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Wednesday, April 20, 2011

Overview of Health Care Changes in the FY2012 Budget Proposal Offered by House Budget Committee Chairman Ryan

Patricia A. Davis
Specialist in Health Care Financing

Alison Mitchell
Analyst in Health Care Financing

Bernadette Fernandez
Specialist in Health Care Financing

On April 5, 2011, House Budget Committee Chairman Paul Ryan released the Chairman’s mark of the FY2012 House budget resolution together with his report entitled “The Path to Prosperity: Restoring America’s Promise,” which outlines his budgetary objectives. On the same day, CBO issued an analysis of the long-term budgetary impact of Chairman Ryan’s budget proposal based on specifications provided by House Budget Committee staff. The House Budget Committee considered and amended the Chairman’s mark on April 6, 2011, and voted to report the budget resolution to the full House. H.Con.Res. 34 was introduced in the House April 11, 2011, and was accompanied by the committee report (H.Rept. 112-158).

A budget resolution provides general budgetary parameters; however, it is not a law. Changes to programs that are assumed or suggested by the budget resolution would still need to be passed by separate legislation. Chairman Ryan’s budget proposal, as outlined in his report, the committee report, and in the CBO analysis, suggests short-term and long-term changes to federal health care programs including Medicare, Medicaid, and the health insurance exchanges established by the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148).

Within the 10-year budget window (FY2012-FY2021), the budget proposal assumes that certain PPACA provisions would be repealed, including those that provide additional coverage under the Medicare prescription drug benefit, that expand Medicaid coverage to the non-elderly with incomes below 133% of the federal poverty level, and those provisions that establish health insurance exchanges. The proposal would also restructure Medicaid from an individual entitlement program to a block grant program beginning in FY2013.

Beyond the 10-year budget window, beginning in 2022, the budget proposal assumes an increase in the age of eligibility for Medicare, the conversion of Medicare to a fixed federal contribution program, and a restructuring of coverage for the elderly under Medicaid.

This report summarizes the proposed changes to Medicare, Medicaid, and private health insurance as described in the House budget resolution, Chairman Ryan’s “Path to Prosperity” report, the House Budget Committee report, and the CBO analysis. Additionally, it briefly examines the potential impact of the proposed changes on health care spending and coverage.

Date of Report: April 13, 2011
Number of Pages: 17
Order Number: R41767
Price: $29.95

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