New National Legislation Aims to Save Money for Health Care Reform Law

August 2011

An effort to fix an oversight in the health care reform law would include Social Security benefits when determining Medicare and insurance subsidy eligibility. This change could save $13 billion over ten years.

The savings comes primarily from middle-income early retirees, who under the current version of the law would qualify for Medicaid in 2014. Senators Michael Enzi (R, WY) and Ben Nelson (D, NE) have introduced bills addressing this issue in the Senate, while Rep. Diane Black (R, TN) has introduced companion legislation to Sen. Enzi's bill in the House of Representatives.

The Congressional Budget Office studied the legislation, and found Medicaid enrollment would decrease by 500,000 to one million people annually, which would actually save $32.9 billion over the next decade. The group most likely to lose from this proposal? People with disabilities, who have a two year waiting period after their first Social Security disability payment before they become Medicare-eligible. They will lose Medicaid access during these two years if fix-it legislation becomes law. The Obama Administration has been working to try to change the amend the legislation so that disabled Americans will not lose their health insurance.

"We are examining this proposal and options to address this matter," an administration official reported told The Hill publication. "We remain committed to protecting the health of people with disabilities."