How new healthcare legislation could affect seniors
A recent report by the GAO (Government Accountability Office) stated that seniors who are sicker are more likely to leave Medicare Advantage plans, as patients cited difficulty with access to preferred doctors and hospitals. In fact, after reviewing 126 Medicare Advantage plans, 35 of them had disproportionately high numbers of sicker people dropping out. With more difficult and expensive access to healthcare for seniors, how can new healthcare legislation affect you?
After President Trump’s election and promise to repeal the ACA, the new legislation being proposed to replace the ACA is called the Better Care Reconciliation Act (BCRA). which is working its way through the Senate and causing growing concern over the impact it could have on seniors.
Medicare and Medicaid
The BCRA would leave much of the Medicare changes brought about by the ACA intact including:
- Benefit improvements
- Reductions to payments to health care providers and Medicare Advantage plans (Medicare Advantage Plans currently serve more than 19 million patients)
- The Independent Payment Advisory Board
- The Center for Medicare and Medicaid Innovation
Medicare, the federal health insurance program for people over 65, will likely run out of funding sooner. The BRCA would impose a 0.9% payroll tax on incomes over $200,000 for single individuals and $250,000 for couples. This would eliminate the Medicare Trust Fund two years earlier than previously proposed and put the financing of future Medicare benefits at greater risk for current and future generations.
Medicaid, a joint federal and state program that helps pay healthcare costs for individuals or families with low income, will be cut by $772 billion by 2026. Medicaid provides valuable funds for roughly 7 million older adults who depend on it primarily for long-term services and support that is not covered by Medicare. The BRCA would limit federal funding for states below the actual cost of care.
There is a concern with limiting Medicaid spending as costs could rise rapidly. Proposed cuts made to Medicaid are estimated to leave roughly 15 million people without Medicaid funding by 2026. On top of many people potentially losing their coverage, those who remain on Medicare could expect to see a significant rise in healthcare premiums.
Better Care Reconciliation Act Goals
A major goal of the BCRA is to reduce healthcare spending that is contributing to the overall federal debt. A few key goals of the BCRA are to:
- Help stabilize collapsing insurance markets by creating short-term stabilization fund that will provide $15 billion in 2018 and $10 billion in 2019 as well as continue to provide federal assistance to low-income Americans through 2019
- End government mandates created by the ACA
- Improve affordability of health insurance by expanding tax-free Health Saving Accounts, repealing ACA taxes, and implementing tax credits and empowering states to make changes in what markets are available to residents
- Preserve access to care for Americans with pre-existing conditions and allowing children to stay on their parents’ insurance through age 26
- Strengthening Medicaid by giving states more flexibility while providing services to those who rely on the program
The Bigger Picture
If the BCRA does come into effect, it would drastically change healthcare coverage for many individuals, especially people covered with Medicaid. If healthcare costs are cut, it will likely mean cutting funding to Medicaid, which means that senior citizens will be affected the most. Time will tell us what parts of the ACA will stay, and what parts will go.