House-Proposed Budget Cuts Would Dismantle Medicare, Medicaid

Planned Reliance on Private Insurance Will Hurt Seniors and Neediest

B’nai B’rith International is deeply troubled by the U.S. House of Representatives budget proposal for 2012 released April 5, that would drastically cut—and fundamentally damage—important health programs Medicaid and Medicare.  These are programs on which millions of vulnerable Americans rely for help meeting their most important and least affordable need: health care.   

The proposed budget does not control health costs or encourage efficiencies in the broader health care system; it simply relies on dramatic cuts, with a staggering impact on the elderly. By making Medicaid a block grant while creating a decreasingly valuable Medicare voucher, this bill would deal a devastating double-blow to older adults as well as the disabled.

This proposal would end the guaranteed Medicare coverage as we know it for the next generation of seniors (starting in 2022, which impacts those born since 1957) and replace it with a voucher to buy health care in the private insurance market—a market with a poor track record of providing affordable, quality health insurance to older people.  Even more troubling, these vouchers would not keep pace with the rising cost of all health care, about which this plan does nothing.

In order to reduce deficits, the budget proposal would transform Medicaid into a block grant program while dramatically reducing the federal contribution to the program. This would no longer allow the program to expand based on the number of qualified people in need. Rather, it saves money simply by offering reduced benefits or covering fewer people. “Anyone can cut the budget by arbitrarily capping programs,” said Allan J. Jacobs, B’nai B’rith interim international president. “The real challenge we face is to reduce the deficit without decimating help for the neediest among us, or making retirement impossible for the next generation. This means we must be straightforward with one another about how we are saving money. Unfortunately the savings in this budget seem to come simply from doing less for the people who need the most.”   
    
B’nai B’rith is disturbed and frankly surprised by the attempt to privatize Medicare. Past experiments with privatization in Medicare have not saved money. Instead, they have created additional spending and unnecessary confusion without providing better health outcomes.    

“Adding private plans into the mix has already created a highly confusing maze through which the elderly must wade, especially in Medicare Part D, without providing savings to the government or better choices for the consumer,”  B’nai B’rith Director of Aging Policy Rachel Goldberg, Ph.D., said. “The savings in this budget come not from theoretical-but-never-realized-efficiencies of the private market, but by cutting the amount spent per beneficiary.”

B’nai B’rith is also troubled by the peculiar references to Social Security in this budget proposal, including certain “triggers” that would be created to “force” action on Social Security.  As in 1983 (the last time major reforms of Social Security were made) changes to make Social Security stronger can and should be made by experts and policymakers working together, with Social Security solvency and sufficiency as their goal. These triggers are not an appropriate mechanism to replace responsible actions.  

B’nai B’rith is fully aware of the steep deficits this nation faces. But blind cuts that don’t take into account  long-term consequences could lead to greater expenses as more and more people fall through our valued and needed social safety nets.