The House Republicans’ proposed legislation to replace Obamacare is less than a week old and many are already making predictions including that “people will die” without Obamacare. Like me, you may have difficulty recalling people dying due to lack of health insurance before Obamacare. It’s also important to keep in mind that this is only proposed legislation and will likely be modified in the Senate. Nonetheless, let’s look at how the proposed legislation could impact Medicare.
According to The Washington Post’s fact checker analysis (“How is Medicare affected by House GOP health plan?”), Medicare is largely unscathed. There are however, two provisions which affect the financing of Medicare. First of all, the 0.9% Medicare payroll surtax on high earners will be repealed and as a result, the Medicare trust funding will be depleted in 2025 rather than 2028. Secondly, the per capita growth of Medicaid will be limited to the medical care component of the consumer price index beginning in 2020. Because many Medicare beneficiaries are also eligible for Medicaid (called dual eligibles), this is expected to result in higher Medicare spending.