An old adage in the nation’s capital that many legislators have abided by is to avoid issues that are considered to be as perilous as being exposed to a subway third rail. The basic idea is that if you touch it, you will perish. Two prominent third rail items are the Social Security and Medicare programs. A vivid illustration occurred on Capitol Hill on February 7, 2023 during President Biden’s state of the union address when he suggested that Republicans may be inclined to damage those two programs, such as by reducing benefits or raising taxes.
As stated at the opening of the Olympics every two and four years, “Let the games begin.” Democrats initiated their concerns by pointing to a proposal by Senator Rick Scott (R-FL) to sunset all federal programs every five years. If not renewed by fresh legislation then, they would be allowed to expire. Subsequently, he revised his plan by indicating that Social Security, Medicare, national security, veterans benefits, and other essential services would be specific exceptions.
Whenever Democrats and Republicans are under assault, they have a gift for rapidly turning matters around so that any former accuser now becomes the accused. After vigorously denying that they would ever adopt behavior causing distress among Social Security and Medicare beneficiaries, Republicans retaliated by pointing to new rules from the Centers for Medicare and Medicaid Services (CMS) in the Biden administration aimed at reducing overpayments to Medicare Advantage plans. Approximately 40% of all beneficiaries are enrolled in Advantage plans that serve as an alternative to traditional Medicare by being administered by private health insurers. These plans now must pay back the government for overpayments as shown by a recently finalized rule that would over 10 years recoup more than $4 billion in overpayments to plans. Also, by offering to increase CMS support of Medicare Advantage by only 1% next year, the figure is looked upon as a benefit cut because it fails to keep pace with inflation.
A steady growth in the number and proportion of individuals in the U.S. reaching age 65 every year guarantees that Congress must continue to devote attention to preserving the solvency of both the Social Security and Medicare programs. A related issue is the Medicaid program, which is funded by federal and state governments. It faces many of the same problems as Medicare, such as a growing number of older beneficiaries, many of whom must deal with multiple crippling health and health-related social problems involving long-term care. The COVID-19 public health emergency, which has been in effect since January 2020, is scheduled to end on May 11 of this year. A result is that states have had to begin a process of reassessing eligibility for their Medicaid-covered residents. Under the Families First Coronavirus Relief Act (FFCRA), states received enhanced federal funding in exchange for covering all enrolled Medicaid beneficiaries continuously. This requirement ends on April 1, after which states can begin disenrolling individuals who are determined to be eligible for Medicaid no longer.