Medicare And How It Could Be Affected By The New Tax Bill Just in case you were wondering . . .

On a bipartisan view, and no matter what side of the aisle you vote, 65 is still 65 years old, and everyone that is currently on Medicare or who will be registering for Medicare in the next few years (me) should be paying attention to what’s going on with the tax overhaul currently being hotly debated in Washington, D.C.

According to the Congressional Budget Office, or CBO, (my mom said “what’s the CBO?” — she is so darn cute for 85) the tax bill currently being debated by our congressional leaders would result in a measured increase of the federal deficit over the next decade. Largely unknown, but first enacted by President George H.W. Bush, a law passed in 2010 called PAYGO (pay-as-you-go law), was designed to keep the deficit in check by requiring the administration to reduce spending in many mandatory programs if the law doesn’t also provide offsetting revenue. Among the programs included, but not limited to, in this mandatory group are Medicare, federal student loans, operations of the US Custom and Border Protection, and agricultural subsidies.

Exempt from these reductions are programs like Medicaid, Social Security, food stamps, and other safety
net programs.

The enforcement of PAYGO would cap the trimming of Medicare at 4 percent, (which is estimated at $25 billion dollars in cuts for 2018), and, depending on the size of the budget, the amount could be higher over the years. While Medicare experts don’t expect the Medicare fund to run short until 2029, this “anti-deficit” law (PAYGO) could trigger automatic cuts immediately in the New Year.

Individual Medicare benefits would not be affected. However, PAYGO would affect payments to doctors, hospitals, and other providers treating Medicare patients. Consequently, these cuts would likely decrease the number of participating providers in Medicare, even prompting some healthcare providers to stop taking Medicare patients. That would result in reduced access across the board for seniors. Compensation for cuts to Medicare Part D drug plans could force passing those cuts onto beneficiaries by charging higher premiums.

So, not only would this tax overhaul, in its current form, trim the Medicare budget, it also undermines the Affordable Care Act’s insurance markets by repealing the individual mandate requiring everyone to be covered. Many good providers have already left our area, leaving few choices this year in Virginia. By losing the healthiest people in the pool of those covered — because the mandate to have health insurance would go away — economic evidence concludes that premiums will go up even higher, leaving millions without coverage at all.

The proposed tax overhaul also toys with limiting or greatly reducing the high-medical-expense federal tax deduction that is taken on the income tax Schedule A. This would affect millions of people, many of them seniors. As we know, large medical bills are still one of the largest contributors to bankruptcy in our country.

In the past, Congress has found ways to work around the PAYGO rule by including provisions in legislation to exclude the PAYGO cuts. Republican leaders say that this law has never been enforced since its passage in 2010, and have no reason to believe that Congress would not act again to forestall the PAYGO cuts. However (if you are not confused enough as it is), the special budget process Republicans are using for tax overhaul this year does not include this exception. The measure could pass by the end of the year, but would need 60 votes in the Senate, and they don’t have the support of
the Democrats.

In short, I believe the Senate tax bill really is also a healthcare bill in disguise. And it will have sweeping consequences for our American healthcare system that could affect the vulnerable and the
elderly most.

I really pray this holiday season that our congressional leaders will be given the knowledge and the sense they need to figure this all out.

Karen Cifala is a Realtor for Remax Roots in Berryville, VA and can be contacted by either email, kcifala@gmail.com or on her cell 303-817-9374.