Like it or not, The Affordable Care Act (a/k/a “ObamaCare”) is here and will cause significant changes to our health care system. Many of these changes will affect seniors who receive health insurance through Medicare. While the full impact of the changes will not be known for some time, here are just a few of the changes in this massive law and their anticipated impact:
1. Closure of the “donut hole”. Under the Medicare prescription drug program (Medicare Part D), Congress created a gap in coverage (the so-called “donut hole”) in which seniors are required to pay 100% drug costs up to a specified amount. Under ObamaCare, this donut hole will eventually be eliminated by 2020. Unfortunately, some experts project that the closing of this donut hole will result in higher premiums for drug coverage.
2. Reduction of Medicare Advantage payments. Beginning in 2013, ObamaCare requires a reduction in the government’s payment to these plans. The result of these reduced payments will undoubtedly impact the nearly one in four seniors who are enrolled in a Medicare Advantage plan. These could include less Medicare Advantage plan choices, increased out of pocket costs, reduced benefits or any combination of these.
3. Expanded Coverage for Preventive Care. ObamaCare includes coverage for preventive care and wellness visits with no out of pocket costs to seniors. While some experts believe this will ultimately reduce medical costs by helping to prevent illnesses before they become serious and costly to treat, many experts have serious doubts about such savings.
4. Higher taxes. Many seniors will pay higher taxes under ObamaCare. Beginning in 2013, a 3.8% tax is imposed on higher earning seniors on their unearned or investment income. Also, beginning in 2016, the current tax deduction of 7.5% for medical expenses is raised for seniors to 10%.
5. Reduction in payment medical providers. To offset the increased spending under ObamaCare, payments to medical providers like hospitals and nursing homes are reduced. This is expected to cause some of the providers to become unprofitable which could decrease access to care for those who rely primarily on Medicare.
Many seniors are concerned about ObamaCare and how it will impact them. Those seniors who are aware of how it may affect them will be best able to address its impact upon their lives.