ACA is Here to Stay – Is That Good for Seniors?

Photo Source: Irish Times

Q. I heard that the Affordable Care Act (ACA) is here to stay, as of yesterday when the Supreme Court ruled to save the health care law. Is the ruling good for seniors? Also, can you clarify whether seniors on Medicare are or are not affected by the ACA?

A. Yesterday, in a moment of high drama, Chief Justice John Roberts  announced that he would issue the majority opinion in the case involving the ACA, and it became clear that the ACA would be here to stay. The decision has a major impact on the millions of Americans who are receiving financial assistance from the federal government to buy health insurance.

The ACA has given states the option to build their own healthcare marketplaces or to use one operated by the federal government. In all, 34 states decided to rely on the federal “exchange.” In doing so, more than 6 million low-income to moderate-income Americans are now receiving subsidies of on average $260 a month through the federal exchange. In all, at least 10.2 million Americans have signed up for health coverage through the ACA.

What Was the Lawsuit About?

In the lawsuit challenging the law, critics insisted the federal government is not allowed to subsidize insurance in states that rejected their own exchange for the federal system. Critics based their argument on a single phrase in the ACA that refers only to participants enrolled “through an Exchange established by the State.”

Last week, Health and Human Services Secretary Sylvia Burwell, said the administration was “in a very strong position in the case,” based on the wording of the law and “the intention of the law.” She warned an adverse ruling would likely mean millions of Americans would lose subsidies and be unable to afford health insurance coverage. She also indicated an adverse ruling would mean governors in states without exchanges would have to decide whether to create them, and Congress would face a decision over whether to intervene through legislation.

What Does the Ruling Mean for Seniors?

The ruling is a huge victory for President Barack Obama, who nearly saw four words in the Affordable Care Act throw his signature achievement into chaos. And, with the ruling, the ACA is really here to stay.  In fact, it will take an Act of Congress — and a President willing to sign it — to thwart the heart of the ACA.

The ruling is also good for seniors, in that it eliminates pre-existing condition exclusions, keeps children on parents’ policies to age 26, eliminates gender discrimination in pricing, and provides significantly more preventive and screening tests without cost.

The ACA and Medicare

You asked if people with Medicare are affected by the ACA. According to the Centers for Medicare & Medicaid Services (CMS), below are some examples of how the ACA positively affects seniors on Medicare:

Preventative Services: The ACA helps tear down a significant barrier for some seniors to staying healthy and helps their care providers prevent, identify and treat problems early.

  • More than 25.4 million senior citizens and others covered by Medicare received at least one preventive service at no cost to them during the first eleven months of 2013, because of the Affordable Care Act.
  • Before the Affordable Care Act, Medicare recipients had to pay part of the cost for many preventive health services.
  • These out-of-pocket costs made it difficult for many seniors to get the important preventive care they needed.

Annual Wellness Visits: In the first eleven months of 2013, more than 3.5 million seniors and other beneficiaries with Medicare took advantage of the Annual Wellness Visit established by the ACA.

Financial Viability of Medicare: Provisions of the ACA are proving to be highly beneficial to the future of the Medicare program.

  • ACA provisions have had a substantial effect on reducing the growth rate of Medicare spending. Growth in Medicare spending per beneficiary hit historic lows during the 2010-2012 period, and this trend has continued into 2013 (Source: Department of Health and Human Services).
  • Medicare spending per beneficiary will grow at approximately the rate of growth of the economy for the next decade, breaking a decades-old pattern of spending growth that outstripped U.S. economic growth. (source: projections by both the Office of the Actuary at CMS and the Congressional Budget Office)

Accountable Care Organizations (ACOs): Doctors, hospitals and health care providers establish ACOs to work together to provide better health care through closely coordinated services to their Medicare patients, while working to slow the growth of health care cost.

  • The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.
  • According to CMS, when an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.
  • There are now more than 360 ACOs working with Medicare to provide higher-quality coordinated care to 5.3 million seniors and other beneficiaries, while reducing the cost of health care (source: HHS)

Prescription Drug Coverage Savings: The ACA saved seniors $8.9 billion on their prescription drugs since the law’s enactment (source: CMS).

  • Seniors with Medicare Part D (prescription drug coverage) will see a $15 drop in their deductible, from $325 in 2013 to $310 last year.
  • The “donut hole” (coverage gap for seniors with large prescription drug needs), has been getting smaller each year, since 2011, and due to ACA provisions, it will continue to get smaller. In fact, last year, the donut hole was $158.75 smaller than it was in the previous year, another step closer to the plan to eliminate this coverage gap by 2020. For more details, read our blog post about the donut hole.

As you can see, actions resulting from the ACA (also called Obamacare) are certainly having a major positive effect on seniors on Medicare today, and according to the CMS, will continue to do so in the future.

As you are taking advantage of the benefits of the ACA and planning for your next wellness visit, it is also a good idea to plan for your future and for your loved ones. If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact Farr Law Firm, P.C. as soon as possible. To make an appointment for a consultation, please contact us:

Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-143
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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