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House Budget Committee FY2012 Budget Proposal

The House Budget Committee’s 2012 budget proposal makes recommendations for Medicare and Medicaid spending that largely shifts the burden of the costs from the federal government to beneficiaries.

The proposal calls for converting the matching payments that the federal government currently makes to states for Medicaid costs into a block grant of fixed dollar amounts. The amount of the grants would grow over time to reflect inflation. However, according to the non-partisan Congressional Budget Office:

Under the proposal, states would have additional flexibility to design and manage their programs to achieve greater efficiencies in the delivery of care. Because of the magnitude of the reduction in federal Medicaid spending under the proposal, however, states would face significant challenges in achieving sufficient cost savings through efficiencies to mitigate the loss of federal funding. To maintain current service levels in the Medicaid program, states would probably need to consider additional changes, such as reducing their spending on other programs or raising additional revenues. Alternatively, states could reduce the size of their Medicaid programs by cutting payment rates for doctors, hospitals or nursing homes; reducing the scope of benefits covered; or limiting eligibility.

The CBO goes on to say that a dramatic reduction in state spending would likely result in more limited access to care and higher out-of-pocket expenses for beneficiaries.

The Center for Economic and Policy Research released a paper last Wednesday analyzing the 2012 budget plan. The brief uses cost projections provided by the Congressional Budget Office to predict costs for Medicare beneficiaries over the next 40 years should the House Budget Committee’s plan be enacted. The CEPR projects that under the plan, a vast majority of Americans will not be able to afford the Medicare equivalent program by year 2030.

While the budget proposal ultimately takes aim at America’s budget deficit, it comes at a high cost for most Americans, including children. According to an NBC/Wall Street Journal poll conducted earlier this year, the majority of Americans are opposed to cuts to Medicare.

For further reading on the House Budget Committee’s proposal and its attempts at entitlement and welfare reform, click here and here.

If you’d like to take action to oppose the budget proposal, visit the Coalition on Human Needs website for ideas and resources.Show all


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