Medicare – Financial Solvency Checklist


Checklist: How to Grade the Obamacare Repeal
Effect on Medicare’s Financial Solvency
Will the proposed replacement plan hurt Medicare’s
financial solvency? 

Important legislation in the Affordable Care Act (Obamacare)
has extended Medicare’s financial solvency from 2017 to 2028.

The following is a checklist of three measures in Obamacare that need
to be continued to maintain Medicare’s financial solvency.

☐ 1.  Maintain the existing Medicare tax of 0.9% on individual
         annual income above $200,000 
($250,000 joint) that goes
         directly to the Medicare Hospital Trust Fund.

☐ 2. Maintain the existing reduction in payments made by
        Medicare to hospitals and 
medical care providers, as well
        as other cost savings measures. (This includes decreased
Medicare payments for avoidable hospitalizations and an 
        improved Medicare fraud prevention program.)

☐ 3.  Maintain the existing reduction in overpayments made to
         private insurers administering Medicare Advantage plans.
Now, after the reduction, private insurers still receive 2% in 
         excess payments compared to similar patients in traditional Medicare.
         By continuing to not substantially overpay Medicare Advantage
         plans, the Medicare program will save $350 billion
 over the 10 years.

Any replacement proposal that does not include all three types of measures receives a failing grade in maintaining Medicare financial solvency. All three are important. Without these measures being continued, if Obamacare (Affordable Care Act) is repealed, you will then hear: “Medicare will become insolvent in the near future and we can’t maintain our current benefits.”

Some critics allege that the improvements in Medicare’s finances with Obamacare are illusory, but that is not true. Whenever an entity’s funding increases and outgoing payments decrease, finances are improved.