The Path to Prosperity

History

Key features

Medicare and Medicaid changes

• Medicare: Starting in 2022, the proposal would end the current Medicare program for all Americans born after 1957 and replace it with a new program which uses a voucher and would increase the age of eligibility for Medicare:
• * Starting in 2022, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2033.
• * After 2022, the current Medicare program ends for all people who have not already enrolled. People already enrolled in the current Medicare program prior to 2022 would continue to receive the program. New enrollees after 2022 would be entitled to a voucher to help them purchase private health insurance.
• * Beneficiaries of the voucher payments would choose among competing private insurance plans operating in a newly established Medicare exchange. Plans would have to insure all eligible people who apply and would have to charge the same premiums for enrollees of the same age. The voucher payments would go directly from the government to the private insurance companies that people selected.
• * The voucher payments would vary with the health status of the beneficiary. For the average 65-year-old, payment in 2022 is specified to be $8,000, which is approximately the same dollar amount as projected net federal spending per capita for 65-year-olds in traditional Medicare in that year.
• * Each year, the voucher payments would increase to reflect increases in the consumer price index and the fact that enrollees in Medicare tend to be less healthy and require more costly health care as they age. They would not increase by the higher, healthcare inflation rate.
• * The voucher payments to enrollees would also vary with the income of the beneficiary. The wealthiest 2% of enrollees would receive 30 percent of the premium support amount described above; the next 6% would receive 50 percent of the amount described above; and people in the remaining 92% the income distribution would receive the full premium support amount described above.
• * Eligibility for the traditional Medicare program would not change for people who are age 55 or older by the end of 2011 or for people who receive Medicare benefits through the Disability Insurance program prior to 2022. People covered under traditional Medicare would, beginning in 2022, have the option of switching to the voucher system.
• The proposal would modify Medicaid as follows:
• * Starting in 2013, the federal share of all Medicaid payments would be converted into block grants to be allocated to the states. The total dollar amount of the block grants would increase annually with population growth and with growth in the consumer price index.
• * Starting in 2022, Medicaid block grant payments would be reduced to exclude projected spending for acute care services for elderly Medicaid beneficiaries.
• * States would have additional flexibility in designing their programs.

  Repeal of 2010 health care legislation

• 2010 Health Care Legislation: The Republican proposal would make several changes to the 2010 Patient Protection and Affordable Care Act and the health care provisions of the Health Care and Education Reconciliation Act of 2010.
• * In general, key provisions of those laws that deal with insurance coverage would be repealed, including:
• ** Repeal the requirement that most legal U.S. residents obtain health insurance;
• ** Repeal the establishment of health insurance exchanges and subsidies for some individuals and families who purchase coverage through the exchanges;
• ** Repeal the expansion of Medicaid coverage to include most nonelderly income below 138 percent of the federal poverty level;
• ** Repeal penalties on certain employers if any of their workers obtain subsidized coverage through the exchanges; and
• ** Repeal tax credits for small employers that offer health insurance.
• * The proposal would repeal the Community Living Assistance Services and Supports Act program for long-term care insurance, as well as a number of mandatory grant programs including funds for so-called high-risk pools, reinsurance for early retirees, and prevention and public health activities.
• * The proposal would repeal the provisions that created the Independent Payment Advisory Board, which has the explicit task of reducing the rate of growth in Medicare without affecting coverage or quality.
• * Canceling the expanded subsidies aimed at closing the "coverage gap" in Medicare Part D, the so-called "Medicare doughnut hole." The gap is a range of spending in which many Medicare beneficiaries are financially responsible for the entire cost of prescription drugs until the expense reaches the catastrophic coverage threshold.

  Other healthcare reforms

• Tort reform: Several changes would be made to laws governing medical malpractice, including putting in place limits on noneconomic and punitive damages.

  Other spending cuts

Revenues and taxation

Social Security

Public opinion