Three Ways An Obamacare Repeal Would Affect Medicare

Three Ways An Obamacare Repeal Would Affect Medicare

The new President and Congress are working to repeal the 2010 Affordable Care Act (ACA) — more commonly known as Obamacare.  The healthcare law included many provisions that affect Medicare and the 57 million retired and disabled Americans who rely on Medicare for their health coverage.

A recent issue brief from the non-partisan Kaiser Family Foundation reviewed the implications for both Medicare and beneficiaries, finding that a full repeal of the 2010 law would lead to increased Medicare costs, faster program insolvency, and higher costs for beneficiaries.  Here are three key effects that a repeal of the ACA would have:

  • Higher spending on Medicare Part A and Part B, leading to higher premiums, deductibles and copayments for beneficiaries.  The Congressional Budget Office estimates that the ACA reduced Medicare spending by $350 billion over 10 years just by changing how providers are paid.  Repealing those provisions would mean that spending on hospitals, doctors and outpatient services would increase and thus increase the portion that beneficiaries pay in premiums and out-of-pocket costs.  A repeal of provisions cutting payments to Medicare Advantage plans would also increase Part B premiums and deductibles paid by all beneficiaries because the average program spending per beneficiary would rise.  The Part B premium is set to cover 25% of all Part B spending (including for Medicare Advantage) and the Part B deductible rises in tandem with premiums.
  • Loss of key benefits. Under a complete repeal, beneficiaries would lose some new Medicare benefits, like screenings for breast and colorectal cancer, diabetes and cardiovascular disease, as well as cost sharing in the Part D doughnut hole when people hit the gap in coverage.  The loss of Part D doughnut hole benefits would leave people paying 100% of drug costs until the individual has spent a total of $4,950 out of pocket and the catastrophic level of coverage is reached.
  • Medicare would become insolvent more quickly. The ACA established new tax revenues for Medicare that include fees that manufacturers and importers of brand drugs pay, which go to pay Part B benefits.  A repeal would also end a 0.9 percentage point increase in the Medicare payroll tax that higher income workers pay (affecting working people with incomes more than $200,000 for individuals/and $250,000 for couples.)  Without those revenues, Medicare would become insolvent much sooner than currently estimated.

TSCL is strongly opposed to changes that cut Medicare benefits and shift more costs to older or disabled Americans.  Please let us know what you think of a repeal that affects your Medicare benefits.  Take TSCL’s 2017 Senior Survey online at seniorsleague.org/2017survey.

 

Sources:  “What Are the Implications of Repealing the Affordable Care Act For Medicare Spending and Beneficiaries?” Kaiser Family Foundation, December 2016.

2017 Standard Benefit Model Plan Parameters,” Centers for Medicare and Medicaid Services, April 2016.

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