Romney plan calls for Medicaid block grants, repeal of Obama health law

Republican White House hopeful Mitt Romney said Tuesday he would issue an executive order to slow implementation of the healthcare law on his first day in office if he were elected president. Romney also proposed major changes to Medicaid and said his plan for Medicare will be similar to Rep. Paul Ryan's (R-Wis.) controversial proposal.

The economic plan that Romney released Tuesday is highly critical of President Obama's healthcare reform law, which was modeled largely after the reforms Romney implemented as governor of Massachusetts. Romney's plan says the federal law is a burden to businesses and is contributing to economic uncertainty.

If elected president, Romney said, he would issue an executive order on his first day in office that "directs the Secretary of Health and Human Services and all relevant federal officials to return the maximum possible authority to the states to innovate and design health care solutions that work best for them."

Romney, like all of the GOP contenders thus far, has said he wants to "repeal and replace" the healthcare law. That would require action from Congress.

Romeny's plan also proposes converting federal Medicaid spending into block grants for  states. The federal government currently pays a certain percentage of total Medicaid costs, meaning it spends more when more people need the program. Romney said the switch to a fixed grant amount could save the federal government $200 billion per year.

House Republicans' budget proposal also calls for Medicaid block grants.

Romney's economic plan doesn't directly address the single biggest driver of federal healthcare spending — Medicare. It says current Medicare recipients shouldn't lose their benefits, but that the program isn't sustainable for future generations.

"One option that should not be on the table is raising the payroll tax or expanding the base of income to which the tax is applied," Romney's plan states. "Similarly, with respect to Medicare, the plan put forward by Congressman Paul Ryan makes important strides in the right direction by keeping the system solvent and introducing market-based dynamics. As president, Romney’s own plan will differ, but it will share those objectives."

Ryan has proposed converting Medicare into a sort of voucher system where seniors would get financial help to buy private insurance.

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