My Medicare

Tea Party

2010 was the year of the “Tea Party” Revolution.  Barack Obama was in his second year of his Presidency, and the Nation was well on the way to recovery from the Stock Market Crash of 2008. (Isn’t it funny, Obama gets the country going the right direction, and the Tea Party shows up.  Biden gets the country through the economy of Trump’s Covid debacle, and, two years later, Trump wins again).

The Affordable Care Act was finally passed at the end of 2009, and while almost forty million Americans gained access to health care, it was highly controversial.  The Republican Party convinced many Americans that it was a “free ride” for too many who didn’t deserve it, and that it would escalate the “average” guy’s insurance costs.  

True or not, many Americans turned to the “Tea Party”, a Koch Brothers funded “grass roots” movement.  Tea Party members were dedicated to cutting the deficit and debt of the United States.  And when they voted in November, Republicans gained control of the Congress. 

One of the outcomes of that political change was the “Pay as You Go” Act of 2010.  It required that if the debt of the United States grew too big, too fast; automatic cuts in spending called “sequestrations” would go into effect.   It’s a simple concept:  if the debt grows too much, then some of the “big ticket” items get cut.  One of those on the cut-list is Medicare.

Government Health

Just to be clear, there are several government health assistance programs.  Medicare is the best known, a law passed in the mid-1960’s.  It required most Americans to pay into FICA (Federal Insurance) as part of their payroll taxes.  After ten years of paying, they become eligible for health insurance at sixty-five years of age.  Insuring the elderly is the most expensive type of insurance, so now the government assures most of those sixty-five and older that they will be insured.

Medicaid is a different program.  It recognizes that there are Americans that cannot afford insurance, either through their own conditions, or inability to work, or other defined reasons.  These folks are granted government aid for health care.  One of the biggest groups on Medicaid is children of parents who are impoverished.  The idea is that just because the parents can’t afford insurance, the kids should still get health care.

The Affordable Care Act was a bridge between regular private health insurance, usually through an employer, and Medicaid.  Those who earn too much to qualify for Medicaid, but are unable to get regular employee insurance, could get reduced cost insurance on the “market” created by the ACA.  While it was controversial in 2009, it’s withstood the “test of time” and most of its provisions are assumed to be fundamental today.

Big Beautiful Bill

So what’s all this about?  The “Big Beautiful Bill”, seems doomed to passage this morning at the House of Representatives is poised to take a final vote.  It does a lot to health care.  The ”BBB” directly cuts almost a trillion dollars from Medicaid.  Why are they cutting such a fundamental health program?  Since the “BBB” contains huge tax cuts for the wealthy, there’s less money coming into the Government.  To make up for the loss of income, there needs to be some commensurate cut in spending.  

And since the “BBB” has huge increases in spending for Trump’s attack on undocumented Americans, as well as the Defense Department, something else has to go.  Medicaid is the program that’s taking the biggest hit.

But nowhere in the “BBB” is there a provision for cutting Medicare.  So why are Democrats claiming that it will?

Pay As You Go

The Congressional Budget Office is the non-partisan “score-keeper” for Congressional legislation.  Their analysts determine the financial plusses and minuses, and project the impact of any legislation on the US deficit (spending over income per year) and US Debt (the total amount the US has spent over income).  And the CBO is clear.  The “BBB” will increase the US Debt by $3.5 Trillion in the next ten years (CBO).

Past Congresses are so sure that the CBO is “fair”, that they based the “Pay as You Go” Act on the CBO’s scoring.  Whether the Republicans in Congress or the President like it (and they don’t) the passage of the “BBB” will trigger the “Pay as You Go” Act sequestration.  And what will be sequestered?  $500,000,000,000 (that’s $500 Billion)  over the next ten years that is currently going to Medicare.  That’s more than is actually in the total Trust Fund right now.

The Medicare fund was already in trouble.  The amount that the “Baby Boomers” paid in over their forty-some years of work-life, isn’t enough to cover the current costs of health care.  And the current “contributors” aren’t enough to make it up, plus save for their own future care.  In addition, the Congress has felt comfortable borrowing from the Medicare Trust Fund (and other funds, 20% of the US Debt is from US held funds – Peterson).

Congress can always change “its” mind.  They might add money to Medicare (or pay back what was borrowed).  Or, they might re-write the “Pay As You Go” Act.  But those are might’s and maybe’s.  What is “fact” today:  The “BBB” will cut Medicare – perhaps all of it.  

If you sixty-five or older, better start filling that “penny jar”!!

You’ll need it.