April 12, 2011

A deficit of compassion

Republican reforms to Medicaid will hurt those most in need

Under these difficult economic circumstances, the American people have seen proposal after proposal from politicians of all sides. Some of the proposed solutions have been good, but most have been terrible. Unfortunately, the recent Republican budget proposal, introduced by House Budget Committee chairman Paul Ryan, features a series of reforms to Medicaid that fall within the latter category.

Under Ryan’s budget plan, the federal government will allot states a fixed annual block grant of $11,000 per Medicaid beneficiary to use as they please. This is in contrast to the “pay-as-you-go” system under which Medicaid currently operates; the government guarantees that it will cover the costs of the states no matter how high they are.

The key flaw in Ryan’s plan is that it underestimates future health care costs, which have the potential to fluctuate incredibly. With a standard federal allotment of money, the burden of health care costs would shift onto the beneficiaries and states much more because the government would not guarantee that it would cover their expenses.

One has to acknowledge that the current system is not sustainable. Federal spending obligations are capricious, as no state can predict what its Medicaid costs will be for its citizens each year. So, the government does waste money on these variable costs. And there are some advantages to block grants —less state incentive to increase spending and more predictable federal spending on health care. But what costs do these potential benefits come with? For one thing, reduced Medicaid eligibility, as well as strained beneficiaries and states. The block grants essentially transfer all of the federal government’s baggage to the lower tiers of society, which solves nothing. Is the only way to reduce the deficit to limit access to health care for American citizens? Do we have to choose between our people’s health and a sound economy?

An even more fundamental question: Why even go through with a plan that won’t be passed? The Democrats will obviously not allow its authorization in the Senate. It seems like these audacious bills arrive on the table with the goal of merely making a political and ideological point rather than concretely fixing things. Because this bill will be presented as part of a larger Republican initiative to reduce the crippling debt, Obama’s image as being proactive on the budget will be further tarnished ahead of the 2012 election. However, a strong possibility exists that this plan will lead to a backlash against the Republicans, as they have alienated the significant subset of the population that cherishes Medicaid. Either way, hostile politics are getting in the way of real progress, and superficial, impractical political gestures are replacing meaningful debate and reform.

I am wholeheartedly convinced that further investments in research, education, and technology should be among the primary strategies for reducing the deficit. Leading the green energy industry, investing in advanced and efficient informational health systems, reinforcing our infrastructure and educational system, increasing our ability to survey and mitigate waste, and supporting students and entrepreneurs should be what our politicians strive for. Investments in new technologies and education not only make the system more efficient, but they also create the jobs needed to spur the economy. What ever happened to “Winning the Future?”

It has been said so many times that it has almost become a cliché: Stop with the games. Now is the most crucial time for an innovative, courageous, and effective leader to rise up and combat these crises. President Obama must assume that role by going forward with the crucial investments in education and technology that he has called for many times but not yet followed through with. We cannot be preoccupied with inefficient solutions and expect to come out of this budget problem alive and well.

Suchin Gururangan is a first-year in the College.