Republicans are playing a shell game by hiding the sneak attack on Medicare
that they tucked into their (2025) law. CBO has now confirmed it.
~Sheldon Whitehouse, U.S. Senate, August, 2025
The test of our progress is not whether we add more to the abundance of those who
have much; it is whether we provide enough for those who have too little.
~Franklin Roosevelt, January 20, 1937
Donald Trump and the Republican Party have begun surreptitiously privatizing Medicare.
That should elevate Saving Medicare as a Democratic Party priority in 2026.
Americans pay twice as much for health care as Canadians, Australians, or the French. One in three Americans had to scrimp in 2025 to pay medical costs – driving less, selling blood plasma, even delaying having children or buying a home. Health care prices rank at the top of the list when it comes to Americans’ affordability worries, with 82% dissatisfied with its costs - the highest frustration level ever recorded by Gallup. That is, until they turn 65. Then they delightedly enroll in Medicare, the extremely popular health program for seniors
But Medicare has a problem, a big problem. Well, two problems actually.
Medicare Insolvency in 2032
First, the program is insolvent.
Medicare’s huge Hospital insurance program covers more than 60 million seniors (and 7 million younger disabled people) but is running at a deficit, burning through cash reserves. Program trustees project that those reserves will be exhausted by 2032. Thereafter, Medicare payroll tax income will cover just 88% of hospital and hospice bills, forcing an immediate 12% reduction in benefits and services. And the cuts will grow deeper thereafter. Some 81% of Americans, including 78% of independents, worry about those benefit cuts. (Medicare’s smaller insurance programs covering physician services and medicines are on sounder financial footing.)
Republicans Privatizing Medicare
Medicare’s second big problem is that the Republican Party and its billionaire donors really despise it. They are ideologically opposed to government spending on health care, instead believing that good health should be auctioned by profit-maximizing providers to the highest bidders.
Republicans have opposed Medicare since its original establishment by President Johnson in 1965. They have been gradually privatizing it for years – replacing traditional government administered Medicare with Medicare Advantage (MA) plans run by private insurance companies. MA insurers profit by curtailing seniors’ choice of physicians and hospitals, and by limiting care, including requiring preapproval of needed care. MAs have lured seniors in the past away from traditional Medicare thanks to a 20% bonus. But going forward, Republicans are proposing to automatically enroll new 65-year-olds in private MA plans.
Moreover, using obscure budget rules, the Republicans in 2025 cut Medicare benefits – raising enrollee out-of-pocket costs – cuts which the Congressional Budget Office found will total $536 billion over ten years. The money was used instead to fund Trump’s tax cuts for corporations and elites.
This privatization means abandoning the 60-year pillar of Medicare to provide guaranteed coverage for a sweeping set of essential, standard medical benefits to all seniors.
In stark contrast, since the New Deal, Democrats have viewed affordable, accessible nationwide health care as a basic human right akin to clean water. They established Medicare and other government-coordinated health care programs for veterans, children, lower-income families, and military personnel. In 2021, for instance, President Biden’s Medicare upgrades included lowering drug prices and capping out-of-pocket drug costs at $2,000 annually, including capping insulin at $35/month.
Saving Medicare in 2026
These dynamics – a popular program being dismantled by Republicans in order to fund tax cuts for the 1% – present a tantalizing 2026 political opportunity for Democrats. Some 58% of pivotal independent voters, for instance, believe health care will become even less affordable in 2026. And 44% say health costs will have a “major impact on which party’s candidate they would support.”
Saving Medicare begins with establishing a solid financial foundation through a variety of steps. The Medicare payroll tax and the net investment income tax rate on incomes over $400,000 could be increased, for instance, as proposed by President Biden in 2024. And a number of Republican tax cuts for corporations and elites in the 2017 law ($1.5 trillion over a decade) and the 2025 law ($4.1 trillion) can be reversed. That additional revenue would allow the Republicans to restore their 2025 benefit cuts to Medicaid and other programs. It would allow the establishment of an out-of-pocket annual spending cap for all Medicare enrollees. And it would permit adding vision, hearing, and dental benefits to Medicare, favored by 92% of Americans.
Expand Medicare: Pathway to Affordable Health Care
Working-class voters are particularly important to Democrats, defined as the bottom two-thirds of the income distribution without four-year college degrees. They are the most economically stressed Americans, and notably, three-quarters (72.4%) of them favor expanding Medicare. Independents are another key voter cohort (with much overlap), and 62% of them also favor expanding Medicare.
A number of specific expansion proposals have been suggested, including lowering the Medicare eligibility age to 60 or offering Medicare as an option on the Obamacare exchanges. Any expansion of Medicare would include maintaining the present subsidized employer-linked private health insurance market that provides coverage to 180 million people under age 65 - 77% of whom are satisfied with that system.
Reform is needed to address the uniquely American system where a majority of care is provided by profit-maximizing corporations. Its central defect is reliance on corporate care providers, incentivized to skimp on care, which sharply conflicts with the altruistic motivation of health professionals who strive to put patient care above institutional profits. As Nobel economist Kenneth Arrow has pointed out, physicians are not “salesmen.” A first reform step would be to ban private equity (PE) firms from owning physician and other medical groups. The pernicious PE business model – “buy and bust” – is toxic to good medical practice. For instance, hospitals owned by PEs have experienced a 25.4% increase in hospital-acquired adverse medical events (falls, infections) “suggesting poorer quality of inpatient care.”
Cost Containment
Another benefit of Medicare expansion would be to corral prices.
It is significant that the basic elements of Medicare are also the centerpieces of foreign health care systems that effectively corral costs. These rigorously regulated blue-ribbon systems in Europe, for instance, feature quality and cost parameters designed by medical professionals, with most care provided by private practitioners – at just 50-60% of American costs.
Medicare reimburses some procedures at high prices, but overall, its cost management keeps reimbursement rates at 48% of private commercial rates. That success is why the nation’s second-largest physician organization – the American College of Physicians - supports Medicare expansion.
A majority of American health care is delivered by giant hospital chains, PEs, insurance conglomerates, and pharmaceutical companies, relentlessly maneuvering to raise prices. Government cost caps, reforms to Medicare Advantage risk adjustments, rules to prevent pharmaceutical firms from gaming patents, and vigorous antitrust enforcement to limit health market concentration are important. But the expansion of low-cost Medicare will play a central role by creating market forces that reduce commercial health care prices through meaningful competition.
An important further step to corral costs is expanding the supply of health care providers. That includes expanding medical and nursing schools, physician residency programs, physician assistants, and nurse practitioners.
Saving Medicare
Other topics, such as affordability and Trump's corruption, will be important in the 2026 and 2028 elections. But stabilizing and expanding Medicare in a fiscally sound fashion is a compelling political issue in its own right.
And success in those elections will give the Democratic Party a mandate to deliver Americans affordable, accessible medical care.
George Tyler is a former deputy assistant treasury secretary and World Bank official. He is the author of books including Billionaire Democracy and What Went Wrong.
