Today, the Big, Beautiful Bill will become law once President Donald J. Trump puts ink to paper at a big, beautiful signing ceremony in Iowa. Despite opposition from every Democrat in Congress, the House and Senate enacted critical measures to benefit millions of blue-collar workers and their families. It’s another promise from the campaign trail that has become a reality.
Anyone who listened to a few minutes of House minority leader Hakeem Jeffries (D-N.Y.)’s seven-hour diatribe against the legislation is aware that an onslaught of misinformation is heading to their televisions, radios, and email inboxes. In Mr. Jeffries’s world, reducing taxes on tips, overtime, Social Security, and business investment is equivalent to the apocalypse. What many people may not know, and what the minority leader won’t tell you, is that the typical family will receive an additional $11,000 in take-home pay, and an estimated 7.2 million jobs will be created.
Perhaps nowhere is the gap between reality and rhetoric clearer than in the bill’s efforts to reform America’s out-of-control health care system. Because the bill eliminates wasteful and ineffective Obamacare programs, creates a work requirement for some programs, and blocks access to taxpayer-funded health benefits for illegal aliens, Mr. Jefferies and his cohorts argue that people will “die unnecessary deaths.” Nothing could be farther from the truth.
The legislation included multiple provisions that expand the use of Health Savings Accounts (HSAs). Health Savings Accounts are a personal savings account you can set up to pay certain health care costs. Tax-free contributions can be made to these accounts both by individuals and employers. Nearly 40 million Americans use these accounts to pay for medical expenses, and that number would be significantly higher if a preposterous prohibition weren’t in place.
Currently, federal law prohibits individuals enrolled in Medicare from contributing to HSAs or receiving employer contributions. That means seniors who start collecting Social Security lose access to these valuable savings accounts, even if they’re still working and their employers are willing to contribute monthly to their HSA accounts at no cost.
The House version of the bill took a crucial step toward protecting Medicare’s financial future by reforming the law so that seniors who receive Social Security benefits can accept free HSA contributions from their employers. This commonsense reform would protect taxpayers by reducing seniors’ reliance on costly, taxpayer-funded government programs, such as Medicare.
Unfortunately, the Senate omitted this crucial fix from its version of the bill. Due to time restraints, the House took up and passed the Senate version, so the pro-senior measure was left on the cutting room floor. With this dangerous omission, the Senate is seemingly ignoring Medicare’s looming insolvency and the fact that failing to act will ultimately saddle taxpayers with even bigger bills.
Medicare is already on the brink of a financial crisis. The Medicare Trustees’ latest report warns that the Hospital Insurance Trust Fund — which pays for Medicare hospital stays — could be depleted in as little as three to five years. After that, Medicare would only be able to cover about 90% of hospital insurance claims, leaving seniors vulnerable to cuts or higher costs.
The House and Senate must get back to work and restore this provision.
Congress should help seniors gain access to better health care coverage and reduce their reliance on Medicare’s taxpayer-funded programs. Allowing Social Security recipients to contribute to HSAs should be a key part of that solution.
This is not a small chunk of change, as nearly one in five Americans over age 65 still works. Many of those workers would get free employer health care allowances if this law was not on the books. So instead, they are using taxpayer-funded health care services.
When seniors have access to HSAs, they’re more likely to stay on employer health plans longer and delay shifting to Medicare’s Parts B and D, which cover outpatient care and prescription drugs. That’s important because taxpayers cover roughly 75% of the cost of Medicare Parts B and D. If the Senate Finance Committee adds this HSA fix into its version of the Big, Beautiful Bill, those costs can decrease in tremendous fashion.
This is a textbook case of a broken government rule doing real harm. The restriction that ties Social Security to Medicare enrollment wasn’t created by Congress. It was inserted into Medicare’s program manual by bureaucrats in the 1990s. The Legislative Branch needs to assert its authority by fixing this.
As previously mentioned, Medicare’s insolvency is not some far-off problem. It’s right around the corner. Without reform, the program’s trust fund could be empty in just a few years, forcing cuts or tax hikes on seniors and working families.
We must protect Medicare, give seniors more choices and better access to health care, save taxpayers’ money, and give seniors the tools they need to secure their own health and financial well-being. Allowing working seniors to receive tax-free benefits from their employers would be a major step in that direction.
Chuck Muth is the president of Citizen Outreach.
Image: Pkd2016 via Wikimedia Commons, CC BY-SA 2.0.
