Sebelius says reform law takes steps toward entitlement reform

Sebelius said the panel represents "a big step in terms of entitlement reform that actually doesn't potentially cause harm to our seniors." She also noted an HHS effort to create new systems for dealing with people who are eligible for both Medicare and Medicaid. Those patients represent a disproportionate share of the programs' costs.

Opponents of Ryan's Medicaid plan have said services for the so-called "dual-eligible" beneficiaries would likely be the first place states would look to cut under a block-grant program.

Better care for dual-eligibles would also be more effective than allowing states to cut Medicaid eligibility, Sebelius told reporters after the hearing. Republicans have introduced a bill to repeal a provision of healthcare reform that blocks states from making cuts until 2014. The effect on patients wouldn't be worth the "very small" savings projected by the Congressional Budget Office, Sebelius said.

CBO estimated that the bill would save $2.8 billion over five years and $2.1 billion over 10 years.