In reality, however, the trustees report also projects higher hospital spending in the future, and one of the reasons is the rising numbers of uninsured persons and rising uncompensated hospital care due to the repeal of the Affordable Care Act’s health coverage requirement. The report also projects lower revenues going into the Hospital Insurance trust fund because of lower projected Medicare payroll tax revenue—the result of both lower wages as well as lower revenues from taxes on Social Security benefits due to the recent tax cut legislation.
While cost-savings measures may be able to stave off shortfalls, they are unlikely to shore up Medicare in the long run. To date, the only prominent politician to offer a solution is Sen. Marco Rubio, who has proposed converting Medicare to a voucher system. The Florida Republican’s plan would allow seniors to apply government-issued vouchers either to conventional Medicare coverage or toward a private insurance policy.
Rubio argues vouchers would give retirees more choice in terms of which doctors they see and which hospitals they visit.
Needless to say, scrapping Medicare as we know it is not a plan AARP has endorsed for its 39 million members.