On Friday December 1, 51 Senate Republicans voted to slash Medicare as much as $400 billion over the the next ten years in order to pay for tax cuts to millionaires and billionaires. The tax bill undermines Medicare as we know it and threatens to increase costs to the nearly 60 million older adults and people with disabilities who depend on Medicare for their health security. It also destabilizes the health insurance exchanges, jeopardizes the health care of millions of younger Americans and is certain to increase the number of people who face medical bankruptcy.
How does the tax bill threaten Medicare? The Senate tax bill would add $1.5 trillion to the deficit over ten years. A “pay-as-you-go” rule currently in place requires Congress to pay for those deficits. It triggers automatic cuts to Medicare and other mandatory spending programs, including affordable housing, nutrition programs and student loans. The pay as you go rule allows Medicare cuts to be as much as 4 percent, $25 billion, beginning this fiscal year. Medicaid, Social Security and food stamps are exempt from the pay as you go rule.
With a cut to Medicare this large, doctor and hospital rates would likely decrease, reducing the number of doctors willing to treat older adults and people with disabilities. The cut cannot affect either Medicare benefits or premiums and out-of-pocket costs. Congress could waive the pay as you go provision, but it would require 60 votes and, it seems unlikely it would.
Before Congress takes its final vote on the tax bill, the Senate bill needs to be reconciled with the House bill. Americans need to pressure their members of Congress to oppose this bill. Here are the key differences between the two bills.
- The House bill eliminates the tax deduction for large medical expenses, which benefits many older adults, who use a lot of health care, and 8.8 million Americans in total. The Senate bill retains this deduction.
- The House bill retains the individual mandate in the Affordable Care Act. Everyone would continue to need to have health insurance coverage or pay a penalty. The Senate bill repeals the mandate, which the CBO projects would leave 4 million more people uninsured in 2018 and 13 million people uninsured by 2025. It would drive up premiums and out-of-pocket costs for everyone in the state health insurance exchanges and put Obamacare at serious risk. Many people who opted out of health insurance in the exchanges, would buy skimpy, limited coverage, which might not cover their basic medical needs or pre-existing conditions.
These dangerous threats to the nation’s health come with a multi-billion dollar cost to middle income Americans and a multi-billion dollar gain to millionaires and billionaires. A November 26, CBO report finds that people earning between $40,000 and $50,000 will pay $5.3 billion more in taxes than they currently would, while people earning $1 million or more would pay $5.8 billion less.
Here’s more from Just Care:
- What’s the Medicare premium in 2018?
- What is improved Medicare for all and why do we need it?
- Four things to think about when choosing between traditional Medicare and a Medicare Advantage plan
- PACE: A program that helps older adults remain in their communities
- Long-term care at a glance: Most of us will need it