Experts Warn President Trump’s New Medicare Plan “Is A Bad Idea”

Even before the pandemic, Medicare Part A — or Hospital Insurance (HI), the program’s primary trust fund — already faced multiple financial hurdles. The recession has exacerbated its problems, but a recent move from President Trump is adding another challenge. 

At the end of September, the president announced a new program that would issue $200 Medicare cards to older Americans, which many experts believe worsens HI’s financial difficulties.

According to James Capretta, a resident scholar at the American Enterprise Institute and a senior advisor at the Bipartisan Policy Center, the president’s plan would leave HI strapped for cash as soon as 2023.

Capretta told Yahoo Finance in an interview that whoever wins the next election will “have about two years to figure out what to do.”

The authors of the 2020 Medicare Trustees report wrote that “[i]n the year of asset depletion, which is projected to be 2026 in this report, HI [Medicare Part A] revenues are projected to cover 90% of incurred program costs.”

Researchers found that an estimated one in six Americans are covered by Medicare Part A. That includes 61 million people, of whom 52.6 million are at least 65 and 8.7 million with disabilities. By the end of 2019, the program’s trust fund reported $322.5 billion in receipts and a $194.6 billion surplus.

Capretta noted that “the trustees released that report without any idea that the pandemic was about to hit.” He added that the additional burdens are “a recipe for a lot of trouble.”

The Medicare Trustees report was validated by data from the latest study from The Commonwealth Fund, which emphasized the program’s obstacles. The research revealed that widespread job losses among older Americans also meant sweeping health insurance losses, resulting in a flood of applications that have left the program stretched exceedingly thin.

Medicare is a vital lifeline for millions of seniors. Additionally, it is essential for sustaining the ongoing employment of the nation’s older workforce to mitigate the “long-term effects on Medicare spending and people’s financial security for the remainder of their years,” noted the Commonwealth study.

In 2019, the Congressional Budget Office’s (CBO) extended outlook predicted that Medicare expenses would increase faster than GDP due to the rapid growth of the US’s aging population and accelerated healthcare inflation.

“Much of the spending growth for Social Security and Medicare results from the aging of the population,” the CBO stated last year. “As baby boomers age and as life expectancy continues to increase, the percentage of the population age 65 or older will grow significantly, boosting the number of beneficiaries of those programs.”

Capretta noted that the financial aspects of Medicare’s predicament are not only the most significant but the most difficult to overcome. “It’s a reflection of really a broader societal problem. We don’t have enough discipline on medical care costs… something’s going to have to give.”

Now that the Trump administration has pledged to complimentary $200 Medicare cards, the program is up against an even more significant obstacle. “33 million Medicare beneficiaries will soon receive a card in the mail containing $200 that they can use to help pay for prescription drugs,” President Trump declared last month. “Joe Biden won’t be doing this.”

The program is estimated to have an $8 billion price tag, and officials are rushing to make and distribute the cards before the election. “This,” Capretta said, “is a bad idea from A to Z,” citing the flawed model for fiscal onus and the Medicare program. “Moreover, it seems not only is it a bad idea, but it seems to be just completely mishandled,” he added.

The White House is allegedly planning to issue letters to Medicare recipients to inform them about the cards before the election. However, it’s unlikely many people will receive the cards until the election is over, leading Capretta to tell reporters, “I think the whole thing is too contrived to pass the laugh test.”


  • Werschkul, Ben. “Trump’s Free $200 Prescription Card Is ‘a Bad Idea from A-Z’: Former Bush Official.” Yahoo! Finance, Yahoo!, 12 Oct. 2020,

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