House GOP budget plan slashes funds for Medicare

By Medicare FOXBusiness

The Capitol is seen in Washington, Friday, April 7, 2017. President Donald Trump is approaching the end of his first 100 days in office without having signed a single major bill into law. Political polarization in both parties in Congress has turned ... out to be a major obstacle for the president as well as lawmakers. (AP Photo/J. Scott Applewhite)

While Republicans in the Senate clamber to find a solution to their health care reform dilemma in the wake of a fresh setback Monday night, House lawmakers on Tuesday released a budget blueprint that includes severe cuts to social programs – including Medicare.

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Despite the promises President Donald Trump made during his campaign not to touch Medicare, the House budget text says: “Doing nothing would result in programs like Medicare falling off a cliff.”

The 2018 plan, authored by Rep. Diane Black, R-Tenn., includes more than $200 billion in cuts to entitlement programs. Current federal spending rates for Medicare, Medicaid and Social Security are referred to as “unsustainable” in Black’s budget.

Calls for cutting projected Medicare costs, the second largest entitlement program after Social Security, involve turning the program into an “optional premium support” system where future beneficiaries would receive a fixed amount of money to buy health insurance on the open market. The document says traditional plans would remain available, but a new arrangement, similar to the structure of Medicare Advantage, would be put in place aimed at driving down costs by increasing competition among insurers.

According to the annual trustee’s report, if nothing is done, Medicare faces insolvency by 2028, while OASDI funds will run dry in the mid- 2030s.

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Meanwhile, Medicaid would be “put on a budget” under the blueprint. Social Security cannot be addressed via reconciliation, according to the committee’s document.

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The overall fiscal blueprint calls for shifting from a $472 billion budget deficit in 2018 to a $9 billion surplus over the course of a decade. The bill assumes tax reform, deregulation and health care reform will spur annual economic growth of 2.6%.

GOP lawmakers are looking to push significant changes to the tax code through Congress using the reconciliation process. But before they can even start the process, they have to pass the 2018 budget with reconciliation instructions, among other requirements.

The House Budget committee will vote to advance the legislation within the chamber on Wednesday.

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