ACA's Impact on Seniors - two sides of the argument

Discussion of ACA's Impact on Seniors and Medicare

The government and ACA proponents focus on the intent of the act, and generally ignore secondary effects and market forces. They set up straw man arguments and then reject them. Their arguments typically say the intent of the ACA as expressed in its direct provisions are the only impacts. The opponents focus on the reaction of the health care providers to changes imposed as they would affect the customers. In general, price controls imposed by the government ostensibly to save money will result in a reduction of supply, i.e., providers will not participate in the program, so customers will end up with reduced or no health care options unless they can afford to go outside the system. This is what has happened in the British NHS and the Canadian Single Payer system. If you played chess, the proponent would always take a proffered sacrifice, and never see the mate in 6 moves. 

Read the Patient Protection and Affordable Care Act Law | HHS.gov/healthcare

Government and ACA Proponents  position

The Affordable Care Act & Medicare | Medicare.gov

Top 5 things to know about the Affordable Care Act (ACA) if you have Medicare:

1. Your Medicare coverage is protected.
2. You get more preventive services, for less. Medicare now covers certain preventive services, like mammograms or colonoscopies, without charging you for the Part B coinsurance or deductible. You also can get a free yearly "Wellness" visit.
3. You can save money on brand-name drugs. 
4. Your doctor gets more support.  care coordination.
5. The ACA ensures the protection of Medicare for years to come.

How the Affordable Care Act Helps Seniors
The Affordable Care Act (ACA), signed into law on March 23, 2010, aims to provide greater access to health care coverage, improve the quality of services delivered and reduce the rate of increase in health spending.  The ACA provides new ways to help hospitals, doctors and other health care providers coordinate care for beneficiaries so that health care quality is improved and unnecessary spending reduced.  Many seniors are already benefiting from provisions of the law such as receiving preventive services and paying lower Medicare prescription drug costs.  Below are some of the ways that the Affordable Care Act is helping seniors. 

• Medicare beneficiaries will save, on average, about $5,000 over the next 10 years due to lower drug costs, free preventive services and reductions in the growth of health spending.  Since passage of the ACA, more than 7.9 million people with Medicare saved over $9.9 billion on prescription drugs.

• Medicare beneficiaries are eligible to receive many preventive services with no out-of-pocket costs.  These include flu shots, tobacco cessation counseling, as well as no-cost screenings for cancer, diabetes and other chronic diseases.  

• In 2014, the Medicare Part B premium is $104.90 and the Part B annual deductible is $147, the same as in 2013.  The 2013 Part B monthly premium – $104.90 – was lower than previously projected by the Medicare trustees.

• The ACA reduces prescription drug prices for seniors and closes the coverage gap, known as the “donut hole.”  Each year, beneficiaries pay a reduced cost for brand name and generic drugs in the coverage gap.  The law closes the coverage gap in 2020.
• In 2014, Medicare beneficiaries in the donut hole receive a 52.5 percent discount on brand-name drugs and a 28 percent discount on generic drugs.
• Since the passage of the ACA, the average MA premium has declined by approximately 10 percent and enrollment has increased by 33 percent (about 15 million beneficiaries).

• Starting in 2014, the ACA provides additional protections for MA plan members by limiting the amount these plans spend on administrative costs, insurance company profits and items other than health care to 15 percent of their Medicare payments.
• MA plans also can no longer charge enrollees more than traditional Medicare for chemotherapy administration, skilled nursing home care and other specialized services.

• The ACA includes new resources and tools to protect taxpayer dollars by preventing fraud in Medicare and Medicaid by building on the efforts of the Department of Health and Human Services and the Justice Department.  Over the past five years, the government recovered over $19.2 billion from individuals and companies seeking fraudulent payments.  There are also tougher penalties for people who steal from Medicare and more law enforcement to identify criminals abusing the law and beneficiaries.

• The ACA establishes the Center for Medicare and Medicaid Innovation to test new ways of delivering care that are intended to improve quality while reducing the rate of growth in Medicare spending.  Examples include programs to reduce unnecessary hospital readmissions by coordinating care and services for patients when they leave the hospital.  Other provisions provide for the development of Accountable Care Organizations, bundled payments and medical homes – all intended to provider higher-quality, coordinated care for beneficiaries.

Medicare and Changes Under Affordable Care Act (ACA) - AARP

The nonpartisan Congressional Budget Office estimated that Medicare spending would be reduced by $716 billion over 10 years, mainly because the law puts the brakes on annual increases in Medicare reimbursement for Medicare Advantage, hospital costs, home health services, hospices and skilled nursing services. Hospitals have to absorb most of the reductions, about $260 billion over 10 years. Medicare Advantage will receive about $156 billion less.

Other cuts include $66 billion less for home health, $39 billion less for skilled nursing services and $17 billion less for hospice care — all by 2022.

Medicare costs will still grow, just more slowly than they would without the ACA. But some experts predict that beneficiaries will feel the impact. "The notion that you can take $700 billion out of Medicare reimbursements and not think you will see some impact over time is ridiculous," says economist Gail Wilensky, who directed Medicare and Medicaid in the George H.W. Bush administration and is a senior fellow with Project HOPE, an international health foundation.

ObamaCare Medicare: ObamaCare and Medicare

Even though ObamaCare "cuts" Medicare; it isn't really a cut, it's health care reform aimed at improving care for seniors and their families. The fact is, millions more seniors will be covered under the Affordable Care Act. Here are some things that the program does to improve Medicare:

• ObamaCare closes the "donut hole" that was causing Seniors not to be able to afford their prescriptions.

• ObamaCare expands existing coverage for seniors, including preventive care and wellness visits without charging you for the Part B co-insurance or deductible. 

