Is the Sun Setting on Medicare?
It’s one of the most popular “entitlement” programs in the United States, a guaranteed, pay-for-services, social-insurance system that benefits 16 percent of the population. Now more than a half-century old, Medicare was founded with the purpose of providing health insurance to older and disabled people.
According to the Kaiser Family Foundation, in 2015, more than 55 million Americans were covered by Medicare. Only 54 percent of elders had health insurance before Medicaid was signed into law by President Johnson in 1965. Now 98.4 percent do. But many Republican legislators are looking to privatize the program, believing, as House Speaker Paul Ryan (R-Wis) noted in a Fox News interview last year, it has “serious problems…Medicare is going broke.”
With the election of President Trump and Republicans winning majorities in both the Senate and the House, changes to Medicare seem assured. Although Trump ran on a promise not to touch Medicare, he and the Republican legislature have vowed to repeal the Affordable Care Act (ACA). Also known as Obamacare, it includes a wealth of Medicare reforms intended to improve care while cutting costs to retirees by cracking down on waste, fraud and abuse. The measures worked to some extent.
According to the board of trustees for Medicare, the solvency of the program was extended from 2017 to 2029 thanks to ACA changes to it.
What will be left of the ACA – and whether any legislation will be enacted to replace it – remains to be seen. Some 20 million Americans will lose their health insurance if Republican lawmakers do not offer a substitute plan. Medicare will be better protected than Medicaid, but there are a number of provisions in the ACA helpful to Medicare recipients that could be lost if Obamacare is dissolved, including one that ended the dreaded “donut hole.”
“One of the good things the ACA did for seniors,” explains Roberts Burns, director of the Dauphin County Area Agency on Aging, “is that it started a path toward lowering prescription-drug cost. Before the ACA, at a certain point in time depending on your income and deductible, you began paying out of pocket for prescription drugs before coverage kicked back in again. The ACA put in place a phased-in plan where each year that out-of-pocket, donut-hole cost to seniors got lower. For example, this year, it’s now at 40 percent, so a senior would pay 40 percent of the cost of their medication in the donut hole. It’s supposed to keep going down until 2020, and at that point, it would be five percent.”
The ACA also mandated that annual wellness visits would be provided free through Medicare, along with a host of preventive-care services.
“Usually, in the traditional Medicare program, people had cost-sharing with whatever service they got,” details Fran Chervenak, senior attorney with the PA Health Project, a nonprofit law firm that helps people gain access to public health care coverage. “There were always deductibles and co-pays for any covered benefit, but under the ACA, certain preventive services now had to be covered by Medicare with no cost sharing to the beneficiary. That includes things like mammograms, prostate-cancer and diabetes screenings and flu shots.”
How Medicare will fare under the Trump administration depends on whether the President is willing to stand behind his campaign promises – and up to not only lawmakers like Ryan, but also his own appointees. Ryan’s stated plans for Medicare have included a major overhaul that would convert it into a private model where beneficiaries receive federal subsidies to purchase their own insurance. Trump’s pick for budget director, South Carolina Rep. Mick Mulvaney, has supported sweeping cuts to Social Security, Medicaid and Medicare. And Georgia Rep. Tom Price, Trump’s nominee to head the Department of Health and Human Services, favors giving seniors a voucher to buy private insurance policies, which many worry wouldn’t be enough to cover the health care expenses of the elderly.
So what’s the best we can hope for in regard to Medicare and the ACA?
Burns has an answer. “Any time we pass a major law in this country, like the ACA, which is arguably one of the most significant pieces of legislation in the last 50 years, I think it’s natural to assume it’s not going to work great initially. It’s going to have to be tweaked to make it work better. So I guess what I hope is that those who hate it don’t look at it as ‘let’s gut it,’ and those who love it don’t turn a blind eye to the problems it has. It’s three years old, still relatively new, so let’s enhance those things that are working well and fix those things that aren’t.”
For information about Medicare changes and what they might mean to your health care, visit phlp.org. or dauphincounty.org/government/Human-Services/area-agency-on-aging.