Republicans Give Up on Medicare Overhaul

The GOP has abandoned its plans to revamp Medicare as new forecasts indicate Medicare's trust fund is in poor shape partly due to Republican tax cuts, reports Politico Pro . A Medicare board of trustees' report says those cuts will add $1.5 trillion to the deficit, slowing the flow of Medicare funding and further destabilizing the program. Furthermore, the decision to eliminate the Independent Payment Advisory Board will put additional pressure on Medicare's finances, with its hospital trust fund currently projected to run out by 2026, three years earlier than predicted. The GOP also must weigh President Trump's likely antipathy toward a proposed overhaul of Medicare. Some Republicans still believe a resurgent economy will alleviate financial pressure on the program's trust funds. The trustees' report anticipated that the GOP tax cuts would lower the income taxes people pay on Social Security benefits, part of which are channeled into Medicare. The tax law's repeal of the Affordable Care Act penalty for lacking insurance will drive up the uninsured rate, hiking Medicare payments for uncompensated care. Medicare's Paul Spitalnic says lower-than-expected tax returns account for the "vast majority" of this year's funding shortage, and the trustees found payroll and income taxes cannot cover Medicare's budget gap, partly because of the tax law. Rep. Steve Womack (R-Ark.) argues that the report highlights the need for the House to unite behind a fiscal plan that includes entitlement reform.