President Joe Biden’s $3.5 trillion budget reconciliation bill is likely to come up for a vote any day now, and according to healthcare experts, seniors have reason to be concerned.
The bill includes the largest expansion of government-controlled healthcare since Obamacare, yet it has received significantly less attention. In fact, total health care expenditures in the legislation dwarf that of the Affordable Care Act (ACA). The ACA ultimately cost $940 billion, whereas this bill is currently at $1.3 trillion.
The healthcare components of the bill are being led by none other than Senator Bernie Sanders (I, VT) and include much of the self-proclaimed democratic socialist’s’ policy wishlist. Among them is a giant expansion of Medicare benefits.
The plan would increase Medicare coverage for things like hearing aids and dentures at a cost of $370 billion. Over 40 percent of those currently on Medicare already receive such services through what is known as Medicare Advantage though, which offers plans through private companies who are reimbursed through the program.
And herein lies the reason that seniors should be concerned.
Those on original Medicare (as opposed to Medicare Advantage) still pay a monthly premium for what is known as Medicare Part B. Part B covers things like doctor visits and outpatient care. And the premium seniors pay is calculated based on an internal governmental formula that takes into account things like inflation, the individual’s income bracket, and Medicare program spending.
Thus, it is anticipated that—should these provisions stay in the bill and it be signed into law—those on Medicare could expect to see an increase in their monthly premiums in the near future.
Dean Clancy, who is a Senior Policy Fellow for Healthcare Policy at Americans for Prosperity, explains it like this:
“The way Medicare works, adding new Medicare benefits means higher Part B premiums for seniors, guaranteed. It’s required by the Medicare statute, which directs that each year senior’s monthly premiums must be adjusted automatically to cover 25 percent of projected Part B costs for the coming year. If Congress votes to increase Medicare spending, seniors’ premiums go up automatically to cover the added cost. Now, Congress could avoid that, but its options are not pretty. It could cut Medicare benefits elsewhere, leaving seniors no better off. Or it could dip into the Medicare trust funds, accelerating program bankruptcy. So no matter which way lawmakers choose, seniors lose.”
This is merely one negative repercussion that is sure to follow from the healthcare provisions currently in this bill. It is an expansive piece of legislation that is meant to push as many people as possible onto government healthcare and stomp out private competitors.
This specific provision of the healthcare bill would do that by undermining the private insurers who currently provide these supplemental services to retirees. Ultimately, that means seniors face price spikes no matter which form of Medicare they are on.
For a free market to survive there must be competition. But no private actor can truly compete with the government, which has guaranteed revenue via the taxes it forcibly takes from people, the ability to undercut its competitors, and no risk of failure: that is, until out-of-control spending like this brings faith and credit in the US government itself crashing down.
The post Medicare Premiums Likely to Increase Under Biden’s $3.5 Trillion Budget Reconciliation Bill was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.