Prescription drugs, Medicaid, and premium costs may each be affected
Many lawmakers are hoping to have the Affordable Care Act (ACA) repealed and replaced by spring. Though they have not yet agreed on exactly how to do it, several have made proposals that could hurt or even eliminate certain parts of the law that have helped older adults.
Here are some examples of provisions that may be affected:
Medicare's prescription drug benefit was expanded by the ACA. Before the law was passed, people on Medicare had to deal with a gap in their insurance coverage known as the "doughnut hole," the point when Medicare would stop paying part of the costs of drugs and patients would have to buy them at full price. Only when the patient's out-of-pocket costs reached a so-called "catastrophic" level would Medicare begin paying most of the costs again.
The Kaiser Family Foundation conducted a study in 2011 that found that when patients had to pay full price, they would skip taking some of the medications they had been prescribed, which could result in sicker patients. Sicker patients would lead to higher costs for Medicare.
The ACA has gradually been closing the doughnut hole. The Center for Medicare and Medicaid Services says that patients have saved more than $23.5 billion in prescription drug costs since the law was passed. It is not known if this program would continue in the plan that will replace the ACA.
Many people think of Medicaid as the program that provides the poor with healthcare. However, Medicaid also pays for long-term care for many older adults, including most nursing home residents.
One idea contained in some of the proposed ACA replacement plans is to turn Medicaid into a block grant for states instead of a guaranteed benefit. The federal government would grant the states a fixed amount of money, and the states could then decide how to spend it.
This idea is popular with many conservatives. They argue that states know what they need better than the federal government does, and a block grant would give the states flexibility in meeting their needs.
However, critics are afraid that this idea might eliminate several protections currently provided under federal law to vulnerable older adults. They are also concerned about what could happen in an economic downturn, when the demand for Medicaid goes up but the amount of federal money that is allocated for it stays the same. Would states have to choose, for instance, between getting rid of services for poor children and eliminating programs for the frail elderly?
Limiting Insurance Premium Costs for Older Adults
Before the Affordable Care Act was passed, it was legal for insurance companies to charge 50- and 60-year-olds much more than they would charge someone younger for the same policy. Though this is still legal, the ACA placed a limit on this practice; now, insurers can charge older adults only three times as much as younger people. The proposed replacement plans so far either set a higher limit—five or six times higher—or have no limits at all.
According to a study sponsored by the Rand Corporation and the Commonwealth Fund, if older adults were charged five times more for insurance than younger people, roughly 400,000 would not be able to afford health insurance any longer.