Medicare Advantage

Medicare’s Future is Looking Hazy at the Moment

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President Trump swept into office on the wings of a promise not to touch Medicare and Social Security benefits. Republicans in Congress plan to make changes, though. If tax reforms are passed that increase the national debt, pundits have predicted that so-called ‘entitlement’ programs like these will go on the chopping block. This is a risky strategy for conservatives, especially since the majority of Americans aren’t in favor of a tax plan that makes major cuts to corporate taxes while making only minor, temporary cuts to the taxes of everyday citizens.

Creating an Artificial Crisis

Liberals have long suspected that the Republican Party wants to reduce or remove benefits that people rely on in times of need. Surprisingly, now that the Republican tax plan seems likely to be implemented, they’re admitting it. In a clear case of manufacturing a pressing need in order to justify cutting healthcare and retirement benefits, Paul Ryan (R-Wi.) has called for slashing corporate tax rates and raising the lost revenue by draining entitlement programs.

In simple terms, if the Republican tax bill passes, the country will face a major deficit increase. This means that Medicare, Medicaid, the Affordable Care Act (ACA), student loans and many other social services will be underfunded. Until now, cuts to Medicare have been limited to 4 percent per year, but cutting these benefits further has been a cherished goal of conservatives.

Triggering Automatic Cuts

The tax reform bill flies in the face of the long-standing conservative policy that any legislation passed by Congress must pay for itself and not add to the national debt. Bill sponsors are well aware of this, and that’s why Republicans in Congress are promising to cut spending on healthcare and other safety net programs to cover the shortfall.

The tax bill is estimated to add roughly $136 billion to the deficit next year, triggering the PAYGO, or pay-as-you-go requirement. If current tax reform legislation is passed, a ‘sequestration’ order will go into effect, and the $136 billion will be made up by across-the-board cuts to government programs. In 2013, the last time the sequester was used, it cut federal spending by $55 billion. This led to automatic cuts in the military budget, Medicare and other programs.

Neither Democrats nor Republicans want sequestration, since it can slow economic growth. Patients will also have fewer choices in healthcare if it goes into effect. The government will reduce payments to healthcare providers, and some doctors will stop treating patients that rely on Medicare. The country is still operating under sequestration limits from 2013 that will last through 2025. It seems counterintuitive to slash taxes when we’re still struggling to make up a budget deficit.

Pushing Changes to Healthcare

Since the effort to repeal the ACA was unsuccessful, Republicans aim to undermine it by increasing the deficit. Since neither side wants sequestration to go into effect, the budget shortfall will have to be made up another way. It’s anticipated that repeal of insurance subsidies to low-income people will be targeted as one way to counteract the deficit. The current tax bill also includes the repeal of the individual mandate, a requirement that everyone either have health insurance or pay a fine.

If these things come to pass, you can expect to pay higher health insurance premiums, and senior citizens could see increases of over $100 dollars a month. Up to 13 million people will be unable to afford insurance, and that will raise the cost of healthcare. Doctors and emergency rooms will continue to treat the rising number of patients who can’t pay, and that will increase healthcare costs across the board for everyone else.

If Medicare is cut at the full 4 percent allowed by law, that’s a whopping $25 billion a year cut from its $625 billion budget. Reducing Medicare funding year after year will have a drastic effect on the disabled and elderly. Health insurers, hospital groups, physicians and the American Medical Association have all publicly opposed the tax reform bill because of this.

Will the 2018 Elections Make a Difference for Medicare?

The Republicans are trying to pass an unpopular tax bill that’s designed to force the gutting of safety-net programs like Medicare. This is going to have consequences for those running for reelection to the House and Senate next year. Whether the tax bill passes or not, next year’s elections could have a significant impact on the availability of adequate healthcare in this country.

Reduction in spending for Medicare, Medicaid and the ACA are high on the list of Republican priorities. Democrats are resisting these cuts, and that may give impetus to the number of House and Senate seats they capture during the 2018 midterm elections. Paul Ryan continues to pressure President Trump to accept cuts to Medicare despite his election promises. In the end, it’s up to the people affected by cuts to healthcare coverage to vote for candidates who support Medicare funding.

The Future of Medicare

Going forward, for Medicare to continue to be a safety net for the elderly and disabled, it will have to be funded at a realistic level. The program can’t continue to be chipped away year after year through budget cuts and still fulfill that promise. Whether Medicare continues to be solvent relies on the election of representatives who will support it, not attack the funding year after year. In the end, voters will determine the direction our country takes on this vital healthcare program.