House Republicans are taking aim at the government’s largest health care programs in their 2016 budget blueprint, which they claim would cut spending by $5.5 trillion over the next decade.
From a complete repeal of Obamacare to overhauling Medicare and transforming Medicaid into block grants, the House GOP’s $3.8 trillion budget plan would balance the budget by 2026.
Related: House GOP Budget Would Wipe Out Deficit in 10 Years
While the budget targets entitlement spending, it boosts defense spending – allocating $613 billion for the Pentagon – well above the president’s budget request of $561 for defense spending.
House Budget Committee Chair Tom Price (R-GA) called the plan “a blueprint that demonstrates how to solve our nation’s fiscal and economic challenges.”
The budget, however, has only a slim chance of approval by the Senate and no chance of being signed by President Obama. Senate Republicans offered their own blueprint on Wednesday, which also promises a balanced budget in 10 years.
Like the House GOP plan, the Senate’s proposal repeals Obamacare and shifts more power to the states. However, it doesn’t include the House’s provision – inspired by earlier proposals from Paul Ryan (R-WI), former chair of the House Budget Committee – to overhaul Medicare. The House provision would allow people 65 and older to choose between government-subsidized private insurance and traditional Medicare.
Related: 5 Gimmicks in the GOP’s ‘Gimmick-Free’ Budget
The Senate and House will have to come together on a deal before the April 15 deadline.
Here are three main ways the House GOP’s budget tackles health care:
1: Gets Rid of Obamacare (saving $2 trillion over 10 years): The House GOP plan would fully repeal the Affordable Care Act – eliminating all of its taxes, mandates and regulations. Scrapping the law would save nearly $2 trillion over the next decade, it estimates.
Rep. Price says the ACA, which the Obama administration claims has expanded coverage to 16.5 million people, would be replaced by a plan to “increase access to quality, affordable health care by expanding choices and flexibility for individuals, families, businesses and states while promoting innovation and responsiveness."
2: Restructures Medicare (saving $150 billion starting in 2024): The plan would restructure Medicare into a “premium support” model beginning in 2024 for new enrollees. Seniors could choose between enrolling in traditional Medicare and receiving a fixed subsidy toward monthly premiums on a private plan. The amount of subsidies would depend on the patient’s health: The sicker the patient, the higher the subsidy. Proponents say this would keep Medicare viable and encourage innovation. Opponents, however, worry the subsidies may not keep pace with medical inflation – causing Medicare enrollees to pay higher out-of-pocket costs.
3: Overhauls Medicaid (saving $900 billion over 10 years): Price’s proposal repeals Medicaid expansion and turns Medicaid into a block grant program for states. Each state would receive a block grant from the federal government for its Medicaid program. States would have more discretion in how they spend the money. The plan would eliminate Medicaid expansion, which currently federally funds states’ expansion programs fully until 2017, then 90 percent after that.
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