• New initiatives to support care coordination, your doctor may get additional resources to make sure that your treatments are consistent.

• ObamaCare does not cut any benefits from Medicare Advantage.

• ObamaCare reduces payments to Medicare advantage

• ObamaCare reigns excess spending on Medicare Advantage.

• According to the CMS Medicare beneficiaries are expected to save, on average, about $4,200 over the next 10 years.

• The protection of Medicare is ensured for years to come.

The Middle Ground

Will Obamacare Affect Medicare? Myths and Facts - US News

• Medicare beneficiaries will pay more for their medications under Obamacare. Partially true. Under the ACA, higher-income Medicare beneficiaries – those who earn more than $85,000 per person or $170,000 per couple – pay slightly more for their prescription drug coverage, or Medicare Part D
• Medicare premiums are rising. Partially true. Medicare premiums are calculated by a complicated formula established long before the ACA, and those premiums rise annually.

The Affordable Care Act: How It Impacts Our Senior Population | Gianelli & Polley

ACA Opponent Position

Heritage Foundation - Obamacare’s Impact on Seniors: An Update

• Less Access to Care - seniors would have an increasingly difficult time accessing care. As the Trustees explain:

Medicare’s payments for health services would fall increasingly below providers’ costs. Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or (if total facility margins remained positive) shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.[3]

• Fewer Plan Choices - Medicare Actuary projected that the impact of Obamacare’s cuts would be significant: 

“We estimate that in 2017, when the MA provisions will be fully phased in, enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law).”[5] This means that these enrollees would have to enroll in the less generous traditional Medicare program, causing them to lose their current health plan and likely face increased out-of-pocket costs.

• Less Access to Physicians 

One of the only significant tools available to IPAB to reduce Medicare spending is to cut physician reimbursement rates. The trustees project that Medicare spending will exceed the target spending level for the first time in 2016, prompting IPAB to make its initial recommendations. Doctors are already leaving the Medicare program, likely due to ever-increasing government regulations and the habitual uncertainty regarding their reimbursement.[7]

• Higher Part D Premiums

According to the CBO, “enacting those changes would lead to an average increase in premiums for Part D beneficiaries of about 4 percent in 2011, rising to about 9 percent in 2019.”[9] 

• Higher Taxes

 The higher taxes on prescription drugs (effective in 2011) and medical devices (effective in 2013) will affect seniors especially, as they are more heavily dependent on those very products. Older people, of course, have higher health costs than younger people, but the existing tax deduction for medical expenses will be raised from 7.5 percent to 10 percent of adjusted gross income in 2013.

• Medicare’s Future Still Unstable

• Rather than implementing the structural reform desperately needed in Medicare,[16] Obamacare’s provisions threaten current seniors’ ability to access care and leave Medicare in jeopardy for future generations.

AMAC - The Hidden Healthcare Story - ACA's Impact on Seniors
by Margo Corbett -

Embedded in the ACA are deep reductions in Medicare reimbursements including payments to doctors, hospitals, nursing homes, and Medicare Advantage programs totaling $716 billion over ten years.
Cuts in 2014, with more coming in 2015, to Medicare Advantage (MA) plans have caused higher deductibles and co-pays, premium increases of 50-200 and the loss of plans and doctors for seniors many of whom are not able to find a new one who will accept Medicare patients.
Some seniors are being forced off MA plans altogether and have to take Medigap plans costing them thousands more per year.
The “carrot” to make seniors feel they are gaining something and to camouflage the loses when the ACA was rolled out was the $4 billion for drugs to help close the doughnut hole, “free” wellness appointments, and free screening tests that don’t come close to the $716 billion taken out of Medicare, changes that will cause far more hardship and devastation than the doughnut hole ever has or will.
“Free” annual checkup not so free for many people. Medicare patients find they are being charged a co-pay for a “sick” visit or expensive clinic charges ranging from $15 to hundreds of dollars at their free annual health screening appointment because the doctor asked them a question about a chronic condition or they mention a problem. The doctor is then allowed to bill for both the annual visit and a sick visit.

Assessing Alternative Modifications to the Affordable Care Act: Impact on Individual Market Premiums and Insurance Coverage | RAND

Key Findings

• Eliminating the Affordable Care Act's (ACA's) Tax Credits Would Cause Large Declines in Enrollment and Substantial Increases in Premiums

• Without the ACA's premium support, premiums rise by nearly 45 percent, and enrollment falls by nearly 70 percent.
• By subsidizing coverage, the federal government helps to lower premiums in the ACA-compliant market.

• Eliminating the ACA's Individual Mandate Would Cause Large Declines in the Number of People Insured

• Without the ACA's individual mandate, the number of people enrolled in the individual market falls by more than 20 percent, and premiums rise by about 7 percent.
• This suggests that the mandate is important to achieving the Affordable Care Act's goal of nearly universal coverage.

• Reduced Young Adult Enrollment Is Associated with Slight Premium Increases

• A 1 percentage point reduction in the share of young adult enrollees in the individual market is associated with a 0.44 percent increase in premiums.
• The ACA's tax credits incentivize young people who are tax-credit eligible to remain enrolled.
• A majority of enrollees at all ages have spending low enough to benefit the risk pool. In fact, for any given expenditure level, an older person is better for the risk pool than a younger person, because the older person can be charged more.

• Alternative Subsidy Structures, Such as Vouchers, Could Cause Premiums to Be More Sensitive to the Age Composition of Enrollees

• With a fixed-dollar voucher, a 1 percentage point reduction in the share of young adults enrolled in the market would be associated with a 0.73 percent increase in premiums.
• The ACA's premium tax credit structure protects enrollees against premium escalation because, once they have met the required income contribution, the cost of additional premium increases are fully borne by the federal government.