The GOP tax bill that the Republicans have been working on, can lead to major cuts in Medicare funding and spending in 2018. The bill is estimated to cut $25 billion from Medicare starting 2018, and resulting in $400 billion over the next ten years.
The Congressional Office has estimated a $1.5 trillion deficit to over the next 10 years due to the tax bill.
In 2010, Washington passed a “pay as you go” rule which requires any new laws to be deficit neutral. Basically if there is not enough economic growth to balance the money lost, then the Office of Management and Budget has to cut spending. Unfortunately, it is likely that one of the spending cuts will be to Medicare.
The tax bill is expected to pass, and while it does not exactly say that it will cut spending on Medicare, it will be an unintended result. Some Republicans stated that the cuts would affect doctors, health providers, and hospitals, not Medicare beneficiaries. They have also had talks to try and change the Medicare eligibility age from 65 to 67.
House Speaker Paul Ryan seems to threaten cuts to Medicare saying “we’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit. I think the President is understanding choice and competition works everywhere, especially in Medicare.”
A major issue with the possible cuts is that Medicare beneficiaries could end up being kicked off of their current Medicare plan, or receive fewer benefits.
Juliette Cubanski, associate director of the Program on Medicare Policy at the Kaiser Family Foundation says,“these cuts could be one bad side effect of this tax legislation. Many providers may be able to absorb the payment reductions if they have a very diverse patient base. But others who rely primarily on Medicare may find this cut really difficult to deal with.”
Roughly 54 million Americans currently receive Medicare benefits. Many fear the cuts will leave many Americans without coverage or unattainable expense to have coverage. However, McCarthy claims lawmakers will find a way to avoid the Medicare tax cuts. The tax bill is expected to be voted on in early January, when we will begin to see the effects of the bill.