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Trump’s $90 Medicare Checks Will Undermine The Program They Claim To Protect

Sending cash to seniors weeks before an election does nothing to improve Medicare, and it leaves most seniors out entirely.

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A few weeks ago, I wrote about how President Trump’s decision to send rebates to some Obamacare customers represented sound policy. His more recent announcement about Medicare rebates to seniors, not so much.

While the Obamacare rebates represented a refund of user fees that the Obamacare enrollees themselves had paid, the Medicare rebates instead comprise general taxpayer dollars — in other words, a shift of cash from the young to seniors. More importantly, Medicare faces major financing challenges in the next few years, such that spending — as opposed to saving — more cash on the program will further undermine its solvency.

Explaining the ‘Slush Fund‘

In a social media post announcing the move, the president said the checks of $90 each, paid out to about 21 million seniors, would “come from the Medicare Improvement Fund (MIF), a pointless ‘Slush Fund.’” That oversimplifies matters slightly, as the MIF represents a cross between a “slush fund” and a checking account.

Congress created the fund in 2008, and since then has used it to “park” budgetary savings from health care legislation. Practically every year — more often, several times a year — Congress passes measures extending various mandatory health spending programs, ranging from changes to Medicare physician payments (aka the “doc fix”) to spending on community health centers.

In most cases, lawmakers reduce spending elsewhere to pay for the new disbursements. But the sums don’t always align precisely. To use a hypothetical example, assume Congress wants to pass a “doc fix” that would cost $5 billion, but the policies used to pay for this new spending would generate $6 billion in savings.

That’s where the MIF comes in. Congress would “park” the additional $1 billion in savings........

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