The Ryan plan redux.
Article Type: Editorial
Subject: Entitlement spending (Laws, regulations and rules)
Budget deficits (Management)
United States economic conditions (Management)
Vice-Presidential candidates (Economic policy)
Government spending policy
Author: Gorin, Stephen H.
Pub Date: 08/01/2012
Publication: Name: Health and Social Work Publisher: Oxford University Press Audience: Academic; Professional Format: Magazine/Journal Subject: Health; Sociology and social work Copyright: COPYRIGHT 2012 Oxford University Press ISSN: 0360-7283
Issue: Date: August, 2012 Source Volume: 37 Source Issue: 3
Topic: Event Code: 200 Management dynamics; 930 Government regulation; 940 Government regulation (cont); 980 Legal issues & crime; 900 Government expenditures Advertising Code: 94 Legal/Government Regulation Computer Subject: Company business management; Government regulation
Persons: Named Person: Ryan, Paul (American congressional representative)
Geographic: Geographic Scope: United States Geographic Code: 1USA United States
Accession Number: 309792870
Full Text: In the August 2011 issue of this journal, I discussed Representative Paul Ryan's (R-WI) budget proposal, which the House of Representatives enacted in April 2011. It died in the Senate, but at the time I argued that Ryan's bill posed a "serious challenge to the nation's social welfare institutions" (Gorin, 2011, p. 166).

In March 2012, the House of Representatives, largely on a party-line vote, enacted a revised version of Ryan's controversial proposal (see http://thomas.loc.gov/cgi-bin/bdquery/z?d112: HC00112:@@@D&summ2=m&). This bill too died in the Senate. However, Ryan's proposals articulate the Republican vision of where the nation should be heading. A spokesman for Mitt Romney, the presumptive Republican nominee for president, has indicated Romney's support for Ryan's bill, and if the White House and Senate change hands in November, it will likely become law (Simpson, 2012).

The implications and potential consequences of Ryan's proposal are sobering. It would end Medicare as we have known it, shift costs to beneficiaries, undermine traditional Medicare, and increase the program's retirement age. It would also undermine Medicaid and Social Security.

Since its inception, Medicare has guaranteed coverage to older adults; more recently, it has guaranteed coverage to some individuals with disabilities as well. The 2011 version of Ryan's proposal would have eliminated traditional Medicare and given beneficiaries a voucher, or premium support, to buy private health insurance (Gorin, 2011). The 2012 version of the legislation changed this slightly. Beneficiaries would still receive a voucher, but they would now have a choice of buying traditional Medicare or private insurance (Oberlander, 2012). The voucher would be equivalent to the cost of the second-least expensive option in an area (Van de Water, 2012).

Unfortunately, the value of the voucher would be unlikely to increase with the rate of health-care inflation. Beginning in 2023, Medicare spending for new beneficiaries (that is, individuals born in 1958 or after) would grow with the gross domestic product (GDP) plus an additional half percentage point per year (U.S. Congressional Budget Office, 2012). This is "below the rate of growth in health care costs in recent decades" (Greenstein, 2012). To meet the "GDP plus one-half percentage point target," Medicare would be required reduce the purchasing power of the vouchers (Van de Water, 2012). As a result, Ryan's plan would gradually shift the cost of coverage from the government to beneficiaries. By 2050, the federal contribution for a new enrollee would average between 35 percent and 42 percent less than it would under the current system (U.S. Congressional Budget Office, 2012).

It is true that under the latest version of Ryan's proposal, beneficiaries could choose to join traditional Medicare. However, this is somewhat problematic. Because Ryan's proposal would allow private insurers to gear their plans to younger and healthier beneficiaries, individuals in poorer health, "who cost more to serve," would likely become concentrated in the traditional plan (Greenstein, 2012). Although traditional Medicare would be compensated for its less healthy population, the process of "risk adjustment ... is highly imperfect," and it is unlikely that traditional Medicare would be fully compensated for "higher-cost enrollees" (Greenstein, 2012). This would require Medicare to increase its premiums, which would likely accelerate the movement of healthier individuals to private plans and destabilize the traditional plan.

This unraveling of traditional Medicare could adversely affect not only new enrollees, but also people born before 1958, who Ryan has assured would not be affected by his proposal. These individuals could "well face higher premiums and cost sharing for traditional Medicare, a more limited choice of providers, or both" (Van de Water, 2012).

