Obamacare Repeal Could Threaten Provisions That Help Older Adults

Jan 28, 2017
Originally published on January 28, 2017 1:26 pm

Republican lawmakers meeting in Philadelphia this week say they want their replacement of Obamacare to be done by spring. There is no consensus on a plan yet, but several Republicans in Congress have already circulated proposals that could reduce or eliminate features of the federal health law that have benefited older Americans.

Here are some examples:

Prescription drugs

The Affordable Care Act expanded Medicare's prescription drug benefit. Before the ACA, people on Medicare had to deal with a gap in that insurance coverage that came to be known as the doughnut hole. That's the point at which Medicare would stop paying part of the cost of drugs, and beneficiaries would have to buy them at full price. Then, when the patient's out-of-pocket costs reached a level deemed to be "catastrophic," Medicare would start paying most of the cost of the drugs again.

A 2011 study from the Kaiser Family Foundation showed that when patients had to pay full price, they'd skip some of their prescribed medications — and that could, potentially, result in sicker patients and higher costs for Medicare.

Gradually, the ACA has been closing the doughnut hole coverage gap. According to the Center for Medicare and Medicaid Services, beneficiaries have saved more than $23.5 billion in prescription drug costs. It's unknown if this program would be maintained in a Republican plan that replaces the ACA.

Medicaid

Medicaid is commonly thought of as the program that provides health care for the poor. But it also pays for long-term care for a lot of older people, including the majority of nursing home residents.

One idea in some of the Republican proposals for replacing the Affordable Care Act is to turn Medicaid from a guaranteed benefit into a block grant to states. States would get a fixed amount of money from the federal government, and could make their own decisions on how to spend it.

That's an idea that's been popular for some time among conservatives such as House Speaker Paul Ryan. They argue that states know their needs better than Washington does, and the block grant would give states flexibility in meeting those needs.

Critics fear this could do away with many protections that federal law currently provides for vulnerable older people. They also worry about what might happen in an economic downturn, when the demand for Medicaid goes up, but the amount of federal money allocated for it stays the same. For example, would states have to choose between cutting services for poor children versus cutting programs for the frail elderly?

Limiting the cost of insurance premiums for older adults

Before the Affordable Care Act, insurance companies could charge people in their 50s and 60s many times more than they'd charge a younger person for the same policy. The affordable care act put a limit on that. Now Insurance companies can only charge older people three times as much as they charge people a few decades younger. But the various GOP replacement proposals either set higher limits — five or six times higher — or they don't have any limits at all.

A study sponsored by the Rand Corporation and the Commonwealth Fund found that if older Americans were charged five times more for insurance than younger people, about 400,000 would no longer be able to afford to buy health insurance.

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SCOTT SIMON, HOST:

Congressional Republicans are trying to figure out when to repeal and how to replace the Affordable Care Act. Whatever happens, there's a lot at stake for older Americans. NPR's Ina Jaffe covers aging. She joins us for our regular conversation we call 1 in 5, which refers to the 1 in 5 Americans who, by the year 2030, will be 65 years of age or older. Ina, thanks so much for being back with us.

INA JAFFE, BYLINE: It's good to be back with you, Scott.

SIMON: Now, don't Americans over 65 have Medicare?

JAFFE: Well, they do. But what people don't always realize about the Affordable Care Act is it's not just a discrete program in and of itself. It changed other government programs, too, and that includes Medicare.

SIMON: What was the biggest change for Medicare?

JAFFE: Well, the one that's gotten the most attention is the change to prescription drug coverage. You may have heard about something called the doughnut hole. That's where Medicare would get you a discount on prescriptions but only up to a point. After that, you had to pay full price for drugs until you shelled out around 1,300 bucks. Then Medicaid would help you out again.

Now, some people never really reached that point because when they had to pay full price, they just started skipping some of their prescription meds. So the Affordable Care Act has been phasing out this gap. It saved people on Medicare more than $23 billion. But this program could go away with the repeal of the law.

SIMON: That could go away, and we should say, once again, that we don't know yet what any replacement will look like. What have you heard among the ideas being proposed that might affect older Americans?

JAFFE: Well, a few members of Congress, Republicans, have circulated their own proposals for replacing the Affordable Care Act. And one thing that comes up in some of them, including in House Speaker Paul Ryan's plan, is a major change to Medicaid. Now, that's known as the program that provides health care for the poor. But it's also the program that pays for long-term care for a lot of older people. In fact, Medicaid pays the bills for most nursing home residents.

SIMON: That could be jeopardized?

JAFFE: Well, certainly the people putting forth these plans don't think it would be. What they want to do is change Medicaid from a guaranteed benefit to a block grant to states. So a state would get a fixed amount of money from the federal government and decide for itself how to spend it. The idea is that states know their needs better than the feds, and this would give them flexibility.

What critics of this idea worry about is, what happens in an economic downturn when demand on Medicaid goes up? They say states could be left with a sort of Sophie's choice. Do you cut back on services for poor children or for the frail elderly?

SIMON: I know we've talked about Medicare and Medicaid. Are there proposed changes that would affect older Americans who might buy their own health care coverage?

JAFFE: Yeah. In fact, there's a little-known feature of the law that helps people in their 50s and early 60s, people who aren't yet eligible for Medicare. Insurance companies used to be able to charge them many times more than they charge a younger person for the same policy. The Affordable Care Act put a limit on that.

Now insurance companies can only charge them three times as much. But the various replacement proposals that are out there either set the limits higher at five or six times more or they don't have any limit. And researchers say that could result in around 400,000 older adults being unable to afford to buy health insurance anymore.

SIMON: NPR's Ina Jaffe, thanks so much.

JAFFE: You're welcome.

(SOUNDBITE OF JULIAN LAGE AND CHRIS ELDRIDGE'S "BUTTER AND EGGS")

SIMON: This is NPR News. Transcript provided by NPR, Copyright NPR.