As Republicans in Congress move forward with plans to repeal, replace — or maybe just “repair” the Affordable Care Act, there’s a tremendous amount at stake — not just for the 20 million individuals who could lose health insurance, but also for 57 million Medicare beneficiaries. But, Democratic party leaders vow to fight any changes that will affect millions older Americans who rely on this program.
During her keynote address at the Academy Health Policy Conference in Washington, DC, on January 30, House minority leader Nancy Pelosi of California reminded the audience that the ACA has helped to extend the solvency of Medicare. “We took savings and used it to prolong Medicare’s solvency and added benefits, like free checkups and the rest and reduced the cost of Rx drugs by moving to close the donut hole,” she said.
House Speaker Paul Ryan’s budget, however, would take that same $800 B in Medicare and use it to give a tax break to the wealthiest people in America. “They want to voucherize Medicare, that’s their budget, they want to block grant Medicaid, which would be very harmful,” Pelosi said.
She also pointed out that half of all nursing home residents rely on Medicaid, the social safety-net for those with low income. “These are middle class seniors who have paid down their assets. What would their families do if Medicaid was not helping to cover them in nursing homes.?”
Republicans have long supported privatizing Medicare, primarily through a voucher system. Economist Paul Krugman wrote about the pitfalls of this approach back in 2012. Despite what many see as a disaster for the middle class, the approach has long been supported by Speaker Ryan. Contrary to analyses by the Congressional Budget Office, Ryan claims Medicare is going broke and Obamacare is to blame. HHS Secretary-designee Tom Price confirmed that major changes to Medicare are likely on the horizon.
However, according to the Kaiser Family Foundation, Medicare is not “broke.” Part A, the part that pays for hospitalization, will remain solvent through 2028. Without any changes to funding, it will then cover 87 percent of Part A costs through payroll taxes, but it’s not going bankrupt or disappearing any time soon.
What’s really affecting the program is the aging of the population and a need to cover more people. As KFF points out, “repealing the ACA in its entirely would add $802 billion to Medicare spending over 10 years.” Higher spending will result from elimination of provisions which lowered payments to providers and Medicare Advantage plans. That will likely mean higher premiums for beneficiaries, higher deductibles, and greater cost-sharing. It would also speed up Medicare’s projected insolvency date.
Senate minority leader Charles Schumer, (D-NY) tried to reassure anxious constituents and rally them to action in a “town hall” phone call with AARP-NY members last week. He said that Medicare was a promise made for future generations, and vowed that he “will do everything I can as Senate minority leader to ensure Medicare remains in place.”
Schumer cautioned listeners that apathy is the enemy. “We’re in more danger than we’ve been in for a long time.” He warned that privatization could lead to the end of Medicare as we’ve known it. That means seniors will be at the mercy of health providers, hospitals, insurance companies and drug companies. ACA provisions save every senior $2,100 in prescription drug costs, by helping to close the donut hole, according to Schumer. “If repealed, millions of seniors would pay a lot more for prescription drugs.”
It’s not just Medicare changes that older adults need to be concerned about. Schumer echoed Pelosi’s warning that Medicaid changes will create chaos for those who rely on the program live in nursing homes or assisted living. That’s because block grants—lump sum payments to states regardless of number of people enrolled—coupled with an increasingly older population, will reduce total available funds to pay for long term care. That will likely put older adults and their families on the hook to make up additional costs, or they might find themselves in a position of being unable to find appropriate and affordable long term services.
So who really benefits from ACA repeal and ensuing changes to Medicare? According to the non-partisan Center on Budget and Policy Priorities, the highest income households will see the biggest tax breaks. Top earners could reap $2.8 billion in tax cuts while about 7 million low- and moderate-income families will lose their credits and subsidies — averaging $4,800 each this year.
It’s not yet clear what repeal, replace or repair will ultimately look like. House Speaker Paul Ryan’s plan for revamping Medicare ironically looks a lot like Obamacare, reported NPR. At least a few Republicans are acutely aware of the potential volatility of tampering with the program, writes Bruce Jaspin in Forbes. Several GOP Senators who introduced their own alternatives to the Affordable Care Act don’t touch Medicare’s popular reforms.
Candidate Donald Trump promised not to touch Medicare, President Trump is now drawn into the ideological battle. The question is, will he keep that promise or will he go along with an aggressive GOP agenda that can only hurt vulnerable older adults?
You can hear an excerpt from Leader Pelosi’s remarks here: