Medicare Advantage

Is Medicare Changing Under Trump?

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In the discussion of healthcare and the Affordable Care Act (ACA), it’s important to understand that no one really knows what is going to happen. All we can do at this point is speculate based on what key players within the industry and the political arena have said. Of course, when politicians introduce a plan, they try to make it sound as appetizing as possible to the public. In the debate over Medicare, you’ll find plenty of seasoning being put on both sides of the argument.

What Republicans Are Proposing

Perhaps the best document to use as a guideline for potential GOP changes to Medicare would be Paul Ryan’s proposal, titled “A Better Way.” On his website, the Speaker of the House outlines the same changes to Medicare that he’s been offering for the last five years. Some of the more controversial changes include privatizing Medicare, but that proposal may not be as devastating as pundits suppose. Privatization would drastically alter the program as it stands, but implementation matters in this case.

Donald Trump himself has not said anything about what he intends to do with Medicare, which is why most people look to Paul Ryan’s plan as the basis for GOP opinion at the moment. Ryan has insisted from the day that he introduced his plan that his goal is to preserve Medicare and keep it available to the people who need it. But it’s the way that he intends to support Medicare that has people concerned.

Ryan’s plan ultimately converts Medicare to a multi-tiered system where seniors are given vouchers from the government toward the purchase of a Medicare-based insurance plan. Any amount that the voucher does not cover must be paid by the enrollee as a monthly premium. It’s assumed that Ryan would want to create a marketplace-type scenario for Medicare that would offer coverage at different levels. That sort of setup would allow for different types of Medicare coverage, which could leave some lower-income seniors without access to the same plans they have now.

The privatization of Medicare, if it happens at all, is not expected to happen until 2024. In the immediate future, Ryan wants to remove all ACA legislation that he feels increases costs in Medicare and help to make Medicare more cost effective. He also wants to move into more progressive provider payment models that reward providers for giving higher quality care instead of just paying out based on a schedule of costs.

An Attempt to Avert Crisis

When former President Obama restructured Medicare with the ACA, he imposed taxes and other fees that helped to sustain Medicare Parts A and B until 2028. Right now, about 55 million Americans are enrolled in Medicare, and that number is expected to skyrocket as the Baby Boomer generation continues to age and retire. While Obamacare did help to keep Medicare afloat for another decade, there’s nothing in place right now to keep the program solvent after that point.

Speaker Ryan sees the issue with Medicare being a matter of numbers. The fact is that offering complete hospitalization coverage for 55 million Americans and counting is going to cost a significant amount of money. Medicare spending ($540 billion minus premium and offsetting income) accounted for about 15 percent of the federal budget in 2015, nearly a quarter of which was for hospital inpatient services. According to Ryan and like-minded conservatives, that sort of spending on healthcare in the United States is simply not sustainable.

Where is It All Headed?

Speaker Ryan’s goal is to get Medicare into a position where it’s sold on marketplaces similar to how the private healthcare industry works under Obamacare. His vision sees the federal government helping to offset some of the costs for seniors to pay for Medicare, but seniors would have much more freedom to choose what kind of coverage they want.

By creating a Medicare marketplace, Ryan believes that there would be more add-on policies and options available for seniors who want good healthcare. The speaker is also advocating for allowing seniors to purchase private insurance with their Medicare vouchers instead. Right now, it’s illegal for any company to sell a Medicare enrollee private health insurance.

Since no one knows if “A Better Way” will be the template used for the new Medicare, and no one at a high enough level within government is revealing any details, it’s tough to say what will really become of Medicare. One thing that Trump, Ryan and the GOP in general seem to agree on is that Medicare must be preserved, which is something people on both sides of the political spectrum typically agree on. What remains to be seen is how the program will be saved and what kind of health insurance seniors will have access to when final changes are made.