Providers aren't safe from Medicare, Medicaid reform despite Paul Ryan's exit

Paul Ryan speaking
Speaker Paul Ryan didn't accomplish his goal of legislatively overhauling the Medicare and Medicaid programs, but that doesn't mean his successor won't. (Gage Skidmore/CC BY-SA 2.0)

Medicare and Medicaid aren't safe from a looming congressional overhaul that could include block grants and privatization, even with the retirement of Congress's fiercest champion of entitlement reform.

The departure of House Speaker Paul Ryan, R-Wisc., who announced Wednesday that he will not run for reelection this November, removes a primary adversary for Medicare and Medicaid advocates, who worried the future of the program could lie with him.

But a conservative crusader is still likely to take up the sword against entitlement programs, especially in light of the skyrocketing deficit and a cost cutting president. Supporters of the healthcare programs don't expect any respite in the short or long term. 

"There is no sense of relief at all from this and I'm sure the reform efforts will continue regardless," Dan Mendelson, CEO at Avalere Health, told FierceHealthcare. "Providers are still nervous about changes that could come at the legislative level, and with tax reform done, the focus will now be on healthcare."

Mendelson highlighted last year's GOP-passed tax cuts, which cost the government about $1.5 trillion. Republicans, natural deficit hawks, are likely eager to pick off savings elsewhere, and entitlement programs including Medicare and Medicaid have always been easy prey.

Providers have feared GOP-led changes to the programs would mean cuts to reimbursement and disrupted patient access, which could lead to hospital and provider closures and higher volumes of uncompensated care. 

Last year, the American Hospital Association said Medicaid block grants would lead to "substantial changes in benefits and payments and limit the availability of care for patients," ultimately hurting the hospitals that serve them. 

"These tax cuts have added so much to the deficit and I can't imagine them going after military spending or raising anyone's taxes," Judith Stein, executive director at the Center for Medicare Advocacy, told FierceHealthcare. "Medicare and Medicaid is the first place they'll look."

RELATED: Democrats skeptical of Medicare payment reform efforts amid proposed funding cuts

Entitlement reform has been one of Ryan's major goals during his 20 years in Congress, but attempts to overhaul the government-run healthcare programs have largely failed. Ryan's "A Better Way" blueprint plan, released prior to the 2016 elections, would have raised the Medicare eligibility age, capped federal spending for the program, and “voucherized” the program by allowing seniors to purchase coverage through private insurers. It would have also turned the Medicaid program into a block grants allotted per capita.

The details of that plan were included in various ACA repeal efforts last year, an indication that a majority of Republican lawmakers had warmed to the policies. 

"I'm hopeful that the personal commitment to these visions may leave with him, but these positions have taken hold in many of his peers," Stein added.  

As recently as December, Ryan signaled that 2018 was the year Republicans would focus on cutting Medicare and Medicaid. 

“We’re going to get back, next year, at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during an interview with conservative talk show host Ross Kaminsky.

Midterm monkey wrench

It's unlikely GOP leadership will take on healthcare reform efforts before the hotly-contested 2018 midterms, Mendelson said. Analysts predict the GOP might be in danger of losing ground in both the House and Senate, and recent polling puts Democrats ahead by about 7% on the generic congressional ballot, according to RealClearPolitics, a poll aggregator. 

If the GOP loses either chamber, the odds of entitlement reform would be slim to none, as Republicans would need support from Democratswho have pushed back against privatization and block grantsto get legislation passed. In a March 28 letter to her colleagues, House Minority Leader Nancy Pelosi urged fellow Democrats to pitch GOP tax cuts as a threat to Medicare when speaking with constituents, signaling where her caucus currently stands. 

RELATED: Pelosi urges colleagues to link Republican tax overhaul to Medicare cuts

Stein said that if the GOP majorities survive the midterms, party leaders could take an approach similar to the tax reform and attempted ACA repeal efforts, using a budget resolution as the vehicle, which requires just 50 votes in the Senate instead of a filibuster-proof 60.

But even if the GOP takes a heavy loss in November the GOP could pass a budget reconciliation bill during the the lame-duck session, Julius Hobson, senior policy advisor at Polsinelli PC said.

"Anything is possible in this day and age," he told FierceHealthcare, referencing a similar situation in December 1980 after President Jimmy Carter lost to Ronald Reagan, and Democrats lost the Senate.

During his announcement Wednesday, Ryan said "normalizing entitlement reform" was one of his chief achievements during his 10 terms in Congress, but added, "more work needs to be done, and it really is entitlements."

"That's where the work needs to be done," he said. "And I'm going to keep fighting for that."