medicare. 

            Who won’t benefit however is just as clear.  Seniors in the middle and lower income brackets, who frequently have a difficult time handling what Medicare doesn’t pay now, will have the insurance industry’s hand even further in their pockets.  And while the Republican mantra is that insurance companies will be competing so hard for the new business that the cost of insurance will be held down, a reality check would perhaps be in order.  Keep in mind that the Path to Prosperity also calls for a total repeal of the Affordable Care Act—what Tea Partiers like to call Obamacare.

            That means that insurance companies would again be able to refuse coverage, or require grossly inflated premiums, co-payments or deductibles, for “pre-existing” conditions.  Find me a 65 year old who doesn’t have something a health insurer can call a pre-existing condition.  Repealing AFA would also mean insurance companies would again be allowed to raise premiums on anyone who has the temerity to get sick and file a claim.  And, if the claim gets too big, insurance companies would again be free to simply drop you.

            So, would insurance companies compete for all this new business?  Sure, but in the gentlemanly way they do now.  They would all set their premiums at a comfortable profit level for themselves—one which wouldn’t differ more than a dollar or two per month no matter what company you looked at.  They would then all find the same reasons to require your particular insurance policy to be more expensive than the base price. They would continue to pay less or require greater co-payments if you came down with appendicitis while on vacation and had to use an “out-of-network” emergency room to keep from dying.  They would continue, in other words, doing all the things they do now to maximize their bottom line.

            And since there is nothing in the Path to Prosperity to put the brakes on medical cost increases (in fact, there are a couple of things that take the brakes off), nor anything to protect consumers from predatory insurance industry practices, it is safe to assume that out of pocket expenditure for seniors will creep up a bit every year.

            At the other end of the spectrum, the Path to Prosperity would withdraw federal funding for the S-Chip program which provides children from low income families with access to basic medical care.  It would also cut back or eliminate programs that provide pre- and post-natal care for low income women, and most importantly, substantially reduce federal support of state Medicaid programs—which are primarily responsible for what minimal level of health care children and teens from low income families receive.

            When you focus on medical care, there are some really stark differences between the Path to Prosperity and what President Obama proposed in his budget speech.  Both plans trumpet large savings over time in medical care costs to the federal budget.  Interestingly, though hardly surprisingly (see my first paragraph), Ryan proposes using those savings exclusively to reduce the budget deficit.  In fact, those savings are the single biggest item in his proposal.  Granted, there is some vague language about using part of the savings to make Medicare more solvent, but since Ryan is basically calling for the shutting down of Medicare, its solvency becomes something of a moot question.

            The Democrats, on the other hand, propose using most of the savings the Affordable Care Act realizes from Medicare reform to pay for the cost of extending insurance to the 30-odd million people, most of them low income—who don’t have it.

            The President’s proposal also calls for the federal government to provide subsidies to assist seniors in dealing with the “doughnut hole” in Medicare Part D coverage.  The Path to Prosperity ignores that substantial hardship many seniors now face.

            Finally, the President’s speech advocated authorizing Medicare to negotiate directly with drug companies over the price of prescription medicine.  The Veterans’ Administration currently has that authority, and currently pays nearly 40% less for prescription drugs than Medicare is forced to pay.  Enabling Medicare to save 40% on what it pays for drugs would seem an obvious place for budget deficit hawks like Ryan to look for savings, but, strangely, he chose to ignore that one.  Perhaps the fact that Medicare’s savings would come out of Big Pharma’s profits had something to do with it.

            I’ve alluded several times in recent blogs to my growing sense that an ever enlarging segment of the American population is no longer capable of looking at the facts of Republican and Democratic positions on issues that clearly affect them, and determining which set of facts are most beneficial to themselves.   If you are in that top 5 or even top 10 percent of incomes, perhaps what happens to Medicare or S-Chip doesn’t matter.  If you’re anywhere lower on the income scale, what happens to those programs, and what happens with medical costs generally, should very much concern you. 

           

            And the facts with respect to medical coverage are, as one sign holder at a Ryan town hall in Wisconsin put it, that the Path to Prosperity is more like a Road to Ruin.