This year, Trump’s budget does not include cuts to either Social Security or Medicare. But, sadly, that’s likely irrelevant given that the Republican leadership plans to repeal the Affordable Care Act, drive up costs for people with Medicare, and jeopardize care for millions of people with Medicaid. While we still don’t know exactly when Republicans will focus on Medicare, we know Speaker Paul Ryan plans to gut Medicare, if not this year then next year or soon thereafter.
Here’s what we know about the Republican leadership’s agenda: A leaked copy of the Republican plan to replace the ACA reported in Stat, phases out Medicaid expansion by 2020 and turns Medicaid into a “block grant” program. Put differently, instead of Medicaid remaining a defined benefit program that covers everyone who qualifies and provides set benefits, each state would have a limited amount of money to spend on Medicaid. If the money is not enough to cover all benefits or all people who are Medicaid eligible, states would be able to decide what benefits to cut or could limit enrollment.
Who benefits from the Republican plan? Insurers, drug companies and device companies. The leaked Republican plan wipes out ACA taxes on drug and device companies as well as insurance companies. Moreover, as predicted, the Republican plan benefits insurers and puts people at risk by allowing the sale of insurance that does not cover all essential benefits. For example, states could decide that insurers do not have to cover mental health or substance abuse benefits.
Who loses from the Republican plan? McKinsey and Avalere Health estimate that about half of all people covered by the ACA would no longer have health insurance coverage if the leaked Republican plan were to become law. Moreover, the Republican plan allows insurers to charge older members five times more than younger members, meaning that people in their mid-50’s to early 60’s would see large premium increases. The ACA limited the difference in premiums for older adults to no more than three times those paid by younger adults. And, while some people may see premiums drop. they are likely to see their out-of-pocket costs rise when they need essential care that their health plan no longer covers.
It’s still hard to know what will happen on the health care front or when. Trump’s first priority is “tax reform,” which will mean cutting corporate taxes and taxes for the wealthy as well. And, according to his Treasury Secretary, Steven Mnuchin, “We are not touching [Medicare and Social Security] now. But, one thing we do know, big health care changes are in the offing.
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Here’s more from Just Care:
- ACA repeal means higher costs for people with Medicare
- Five ways Congress could weaken Social Security
- Four ways Congress could weaken Medicare
- New poll shows major support for expanding Medicare and Social Security