Will the Next Congress Cut Medicare?

Last year, Congress and President Trump made clear their fiscal priorities: Cut taxes, grow defense spending and don’t worry for now about the rising federal budget deficit.

Problem is, Washington always comes back to worrying about the deficit. And when it does, Medicare, which accounts for 15 percent of the federal budget, inevitably comes to mind. So when trimming the deficit again becomes an issue, “It’s quite possible that Medicare will be back on the chopping block,” says Tricia Neuman, Medicare expert at the nonpartisan Kaiser Family Foundation.

If and when this happens, some elected officials are likely to turn to a familiar refrain: Ask beneficiaries to pick up a larger share of health costs than they already pay. That could mean higher premiums, copays and cost sharing. It could also mean tightening up on what Medicare covers and renewed calls to raise the Medicare eligibility age. “Medicare is a program that’s growing both in numbers of enrollees and total costs,’’ says David Certner, AARP legislative policy director. “The concern we have is meeting the benefit promise.”

Medicare today provides benefits to 60 million older adults and people with disabilities. But the number of Americans 65 and over will double, and the number of those 80 and over will nearly triple, between 2010 and 2050, according to a Kaiser Family Foundation report. At the same time, health care costs will keep rising above the rate of inflation, predicts the Centers for Medicare and Medicaid Services. The more these costs grow, the more strain that puts on Medicare, the country’s largest spender on health care. 

This year’s elections could decide whether politicians try to strengthen or cut Medicare. 

One fundamental change that’s favored by some in Congress is to convert Medicare into a voucher or “premium support” program. Today, Medicare basically pays the bill for most of a beneficiary’s medical care. Under a voucher system, each beneficiary would get a flat amount of money each year to buy health coverage. If the care they need costs more than the voucher, the beneficiary would pay the difference.

The biggest proponent of a voucher system, Speaker of the House Paul Ryan, R-Wisc., is retiring from Congress at the end of this term. His absence will make a serious discussion of such a change less likely.

AARP