Since its introduction in 1965 under then-President Lyndon B. Johnson, Medicare has become a major health insurance program for people ages 65 and older, as well as young people with disabilities. Nearly 66 million people were enrolled in Medicare as of March 2023, according to the Center for Medicare Advocacy.
It would be dramatic to say that Medicare is in danger; however, it would not be dramatic to say that the program is under financial pressure due to higher health care costs and an aging population. KFF reported that the Hospital Insurance Trust Fund is expected to be depleted in 2036 based on current projections from the Medicare Board of Trustees in its 2024 report.
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What will happen to Medicare by 2036? And more immediately, what might happen to the program under Trump’s leadership, should he win a second term?
Josh Thompson, CEO of Impact Health USA, spoke with GOBankingRates about how a second Trump term could change Medicare.
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Increased privatization and Medicare Advantage
Trump’s administration previously favored Medicare Advantage plans, which offer private alternatives to traditional Medicare health insurance. A second term would likely continue that trend, offering more plan options and potentially innovative services.
Increased privatisation could promote competition, reduce costs and improve service quality, ultimately benefiting beneficiaries.
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Reforms in prescription drug pricing
During his tenure as the 45th President of the United States, Trump made efforts to lower prescription drug prices through executive orders, and we will likely see his administration continue to push these initiatives over the next four years.
“This could include international price indexation or other measures to reduce prescription drug costs, which would significantly benefit Medicare beneficiaries who face high drug costs,” Thompson said.
Lump sum subsidies and state control
Thompson said Trump could push for block grants that would give states more control over Medicare funds.
“This could lead to tailored, local solutions, but also to inequities in care depending on state administration,” Thompson said. “Block grants could encourage states to innovate and manage resources more efficiently, potentially improving the quality of care.”
Ease of use and technological integration
This could happen regardless of who becomes president, although Thompson says it is likely under the Trump administration: The focus will be on using technology to streamline Medicare processes.
“Simplified digital interfaces for enrollment and plan management could improve the user experience and make it easier for seniors to navigate their healthcare options,” Thompson said.
Tax implications and financing problems
Things could get particularly exciting with regard to tax implications and financing.
“Potential tax cuts under Trump’s policies could lead to funding problems for Medicare,” Thompson said. “This could require adjustments to benefits or cost-sharing measures, which would affect recipients’ out-of-pocket costs.”
Stay up to date
Ultimately, Trump’s Medicare policies could lead to increased privatization and changes in drug prices, which in turn could impact the way enrollees interact with Medicare. It’s important to stay informed regardless of who becomes president.
“Staying up to date on these potential changes is critical to navigating the evolving healthcare landscape,” Thompson said.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to objectively cover all aspects of the economy and present balanced reporting on politically focused financial topics. For more coverage on this topic, visit GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 6 Things That Could Happen to Medicare If Trump Wins the 2024 Election
