GOP Is Quietly Cutting Medicare, Too

 New Republic -   PAYGO is not a term that crosses many lips in daily discourse. But it may soon be used more widely, as its impact resonates in the aftermath of the passage of the so-called One Big Beautiful Act. While the enormous and damaging cuts in Medicaid have dominated discussion since the bill was enacted—cuts that will take millions of Americans off of health insurance, force the closure of many rural hospitals and nursing homes, and likely put enormous increased pressure on emergency rooms across the country—another shoe is soon to drop. And that is major cuts in its sister program, Medicare.

That reality has gone unmentioned in most media discussion of the changes soon to rock the American health care system. But in fact, the cuts in Medicare will begin even before those in Medicaid—ones conveniently put off by congressional Republicans until after the 2026 midterm elections. How is this possible, since Medicare is exempted from cuts in the budget reconciliation process used to pass the OBBB? The answer is in a longstanding practice, originally enacted in 1990 and built into the law and congressional rules, that requires pay-as-you-go budgeting—hence, PAYGO.

PAYGO is triggered when budgets over five- and 10-year periods add to deficits. And this “beautiful” bill does so bigly—to the tune of $3.4 trillion over 10 years. That means automatic cuts, known in the trade as sequesters, across much of the federal budget. Ironically, Medicaid, along with Social Security, Supplemental Security Assistance (SSI), and SNAP (food stamps) are exempt from sequesters. But Medicare is not. And it faces a whopping $533 billion in cuts over the next decade. The cuts, to be sure, are limited to no more than 4 percent of the program’s budget each year. But that is not a nominal sum, and it will cause devastating problems, and not just for seniors. Along with the massive cuts in Medicaid and the cuts to coverage under the Affordable Care Act, we are headed for a triple whammy against health care in America.

What could happen to Medicare if and when these cuts occur? First, payments to hospitals, physicians, and health care providers will be hit. Hospitals, and not just ones in rural areas, are already stretched thin. More cuts means closures or cutbacks in services— when any hospital closes, every other hospital in the area feels it; already overloaded emergency rooms in hospitals will be even more overloaded. And with payments already low, further cuts in Medicare reimbursements may mean more providers refusing to accept Medicare entirely, which will reduce access to care. Seniors may see higher out-of-pocket costs for drugs and medical devices. Those using Medicare Advantage plans may see cutbacks in dental, vision, and hearing coverage.