It took a while, but most of the pivotal races in the elections held nearly two weeks ago have been decided. Democrats will retain control of the U.S. Senate, even with a run-off in Georgia still to come. Republicans appear to have won a narrow edge in the U.S. House of Representatives.
Both major political parties have ideas about how Medicare should be reformed. What Medicare changes could be on the way after the November elections?
Medicare changes supported by Democrats
Several key Medicare changes favored by Democrats were on the way, even before the recent elections, thanks to the passage of the Inflation Reduction Act. Medicare will be able to directly negotiate with pharmaceutical companies on the prices of high-cost drugs beginning in 2024. Medicare beneficiaries will also have a yearly cap on out-of-pocket costs for prescription drugs beginning in 2025.
What other changes to the federal health program do Democrats support? President Biden's proposed budget for 2023 contains some ideas. For example, the president wants to expand mental-health benefits for Medicare recipients. Specific proposed changes include eliminating the 190-day lifetime limit on psychiatric services and covering up to three behavioral-health visits per year, with no costs to patients.
There are also other Medicare changes that many Democrats have tried but failed to pass over the past year. Probably the most high-profile of these proposals was to expand Medicare to include comprehensive dental care. Currently, the federal program only pays for limited dental services required to treat a covered medical condition.
Medicare changes supported by Republicans
The most controversial change to Medicare has been promoted by two GOP senators. Sen. Rick Scott (R-Fla.) wants to require all federal programs, including Medicare and Social Security, to be put up for reauthorization by Congress every five years. Sen. Ron Johnson (R-Wisc.) has called for annual approval of the two programs.
Neither of those ideas appears to have gained much traction with fellow Republicans. However, some Medicare proposals have picked up significant GOP support. The proposed 2023 budget put forward by the Republican Study Committee (RSC), which includes more than 150 current GOP representatives, features several Medicare reforms.
The biggest proposed Medicare change in the RSC's budget is to align the eligibility age with the Social Security full retirement age. The RSC also wants to gradually increase the eligibility age by indexing it to life expectancy. This change would help ensure the solvency of the federal program, according to its proponents.
The RSC also would like to create an integrated "Fed plan" that includes all of the traditional benefits provided by Medicare Parts A, B, and D. This "Fed plan" would compete against private Medicare Advantage plans and stand-alone Part D prescription-drug plans on regional exchanges. Seniors would receive premium support, based on their income, to purchase the plan that suited them best.
Another key Medicare change included in the RSC budget is to reform Medicare supplemental insurance known as Medigap plans. The RSC wants to cap Medigap cost sharing for Medicare beneficiaries to $7,500 per year. There would be a $750 deductible with all Medigap plans. After this deductible is met, all Medigap enrollees would have a standard 10% coinsurance rate.
Most likely Medicare changes
President Biden's proposed expansion of mental-health benefits is perhaps the most likely Medicare change that could be on the way. However, it's certainly not a slam dunk.
The federal government is currently being funded through temporary spending measures. If the current session of Congress doesn't pass a budget for fiscal-year 2023, the new Congress will decide what to do. With a Democrat-controlled Senate and a GOP-led House on the way in 2023, there's a distinct possibility (and arguably a high probability) that no budget will win approval. That would mean that the government would have to be funded by stopgap continuing resolutions.
This scenario of a divided government will probably mean that no substantial Medicare changes are in store as a result of the November elections. That could be good news or bad news, depending on how you look at things. But seniors can at least look forward to lower Medicare Part B premiums and a big Social Security cost-of-living adjustment next year.