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What Health Reform Repeal Means for Seniors and the Medicare Program

Beneficiaries Can Expect Greater Costs and Greater Uncertainty About the Program’s Future

The Affordable Care Act, the nation’s new health care reform law, strengthened the Medicare program. It promises to improve care for America’s seniors and other individuals with Medicare coverage. This week, however, the House of Representatives is expected to approve legislation that will repeal this new law and the improvements it makes in Medicare. Repealing the Affordable Care Act would eliminate the new Medicare benefits and patient protections included in the new law and place Medicare on less stable financial footing.

How the Affordable Care Act improves Medicare

Health care reform opponents spent much of last year criticizing the Affordable Care Act’s Medicare spending reductions, charging that these changes would starve the program and limit care. They generally pointed to reduced growth in provider payment formulas and a significant change in Medicare Advantage payments. These reductions, however, were reasonable within the context of previous budget bills and the systemic goals of the Affordable Care Act, which seeks to create a more affordable health care system that works for all Americans by improving coverage, enhancing quality, and increasing efficiency. And they strengthened Medicare’s financial position. Changes in payments to Medicare Advantage plans may affect some who enroll in these private options, but overall these changes result in fairer treatment across all Medicare beneficiaries.

The debate also obscured the new law’s other improvements in the Medicare program and other services for many Medicare beneficiaries, such as improvements in long-term care coverage.

Specifically, the law:

  • Improves Medicare coverage for preventive services. The law creates new coverage for an annual wellness visit and eliminates copayments and deductibles for preventive services. These improvements will enable people with Medicare coverage to better manage their own health, and increased use of preventive services will result in program savings over time.
  • Establishes discounted drug prices for individuals who hit the so-called “doughnut hole” in the Medicare Part D benefit. Individuals enrolled in Medicare Part D who have high prescription drug needs will save up to $1,500 on their drug costs instead of paying the full cost of their medications once they hit a preset limit.
  • Improves access to primary care physicians. The law increases Medicare payments for primary care services by 10 percent.
  • Extends the solvency of the Hospital Insurance Trust Fund by an additional 12 years. This trust fund finances hospital services and other care for people with Medicare coverage. This trust fund now has sufficient assets to cover the cost of care through 2029.
  • Fosters changes in Medicare provider payment arrangements designed to improve quality and coordination of care. These changes include a new Center for Medicare and Medicaid Innovation, which will test new provider payment models designed to improve efficiency and quality. These efforts should help to further hold down the costs of health care for Medicare beneficiaries over time.
  • Creates a new national, voluntary long-term care insurance program and strengthens Medicaid-financed home- and community-based services for low-income people with long-term care needs. These improvements include enhanced federal financing for attendant supports, extending federal and state investment in home- and community-based services and nursing home diversion programs, and establishing medical homes for chronically ill Medicaid beneficiaries.

What will repeal mean for people with Medicare coverage?

Quite simply, repealing the Affordable Care Act will mean that people with Medicare will lose the new benefits and protections included in the new law. Those with high prescription drug costs will continue to struggle to pay for their medications once they hit the Part D doughnut hole. Enrollees’ access to primary care doctors may erode as their payment rates continue to lag well behind those of specialists. And Medicare beneficiaries will continue to be responsible for Medicare deductibles and copayments when they seek a flu shot, a mammogram, or other preventive services.

Meanwhile, Medicare spending will continue its pre-reform trajectory. Congress consequently will need to consider severe changes to the Medicare program—changes likely to threaten beneficiaries’ access to affordable care—in the face of this return to more rapid spending growth and without the extra protections that the new legislation has created.

Finally, the Medicare program will lose its newly created ability to test, replicate, and spread innovations in health care delivery and health care payment that will improve quality of care while saving program dollars. Medicare beneficiaries with chronic illnesses and others who need significant care will therefore continue to experience disjointed, poorly coordinated care. They will remain at risk for duplicative care, repeat hospitalizations, and unnecessary services while navigating the health care system on their own.

In short, repeal of the new health care law promises Medicare beneficiaries greater costs—for prescription drugs, preventive services, and lower quality care—as well as greater uncertainty about the program’s future.

Marilyn Moon is senior vice president and director of the health program at the American Institutes for Research, or AIR.

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