How will Obamacare Repeal Affect Medicare?
This article was updated on: 07/05/2018
With talk in the news about an Obamacare repeal, you may be wondering how that would affect Medicare. We don’t have a crystal ball, but let’s explore what news reports are saying about whether and how Medicare may be affected by a possible Obamacare repeal.
What is Obamacare?
Also known as the Affordable Care Act (ACA), Obamacare refers to health insurance legislation that was passed in 2010. This health-care reform legislation was designed to expand health insurance to cover more people, make health insurance more affordable, expand the Medicaid program, and lower health-care costs through various innovative methods. An Obamacare repeal might reverse the ACA, or just parts of it, depending on the extent of the repeal.
What is Medicare?
Medicare is a government health insurance program signed into law in 1965. It’s a fee-for-service program available to U.S. citizens and legal residents of at least five years in a row. It’s also available to those younger than 65 who qualify by disability. Although Obamacare isn’t the same as Medicare, an Obamacare repeal may affect Medicare, as described below.
Will there be an Obamacare repeal?
Presidential and congressional elections in 2016 brought much speculation about an Obamacare repeal. The New York Times reported that there are several steps involved in repealing Obamacare, if it happens. The federal budget passed at the end of 2017 ends the requirement (called the individual mandate) that people enroll in health insurance. According to the Washington Post, this could be an important step towards an Obamacare repeal.
How might an Obamacare repeal drive up Medicare and consumer costs?
The online publication Money states that the Affordable Care Act (Obamacare) includes about 165 provisions that affect Medicare. For example:
- Obamacare ties health-care outcomes to Medicare payments at certain facilities. It calls for incentive payments to reward hospitals for meeting certain quality standards.
- Certain preventive screenings, such as colonoscopies and mammograms, used to come with a coinsurance payment through Medicare. Under Obamacare, these and certain other screenings are generally provided through Medicare Part B at no cost.
- Obamacare has been gradually closing the prescription drug coverage gap, also known as the donut hole. Prior to the ACA, consumers had to pay 100% of the costs for prescription drugs if they reached that coverage gap by spending a certain amount on prescription drugs.
An Obamacare repeal would mean that about $802 billion in Medicare spending would have to be added in order to keep current benefits going from 2016 to 2025, Money reports. To fund this spending increase, Medicare out-of-pocket costs like premiums, deductibles, coinsurance, and copayments would likely go up, according to the Kaiser Family Foundation.
How might an Obamacare repeal help Medicare beneficiaries?
For those enrolled in Medicare Advantage plans, an Obamacare repeal might have a positive impact. Obamacare gradually reduced government payments to Medicare Advantage plans to bring costs down close to the average cost of health care, according to Kaiser Family Foundation (KFF). An Obamacare repeal might result in more benefits to Medicare Advantage plan members, or reduced costs to members.
Medicare Prescription Drug Plans might reduce their premiums or reduce other out-of-pocket costs, KFF notes. This is because under an Obamacare repeal, the plans may no longer have to lower prescription drug costs during the coverage gap.
As you can see, there may be many different ways that an Obamacare repeal may affect you as a Medicare beneficiary. Whether these changes may help you or not depends on how the budget details and legislation play out.
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