What Seniors and Caregivers Should Know about Possible Affordable Care Act Changes

The Affordable Care Act (ACA) has a number of healthcare provisions that affect seniors, including parts of Medicare, so the upcoming likely repeal of the ACA may have significant impact on seniors and caregivers. Here’s what you need to know about the repeal and how it may affect older adults.

Status of the ACA repeal

President Donald Trump and Republicans in Congress have made it clear that repealing the ACA, also known as Obamacare, is a top priority. But it remains to be seen whether the act will be repealed entirely and replaced with a new law, or if portions of the law will be rolled back while others remain.

“I think that in general, there’s really been a lack of recognition that the repeal of the ACA can have a significant impact on seniors, especially people on Medicare,” says Leslie Fried, senior director of the Center for Benefits Access at the National Council on Aging.

Republicans have said they want a replacement healthcare plan to expand people’s access to healthcare insurance, rather than focusing on a goal of having all Americans insured, as the ACA aimed to do. Leading congressional Republicans met in Philadelphia recently to work toward a consensus over different proposals for an ACA alternative.

Mr. Trump said recently that a replacement plan likely wouldn’t be ready until the end of this year or early 2018. Still, lawmakers have already begun taking steps that could affect insurance and Medicare costs.

Possible higher insurance premiums

In January, Congressional Republicans passed a budgetary bill that makes it easier to end portions of the ACA, such as insurance subsidies and penalties, without passing any new laws.

The budgetary bill cannot change portions of the ACA that are not tied to the budget. For example, under current law, insurance companies are limited in how much they can charge older adults. The bill also won’t affect coverage for people with preexisting conditions.

But the bill could eliminate insurance subsidies for participants in the insurance marketplace under Obamacare. This could make insurance unaffordable for many Americans and reduce the number of people who can buy it. Some experts are concerned that as people drop out of the marketplace, premiums for those who remain would rise.

“There’s a concern that the health insurance market could be thrown into turmoil if there’s a repeal without a replace,” says Steven P. Wallace, associate center director at the UCLA Center for Health Policy Research.

Budget changes could also do away with the penalties that incentivize Americans to buy insurance. If younger, healthier Americans decide to forgo buying insurance in the marketplace, premiums could rise for anyone left in the market.

Portions of the ACA that can be changed based on the budget law would most directly affect those family caregivers and older adults who participate in the insurance marketplace, including seniors who may have lost their job or retired before they were eligible for Medicare.

Possible higher Medicare spending

The ACA made a number of changes to Medicare. There are 57 million seniors and people with disabilities currently enrolled in the program, and many may not realize that some of their Medicare benefits are tied to the ACA and may be subject to change, says Fried.

First, a repeal would likely mean higher premiums, higher deductibles and a return to cost sharing. That’s because premiums and deductibles are linked to how much the government sets aside to spend on the program, and that figure is likely to rise. The Congressional Budget Office estimates that repealing the ACA would likely increase Medicare spending by $802 billion through 2025.

Preventative care options, such as screenings for breast cancer, heart disease and diabetes, may also disappear under a full repeal.

A repeal may bring back the “donut hole” -- the infamous gap in Medicare prescription drug coverage. The ACA is set to close that gap little by little each year until seniors pay no more than 25 percent of the cost of generic and brand name drugs in 2020.

“Currently, about a quarter of seniors have expenses in the donut hole,” says Wallace. “If you repeal the ACA, if you dial back extra coverage, then a sizeable group would see a hit to their pocketbook.”

An increase in out-of-pocket expenses could have serious ramifications for seniors. “When we increase the out-of-pocket costs for health care, difficult choices have to be made,” says Fried. “We may find seniors deciding not to refill prescriptions, or they might forgo health screenings because they can’t afford it—then it impacts their health and finances.”

In addition, cuts to Medicare funding through the repeal of higher Medicare taxes on wealthy individuals, for example, could have long-term effect on the solvency of the program. Funding cuts could reduce the amount of time the program’s trust fund will stay in the black.

What to expect for 2017

For those participating in the open market, 2017 insurance plans are set, and insurers are contractually obligated to follow through with those plans. However, there’s one important caveat: insurance companies agreed to 2017 contracts assuming certain market conditions.

“If those are no longer there, there is uncertainty about whether those plans will be able continue in 2017,” says Fried.

It seems unlikely that lawmakers will push through a repeal of the ACA until there is something to replace the bill. Experts recommend that seniors and caregivers write to their elected officials telling them what parts of Medicare work well for them to help ensure that those elements remain in place.

“Seniors should stay informed and let their representatives at every level know about how they are affected and what part of the health care system is important to them,” says Fried.