The biggest change, however, may not be in Medicare at all. It could result from Romney’s planned spending reductions for approximately 6 million low-income seniors eligible for both the Medicare and Medicaid programs.
“Seniors can survive with the changes to the Affordable Care Act,” said David Cutler, a health economist at Harvard University who has advised the Obama administration on health policy. “No one is going to claim that’s the end of the word. The Medicaid cuts have the potential to be really, really bad for seniors.”
Romney has proposed turning Medicaid into a block grant program, where a state would get a lump-sum check for covering its beneficiaries. That check would be set to grow at 1 percent faster than inflation. That would be significantly slower than Medicaid’s historical growth, reducing the strain on the federal budget.
These seniors, usually referred to as “dual eligibles,” tend to have expensive health-care needs, accounting for 20 percent of Medicaid’s $251 billion in spending last year.
The Romney budget would reduce Medicaid spending on current beneficiaries by more than $600 billion over the next decade, according to a recent Bloomberg Government analysis.
“That’s where the risk to the population comes in,” said Gail Wilensky, a former Medicare director under President George W. Bush. “If too much money is withdrawn from Medicaid, unless you think massive efficiencies are achievable, that’s a place where seniors could be vulnerable.”
The Romney campaign contends that there are indeed big efficiencies to be found in the Medicaid program, especially if states are given more flexibility to design their own programs.
“It’s a restructuring of the program that gives states the possibility to pursue different models,” Cass said. “Gov. Romney would give states the flexibility to experiment. He believes if the program is structured properly, spending can go an awful lot further.”