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The House Fiscal Year 2019 Budget and Its Effect on Seniors

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The House Budget Resolution for Fiscal Year (FY) 2019 would make cuts to the Medicare, Medicaid and Social Security programs and repeal and replace the Affordable Care Act (ACA), actions which would be harmful to millions of Americans.

The House Budget Resolution for FY 2019, introduced by House Budget Committee Chairman Steve Womack (R-AR), was approved by the House of Representatives Budget Committee on June 21, 2018.  This budget proposes drastic cuts in federal spending for programs of importance to most low- and middle-income Americans while protecting nearly $2 trillion in tax cuts, which mainly benefit the very wealthy and large profitable corporations and dramatically increase our deficits and debt.  This paper summarizes some of the key proposals in the House Republican FY 2019 budget resolution that would affect seniors and people with disabilities who rely on Medicare, Medicaid and Social Security.

Medicare

The budget resolution proposes $537 billion in cuts to Medicare which would be achieved by ending traditional Medicare and increasing health care costs for beneficiaries.  Chairman Womack’s plan assumes savings for the federal government by privatizing Medicare and shifting costs to Medicare beneficiaries.

Privatizing Medicare with Vouchers/Premium Support Payments

Under premium support, when people become eligible for Medicare they would not enroll in the current traditional Medicare program which provides guaranteed benefits.  Rather they would receive a voucher, also referred to as a premium support payment, to be used to purchase private health insurance or traditional Medicare through a Medicare Exchange.  The amount of the voucher would be determined each year when private health insurance plans and traditional Medicare participate in a competitive bidding process.  Seniors choosing a plan costing more than the average amount determined through competitive bidding would be required to pay the difference between the voucher and the plan’s premium.  In some geographic areas, traditional Medicare could be more expensive.  This would make it harder for seniors, particularly lower-income beneficiaries, to choose their own doctors if their only affordable options are private plans that have limited provider networks.  Wealthier Medicare beneficiaries would be required to pay a greater share of their premiums than lower-income seniors.

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