What will happen to Medicare

Many Democrats have said that one major focus of this legislation is to reduce dependency on Medicare. It has many provisions that are aimed at just that. Right now, there are many people who refuse raises, taking on extra jobs, etc because they would lose Medicare benefits if they earned more money. This legislation introduces a system of subsidies where you pay a percentage of your income for health insurance and the government foots the bill for the rest.

For a family of 4, the poverty line is at $22,050 (more here). According to the table given here (page 4), a family 133% of the poverty line ($29327) would only pay 3% of their annual income on health insurance premiums ($879.80/year or $73.32/month). This would be far more reasonable than the current annual average of about $13,000 for a family of four (which is about 44% of this person's income).

There is a lot of debate over how the government will pay for the remaining portion of the premium, I've talked about that in other posts.

The legislation also includes significant cuts to Medicare spending. The CBO said "It

is unclear whether such a reduction in the growth rate of spending could be

achieved, and if so, whether it would be accomplished through greater

efficiencies in the delivery of health care or through reductions in access to

care or the quality of care. The long-term budgetary impact could be quite

different if key provisions of the legislation were ultimately changed or not

fully implemented." (here, page 14)

That is to say that rationing of care is a possibility. The CBO also says that they don't even know if it is possible to reduce Medicare spending to the levels that this bill requires.

The bill also reduces reimbursement rates to doctors. The annual increases are expected to be below the rate of inflation. Many have voiced concerns that this reduction will increase costs for those with insurance.

The Conclusion

There are some positive measures in the bill in terms of Medicare; however, it introduces significant cuts that will have disastrous effects if the costs of health care are not significantly reduced.