How will the ACA (Obamacare) Affect Senior Citizens?
We have had numerous questions submitted to us asking about the impact of the ACA (aka Obamacare) on seniors. The Affordable Care Act (ACA), better known as Obamacare, makes major changes to the way senior citizens receive health care.
Over the last month, we have been compiling the research and key points from both sides of the political landscape to help you better understand the drastically differing viewpoints from Republicans and Democrats.
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Some of the Key Points from the Infographic
Medicare is a system of federally administered health care available to people age 65 and older. It is divided into parts A through D which covers various types of health care. On average, Medicare covers about 48% of health care costs for enrollees. The additional costs are paid by private insurance such as Medicare Supplemental Insurance or private funds.
Medicare and Health Insurance Marketplace (ie. HealthCare.gov)
Is not for: Medicare recipients who already have Medicare Part A with no premiums and/or Medicare Part B.
It might be for: Those who must buy Medicare Part A because they have not earned enough working credits.
Republicans: Important Components of Medicare Funding are Cut.
Obamacare will cut Medicare funding by $716 billion over the 2013 to 2022 period. The projected 2013 budget deficit is $614 billion. It primarily cuts hospital services, payment rates in Medicare Advantage, and DSH payments.
Democrats: Costs are Reduced by Reducing Fraud and Utilizing Preventive Services.
Medicare Advantage plans must maintain a medical loss ratio of 85% by 2013. This means that plans can use no more than 15% of their funds for administrative costs and profits. Current overhead for healthcare is estimated at 25%-30% in America, though other countries typically this cost in the range of 5%-10%. In 2012, over 34 million Medicare beneficieries took advantage of free preventive services available as part of ACA.
Impact on Individuals
Republicans: More Taxes for High Income Earners.
The Medicare tax rate will increase from 1.45% to 2.25% for individuals who earn over $200,000 and couples filing jointly who earned over $250,000
Democrats: Less Costs for Low Income Individuals.
People with an income at or below 150% of the federal poverty level ($11,490 for singles, $23,550 for a family of 4) will receive a drug subsidy. Free preventive services, lower drug costs, and other assistance will save Medicare beneficiaries an average of $4,200 over the 2010-2020 decade.
Republicans: Higher Drug Costs for Certain Income Brackets.
Individuals in certain income brackets will have to pay a higher prescription drug coverage premium for Medicare Part D.
Democrats: Closure of the "Donut Hole" to Reduce Drug Costs.
Seniors who fall into the "donut hole" created by the Medicare Modernization Act of 20013 have been responsible for 100% of their drug costs up to a set amount. Obamacare has provided a $250 rebate to these individuals as well as a 50% discount on brand name prescriptions. By 2020, the donut hole will close.
Republicans: Fewer Plans to Choose From and Less Providers Accepting Medicare Payments.
Seniors will have fewer Medicare plans to choose from through Medicare Advantage. Also, the rate of growth in Medicare payments to healthcare providers will be reduced and could make providers less inclined to take Medicare patients.
Democrats: Better Quality Care with a Reduction of Growth in Medicare Spending.
The Center for Medicare and Medicaid Innovation will test new ways of delivering care. Accountable Care Organizations, bundled payments, and medical homes will provide higher-quality care for beneficiaries. Physicians and certain services will receive bonus payments.
Republicans: Shortage of Doctors is Not Addressed.
Obamacare is expected to increase patient demand for medical services. The Association of American Medical Colleges (AAMC) forecasts that in 15 years, the United States will face a deficit of up to 159,300 physicians.
Democrats: Offers Provisions that Expand the Primary Care System while Still Reducing Costs.
Increases the primay workforce by training more medical staff and offering more money for scholarships and loans.