Ryan's proposal would also increase the age of eligibility for Medicare. Beginning in 2023, the eligibility age would increase at the rate of two months a year until reaching 67 in 2034 (Van de Water, 2012). Because the bill would also repeal the Affordable Care Act, which helps extend coverage to many without insurance, it would force "many 65-and 66-year olds" without coverage through an employer to turn to the "poorly regulated individual insurance market that charges older individuals extremely high premiums" (Van de Water, 2012). Individuals with preexisting conditions could find themselves shut out of the market completely. Ironically, because private insurance costs more than traditional Medicare, increasing the Medicare retirement age would increase the nation's overall health care expenditures.

Ryan's bill would also undermine Medicaid, which would become a block grant. Although the 2012 version of the bill is sparse on details, the block grant would likely not keep up with health-care inflation or the "expected increase in the number of Medicaid beneficiaries" due to the aging of the population (Park & Broaddus, 2012). Between 2013 and 2022, the block grant would reduce Medicaid spending by 22 percent from current levels (Park & Broaddus, 2012). This would require states to increase taxes or (more likely) cut badly needed services.

Although Ryan and his supporters have argued that his plan will not affect Social Security, the claim is misleading. The bill may not directly cut Social Security benefits to the extent that it shifts costs to beneficiaries, but many people will have to rely on their Social Security benefits to pay medical expenses--that or forgo needed care.

As stated, in the August 2011 issue, I argued that Ryan's bill posed a "serious challenge to the nation's social welfare institutions" (Gorin, 2011, p. 166). Although the 2012 version of his proposal is slightly different from the earlier one, it too would fundamentally transform social welfare services and programs in this country. As we know, Medicare, Medicaid, and Social Security emerged in response to the nation's failure to meet the needs of its most vulnerable citizens. Whatever their problems and inefficiencies, these programs have served us well and, with relatively minor adjustment, can continue to do so.

Social workers were present at the creation of these programs and have always advocated for and defended them. Representative Ryan advocates a completely different vision, one that is antithetical to the history and values of our profession. We have a direct stake in the outcome of the debate over the Ryan bill, and we should seek to oppose this proposal where we can.

doi: 10.1093/hsw/hls008

REFERENCES

Gorin, S. H. (2011). The new threat to Medicare, Medicaid, and Social Security [Editorial]. Health & Social Work, 36, 165-167.

Greenstein, R. (2012, March 21). Statement of Robert Greenstein, president, on Chairman Ryan's budget plan. Retrieved from http://www.cbpp.org/cms/index. cfm?fa=view&id= 3712

Oberlander, J. (2012, March 22). Paul Ryan's health care fantasy. Health Affairs Blog. Retrieved from http:// healthaffairs.org/blog/2012/03/22/paul-ryanshealth-care-fantasy/

Park, E., & Broaddus, M. (2012, April 12). What if Ryan's Medicaid block grant had taken effect in 2000? Federal Medicaid funds would have fallen over 25% in most states, over 40% in some, by 2009. Retrieved from http:// www.cbpp.org/cms/index.cfm?fa=view&id=3466

Simpson, C. (2012, June 3). Romney "is for" the Ryan plan; Why Wisconsin is important. Atlantic Wire. Retrieved from http://www.theatlanticwire.com/ politics/2012/06/romney-ryan-plan-why-wisconsinimportant/53089/

U.S. Congressional Budget Office. (2012, March 20). The long-term budgetary impact of paths for federal revenues and spending specified by Chairman Ryan. Retrieved from http://www.cbo.gov/sites/defauh/fdes/ cbofiles/attachments/03-20-Ryan_Specified_Paths 2.pdf

Van de Water, P. N. (2012, March 28). Medicare in the Ryan budget. Retrieved from http://www.cbpp.org/ cms/index.cfm?fa=view&id=3731

Stephen H. Gorin, PhD, MSW, is professor, Social Work Department, Plymouth State University, and executive director, NASW New Hampshire Chapter. Address correspondence to Stephen H. Gorin, Social Work Department, Plymouth State University, 17 High Street, Plymouth, NH, 03264-1595; e-mail: sgorin@plymouth.edu.

Advance Access Publication October 9, 2012
Gale Copyright: Copyright 2012 Gale, Cengage Learning. All rights reserved.