![]() ![]() After TCJA ended the individual mandate tax, the number of uninsured Americans shrank. In the stronger economy made possible by TCJA, even the New York Times noted that DI claims have plunged as people with disabilities are joining the workforce in droves.ħ. Americans who claim Social Security Disability Insurance (DI) also become eligible for Medicare. Medicare solvency improves when fewer Americans need Disability Insurance. The Medicare trustees cited this repeal as one of the reasons for their new insolvency date, yet CBO found IPAB repeal was fully offset by other health care savings, including some provisions that reduced Medicare spending on hospitals.Ħ. This lack of accountability concerned both Republicans and Democrats, so Congress repealed IPAB on a bipartisan basis. Obamacare created the Independent Payment Advisory Board (IPAB), a panel of unelected bureaucrats that could cut Medicare payments by fiat. “Republican policies” did not increase Medicare spending on hospitals. Because this revenue is not a significant source of funds for Medicare, TCJA’s tax relief for seniors has little effect on solvency and will be far outweighed by stronger payroll tax collections.ĥ. By lowering income tax rates, TCJA softened the impact of this tax so seniors can keep more of their Social Security. This tax hike made up to 85% of a senior’s Social Security benefit subject to income taxes. Seniors are paying less taxes on their Social Security benefits, and that’s good. In 1993, President Clinton and a Democrat-controlled Congress raised taxes on Social Security benefits and directed the revenue to the Medicare trust fund. ![]() ![]() CBO found that TCJA will improve both wages and employment, and CBO now projects $300 billion more in payroll tax collections over 2018-2027 than it did before TCJA became law.Ĥ. Payroll tax collections, which finance both the Social Security and Medicare HI trust funds, increase when taxable wages are rising and more people have jobs. TCJA strengthened the major funding source for Medicare HI. Further, their 2018 projection has not been updated to reflect improving economic conditions after TCJA.ģ. However, the trustees also admitted their economic projections for 2017 were inaccurate, which is the first reason listed for the new insolvency date. The Medicare trustees used outdated and unreliable economic projections. The 2018 Medicare trustees report indicates that their new projected insolvency date is three years earlier than they projected in 2017. After TCJA became law, CBO pushed back the insolvency date to 2026. Before TCJA became law, the Congressional Budget Office projected this trust fund would have a zero balance in 2025. ![]() The Medicare HI trust fund finances hospital-related services for Medicare beneficiaries. CBO found that after TCJA, Medicare solvency improved. It’s time to separate fact from fiction on whether the trust fund is in better or worse shape due to the Tax Cuts and Jobs Act (TCJA).ġ. Both the 2018 Medicare Trustees Report and the Congressional Budget Office (CBO) project an insolvency date of 2026 for the Medicare Hospital Insurance (HI) trust fund. ![]()
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