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House GOP study group is proposing changes to Medicare. Here's what you need to know [1]
["Sarah O'Brien"]
Date: 2023-01-26
Anna Moneymaker | Getty Images
How the GOP is approaching Medicare's fiscal woes
Medicare has 64.5 million beneficiaries, the majority of whom are at least age 65 — the age of eligibility — or younger with permanent disabilities. It consists of Part A (hospital insurance) and Part B (outpatient care coverage). There also is Part D (prescription drug coverage) and Part C (Medicare Advantage Plans), both of which are offered by private insurers. Advantage Plans deliver Parts A and B, and usually Part D. The Republican Study Committee — the GOP's largest caucus, with about 170 members out of 222 House legislators — has addressed the looming fiscal problem by outlining hoped-for changes to Medicare in its proposed budget, which it says would ensure the system's long-term solvency.
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Among the group's proposals: raising the age of eligibility to 67 from 65, which would align with the full retirement age for Social Security. Additionally, Parts A, B and D would be consolidated into a single plan with one premium, and direct competition would be encouraged from Advantage Plans with that federal plan. There also would be premium subsidies available, depending on a person's income. "The [budget] is going to be our guide for what conservatives would like to see in an ideal world," said a committee spokesperson.
'It's still early in the policy process,' expert says
Nothing is in legislative form yet, and it's uncertain exactly which proposals would be included if bills are introduced — or what their chances of getting through a divided Congress would be. "This is still early in the policy process so it is hard to predict which proposals will remain on the table, or how they might evolve," said Tricia Neuman, executive director for the Kaiser Family Foundation's program on Medicare policy. "Some of the proposals would involve a large-scale restructuring of the current Medicare program."
The stakes in a debate like this are high, given the importance of Medicare. Tricia Neuman executive director for the Kaiser Family Foundation's program on Medicare policy
Right now, Neuman said, the savings proposals are being described at a fairly high level. "The policy debate starts to get real when the specifics are laid out," she said. "The stakes in a debate like this are high, given the importance of Medicare [for] seniors and younger people with disabilities."
Here's what insolvency in 2028 would mean
In simple terms, it's the Part A trust fund that is facing a shortfall beginning in 2028, according to the latest Medicare trustees report. Unless Congress intervenes before then, the fund would only be able to pay roughly 90% of claims under Part A beginning that year. That trust fund gets most of its revenue from dedicated taxes paid by employees and employers. Generally, workers pay 1.45% via payroll tax withholdings (although an additional 0.9% is imposed on incomes above $200,000 for single taxpayers or $250,000 for married couples). Employers also contribute 1.45% on behalf of each worker. Self-employed individuals essentially pay both the employer and employee share.
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[1] Url:
https://www.cnbc.com/2023/01/26/house-gop-study-group-is-proposing-changes-to-medicare-what-to-know-.html
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