WASHINGTON, DC — Medicare would lose nearly half a trillion dollars over the coming decade under a Republican tax overhaul that doesn't address long-term Social Security funding shortfalls at all, which advocates for senior citizens and retirees warn could mean massive cuts in both popular programs. Without revision, they warn, the tax bill creates a perfect storm for medically vulnerable older Americans and other retirees.
Republicans are on a fast track to get the tax bill, the first rewrite of the tax code in three decades, on President Trump's desk before Christmas. Trump has yet to score any legislative victories, and a win on the tax bill is seen as a defining test of his leadership.
The nonpartisan Congressional Budget Office says the cuts to Medicare the first year after the tax overhaul is implemented would amount of $25 billion, and increase annually to $400 billion over a decade.
That's because the tax bill that passed the House and the one under consideration in the Senate both inflate the federal deficit by $1.5 trillion over a decade, exceeding allowable thresholds under congressional "pay-as-you-go" rules. A majority of U.S. representatives and supermajority of 60 senators could vote to protect Medicare funding, but that's unlikely from a Republican Congress with a history of hostility toward the program.
House Speaker Paul Ryan of Wisconsin has said he has dreamed of cutting Medicare, Medicaid and Social Security since he was "drinking out of kegs" as a college student. He and his colleagues have tried to privatize Medicare and cut $1 trillion from Medicaid in attempts to repeal the Affordable Care Act, and this could be a way for Republicans to whittle away at the program without confronting the issue head-on.
Some of the most conservative members of Congress are insisting on a budget that mandates debt-reduction spending cuts, a worry for Mary Johnson, an analyst for the Senior Citizens League.
She told Forbes the bill will hurt half of America's retirees while handing a windfall to corporations and wealthy tax filers. Her group backs the reduction if not total elimination of the tax on Social Security benefits, a topic neither plan addresses.
The House version of the tax bill eliminates the deduction on medical bills exceeding insurance payouts, an important tax-relief benefit for many retirees and people with catastrophic medical costs. The Senate version keeps the deduction intact.
AARP estimates 70 percent of tax filers who claim the deduction earn $75,000 or less, and three-fourths of them are people 5o and older who are living with some type of chronic health condition or illness. The advocacy organization for retired Americans estimates 1.2 million senior citizens will pay immediately pay higher taxes, and millions more will see tax increases in the future or, at best, no tax relief at all.
In a joint statement with 27 other non-profits representing those most affected by the deduction, AARP said:
"For the past 75 years, Americans with high health care costs have been able to deduct medical expenses from their taxes. For the approximately 8.8 million Americans who annually take this deduction, it provides important tax relief which helps offset the costs of acute and chronic medical conditions for older Americans, children, pregnant women and other adults as well as the costs associated with long term care and assisted living.
"Even those with Medicare can spend a large portion of their income on out-of-pocket expenses. The average Medicare beneficiary spends about $5,680 out-of-pocket on medical care. Furthermore, older Americans and individuals with disabilities or chronic illnesses often face high costs for long term services and support, which are generally not covered by Medicare or private insurance, as well as hospitalizations and prescription drugs, which may have significant copayments."
The Republican tax bill could hurt the elderly, medically fragile and poor in other ways as well. The Senate version of the bill repeals a provision in the Affordable Care Act that requires most Americans to buy health insurance or pay a tax penalty.
Repealing the Obama-era requirement would free up $338 billion for deficit reduction over the next decade, but the number of people without health insurance would soar — to 4 million in 2019, to 13 million by 2027, according to projections from the nonpartisan Congressional Budget Office.
Americans could pay about 10 percent more for their health insurance if the individual mandate is ended, the CBO projected.
Photo by Nichael Dodge/Getty Images News/Getty Images
Source : https://patch.com/us/white-house/republican-tax-bill-could-cut-medicare-400b-over-decade792