During the 2016 national election Republican candidates ran on platform of repealing the Affordable Care Act (ACA), they didn’t run on a platform of cutting Medicare. As conversations and planning for repealing the ACA heat up, the end result of a repeal is becoming clearer to many people. The ACA contains many provisions that impact both Medicare beneficiaries and providers. The ACA cannot be repealed without making cuts to Medicare.
The ACA includes many provisions intended to assure the solvency of Medicare, as well as provisions to improve the health of seniors. In order to assure Medicare solvency, the ACA modified the way and amount some Medicare providers are reimbursed. Policy makers also changed the way Medicare fraud and abuse are handled, with the goal of cost savings.
In addition to changes in Medicare structure, the ACA made several changes to Medicare benefits. With the ACA, Medicare now covers 100% of many preventive services, such as well checks, for seniors. This means Medicare beneficiaries have no out-of-pocket costs for these services. With the ACA, Medicare has also been on track to completely close the prescription coverage “donut hole” or coverage gap by 2020. The ACA changes in prescription coverage can make a big difference for someone with an income of $31,742 (the average income of those over 65 in 2012) who is paying thousands of dollars per year in out-of-pocket prescription costs even with the assistance of the ACA. If the ACA is repealed, the “donut hole” will go back to pre-ACA levels, out-of-pocket costs will grow higher and prescription costs may be potentially out of reach for Americans with tight budgets. Having to decide which prescriptions to fill and not fill due to cost is a decision no senior wants to have to make.
If the ACA is repealed, policy makers will be in the unenviable position of having to figure out a way to assure Medicare solvency without raising taxes, which runs counter to Republican philosophy. Changes to Medicare will need to occur and the most likely changes are concerning for seniors on fixed budgets. “Premium support” is the most likely option for Medicare changes. This potential proposal would operate like a voucher system. Seniors will receive a voucher or credit to purchase Medicare coverage. Better health insurance coverage will cost more. The other idea that has been floated for years is changing Medicare into a block grant system. In this system, states would receive a lump sum of money to administer Medicare according to the needs of seniors in their state.
Both the voucher and block grant systems rely on the philosophies of privatization, competition and less federal government interference to work. If more competition among private corporations is allowed, it is thought, seniors will receive better quality care for less money. If states are allowed to set requirements for Medicare, the unique needs of the seniors in each state will be met. Unfortunately, the outcomes of systems based on these principles is likely to fail Medicare beneficiaries.
Currently, there are federal requirements in place for Medicare in order to assure benefits are provided consistently to recipients across the U.S., regardless of income or level of health. Scaling back on base level standards for Medicare on a federal level would open the door to large variances in Medicare benefits depending on state of residence, income and health status. Prescription drug coverage could become especially problematic as a costly benefit for heath insurance companies to provide. Prescription coverage has only been part of Medicare since 2006 and there isn’t assurance that coverage would continue. Competition among private insurance companies is likely to lead to a race for enrollment of younger and healthier beneficiaries. There won’t be incentives to cover sicker beneficiaries whose health needs and costs are higher. This means that those with long term chronic health conditions, such as diabetes, Alzheimer’s and cancer will have very limited options for Medicare coverage. Some argue maintaining a traditional system of Medicare, as well as a voucher system, could be an answer, but this would likely mean traditional Medicare would have a pool of beneficiaries with lower incomes and poorer health, making the system unsustainable.
There are no simple fixes to the issues with health care coverage in the U.S., including Medicare coverage. The ACA was a good first step. The provisions for Medicare helped many seniors, especially seniors just barely able to afford their prescriptions. With the repeal of the ACA, senior Americans have a lot to lose.
Cossy Hough, LCSW
Will Francis, LMSW
Government Relations Director,
National Association of Social Workers,
Cossy Hough, LCSW
Clinical Assistant Professor, The University of Texas at Austin,
School of Social Work
Anna Stelter, LMSW, MPH
Health Policy Analyst
Texas Health Institute
Alison Mohr Boleware, MSSW
Mental Health Policy,