Medicare Watch

ACA Repeal Increases Costs, Hurts Beneficiaries

Repealing the Affordable Care Act (ACA), which some policymakers, including presidential candidate Mitt Romney, have proposed, would increase Medicare spending, speed the insolvency of the Part A Hospital Insurance (HI) Trust Fund and increase Medicare beneficiaries’ out-of-pocket costs, according to a new report from the Kaiser Family Foundation (KFF). Other effects of repeal include the elimination of free preventive services and the re-opening of the prescription drug coverage gap, or doughnut hole, for Medicare beneficiaries.

The Congressional Budget Office (CBO) recently estimated that the ACA’s improvements to Medicare, including measures to control Medicare spending growth, increased benefits for people with Medicare, delivery system reforms and new sources of revenues for the program, will reduce Medicare spending by $716 billion over ten years beginning in 2013. If the ACA were repealed, these savings would be lost. In addition, because the law strengthens Medicare’s financial outlook by, for example, extending the lifespan of the Part A HI Trust Fund, its repeal would cause the Fund to expire in 2016—eight years earlier than projected under the ACA. The law achieves savings through its efforts to attack waste, fraud and abuse in the Medicare program and promote increased efficiency and quality of care and coverage—all of which strengthen Medicare without harming beneficiaries.

Most importantly, repeal of the ACA would increase out-of-pocket costs for older adults and people with disabilities, half of whom live on yearly incomes of $22,000 or less and are in no position to spend more on their health care. If the law were repealed, Part A deductibles and copayments, and Part B premiums, would rise due to increased Medicare spending. Prescription drug costs would also increase for people who fall into the coverage gap. As a result of the ACA, nearly 5.4 million Medicare beneficiaries have saved over $4.1 billion on their medications since the law was enacted.

Read the KFF report, “Repealing the Affordable Care Act: Implications for Medicare Spending and Beneficiaries.”

Beneficiaries Can Expect Stable Medicare Advantage Landscape

This week, the Department of Health and Human Services announced that the Medicare Advantage (MA) landscape is expected to remain stable in 2013, with the average monthly premium for Medicare private health plans staying steady. Implementation of the Affordable Care Act (ACA) continues to strengthen the MA and Part D prescription drug programs for beneficiaries; since the law’s passage, average MA premiums have decreased, while benefits have improved. Contrary to predictions that the ACA would negatively impact Medicare beneficiaries’ access to private health plans, enrollment in the MA program has increased, as the Centers for Medicare & Medicaid Services (CMS) has used authority granted to it by the ACA to protect beneficiaries from increased costs and benefit cuts. Keeping out-of-pocket expenses constant for people with Medicare—half of whom live on annual incomes of $22,000 or less, and who, on average, already spend 15 percent of their incomes on health care costs—ensures they can maintain their health and drug coverage and afford necessary care.

In addition, thanks to the ACA, the prescription drug coverage gap, or doughnut hole, will continue to close in 2013. Next year, Medicare beneficiaries who fall into the coverage gap will receive a 53 percent discount on their brand name drugs and a 21 percent discount on generics. As Fall Open Enrollment approaches, Medicare beneficiaries should consider the costs and benefits of their current coverage. During Fall Open Enrollment, which begins on October 15 and ends on December 7, people with Medicare have the opportunity to make changes to their coverage.

Read CMS’ press release.

Read the Medicare Rights Center’s press release about the MA and Part D landscape.

Medicare Reminder

If you are enrolled in Original Medicare, you can get coverage of emergency room services anywhere in the United States. If you receive outpatient services, you or your supplemental insurance will be responsible for the Part B coinsurance. If you are admitted to the hospital, you must pay the Part A deductible and coinsurances.

If you are a member of a Medicare private health plan, also known as a Medicare Advantage plan, you have a right to receive emergency care anywhere in the United States regardless of whether the hospital or provider is in your plan’s network. You do not need a referral from your primary care doctor. Even if you receive emergency department services from an out-of-network provider, you cannot be billed more than the lesser of $50 or the in-network cost for emergency services. Your plan must also cover all medically necessary follow-up care related to the medical emergency if delaying the care would endanger your health. If your plan does not pay for your emergency care, you have the right to appeal.

Learn more about Medicare coverage of emergency care at www.medicareinteractive.org, or call our helpline at 800-333-4114.

Spotlight

Medicare Rights Center President Joe Baker was quoted this week in a New York Times article that examines how proposals to convert Medicare into a premium support program would affect people with Medicare. These models, including the one proposed by presidential candidate Mitt Romney, would, as Mr. Baker states, “end Medicare as we know it,” replacing Medicare’s guaranteed set of benefits with a fixed amount of money that beneficiaries could use to purchase health insurance. This capped voucher would likely fail to keep pace with rising health care costs overall. As a result, under such premium support proposals, the federal government would lower its costs only by shifting expenses to older adults and people with disabilities, leaving beneficiaries at increased risk for problems obtaining and affording needed care.

Read The New York Times article, “Grappling with Details of Medicare Proposals.”