By Sam Baker - 03/20/12 05:13 PM EDT
CBO said it’s possible that seniors would face higher costs under the Ryan plan, and said other possible side effects include “reduced access to health care; diminished quality of care; increased efficiency of health care delivery; less investment in new, high-cost technologies; or some combination of those outcomes.”
CBO emphasized that its initial analysis of Ryan’s policies is not an official cost estimate. The loose estimate was not based on firm legislative proposals, but rather on policy scenarios that Ryan’s staff asked CBO to evaluate. CBO also used Ryan’s assumptions of government revenue and spending.
CBO compared those scenarios to its own estimates for the existing Medicare program, including estimates that assume Congress will continue to avoid certain automatic Medicare cuts. By 2030, average government spending on each new Medicare enrollee would be about $2,000 less under Ryan’s plan than the status quo. In 2050, Medicare’s per-person spending would be about 42 percent lower under Ryan’s proposals.
Under the same assumptions — the existing program remains in place and Congress doesn’t let certain cuts take effect — Medicare would account for 5 percent of the gross domestic product in 2030. The Ryan plan would cut that to about 4.25 percent, CBO said.
Ryan’s new Medicare program would not take effect immediately, so its savings would grow over time as more seniors enter the new system. By 2050, according to CBO, Ryan’s plan would hold Medicare spending to 4.75 percent of GDP, compared with 7.25 percent if the existing program remains intact.
Ryan’s budget proposal also calls for deep cuts to Medicaid and the Children’s Health Insurance Program. And it would repeal President Obama’s healthcare law, which provides subsidies to help low-income people buy private insurance.
The proposals that Ryan asked CBO to analyze would cut spending on those three programs in half over the next 10 years. Federal spending would fall by more than 75 percent by 2050.
CBO said it’s hard to predict how states would respond to Ryan’s proposals for Medicaid, which would determine how many people the program would cover. But the number of uninsured would be “much higher” without the subsidies in Obama’s healthcare law, according to CBO’s analysis.