Supreme Court Justice Ruth Bader Ginsburg’s death heightened the stakes in a case scheduled to appear before the court Nov. 10 that could reverse improvements to Medicare and raise out-of-pocket costs for beneficiaries. The case, California v. Texas, which was filed by 20 Republican-leaning states, challenges whether the Affordable Care Act can exist without the individual mandate to buy health insurance. A Republican-controlled Congress removed the financial penalty for those without insurance in 2017.
“If the ACA was repealed or rescinded in full, it would be devastating for Medicare,” says David Lipschutz, associate director of the Center for Medicare Advocacy, which along with AARP and Justice in Aging filed an amicus brief supporting California and 16 other Democratic-leaning states defending the health care law. Many of the law’s provisions that strengthen the program’s fiscal solvency also strengthen consumer protections for beneficiaries, he says.
“The ACA’s changes are so ingrained in the program that people don’t remember what Medicare was like before the law,” adds Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center. Without the ACA, she says, the doughnut hole for prescription drug coverage, which closed in 2020, reopens, and “the expansion of preventive care services goes away.” The effects encompass both traditional Medicare and Medicare Advantage plans, eliminating ACA improvements that helped drive costs down for the program and beneficiaries. Here’s what happens to Medicare if the court invalidates the law.
The Medicare Doughnut Hole Returns
Since 2011 the ACA has been steadily closing the prescription drug coverage gap, known as the doughnut hole, in Medicare Part D by requiring drug manufacturers and insurers to pick up more of the cost. The hole was finally closed this year with seniors paying 25% of the cost for both generic and brand-name medications and manufacturers picking up 70% of the tab; insurers kick in the remaining 5%. Before the ACA, seniors paid 100% of prescription drug expenses while in the doughnut hole.
Sponsored Content
Medicare Preventive Care Is No Longer Free
Thanks to the ACA, there’s no copayment or deductible for potentially life-saving screenings for cancer, diabetes, heart disease and other illnesses. Flu shots and annual wellness visits are also free. Before the ACA, says the National Committee to Preserve Social Security and Medicare, beneficiaries had to pay 20% of the cost for most preventive care services.
Sponsored Content
Medicare Advantage Plans Won't Be As Advantageous
The ACA requires Medicare Advantage plans to spend 85% of premium dollars on health care, not profits or overhead. The plans also can’t charge more than traditional Medicare for chemotherapy, renal dialysis, skilled nursing care and other specialized services. (Beginning in 2021, Advantage plans must accept enrollees with end stage renal disease.)
Those restrictions dramatically lowered costs for plan participants since the ACA became law in 2010 and enticed more Medicare enrollees to choose Advantage plans. Over the past decade, the average Medicare Advantage premium plummeted 43% while enrollment soared 117%, according to the NCPSSM.
Sponsored Content
Medicare Insolvency Accelerates
A study cited in the amicus brief filed by the Center for Medicare Advocacy found that the ACA extended the solvency of the program’s trust fund by eight years to 2026, mostly by finding new sources of revenue and slowing the growth of payments to all providers. The Congressional Budget Office estimates that reversing those changes would cost the program $700 billion over 10 years. “Medicare would face almost immediate insolvency,” predicts the Senior Citizens League in a report.
Sponsored Content
Medicare Premiums and Medicare Deductibles Will Rise Faster
Curbing provider payments also lowered costs for seniors, helping to keep Medicare Part A deductibles and copayments in check. Similarly, Part B premiums and deductibles are much lower than projected before the ACA became law. From 2011 to 2020, Part B premiums increased 23%, the Senior Citizens League found. From 2000 to 2009—the nine years before the law’s passage—Part B premiums rose almost five times faster, soaring 112% over that period.
Sponsored Content
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Risk With Diversification"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
-
End of Expanded Premium Tax Credit Would Drive Uninsured Rates HigherTax Credits Millions of people could become uninsured if Congress fails to extend the enhanced premium tax credit.
-
Over 162,000 Dreamers Cut Off From Affordable Care Act InsuranceHealth Insurance A federal court in North Dakota has blocked ACA coverage for DACA recipients in 19 states. Here's what it means.
-
2025 Open Enrollment: Some DACA Recipients Can Purchase Affordable Care Act Health Insurance
Open Enrollment Your eligibility to purchase health insurance from the federal marketplace may have changed. Here's what you need to know.
-
The Best Places to Retire in New Englandplaces to live Thinking about a move to New England for retirement? Here are the best places to land for quality of life, affordability and other criteria.
-
What Does Medicare Not Cover? Seven Things You Should KnowHealthy Living on a Budget Medicare Part A and Part B leave gaps in your healthcare coverage. But Medicare Advantage has problems, too.
-
13 Smart Estate Planning Movesretirement Follow this estate planning checklist for you (and your heirs) to hold on to more of your hard-earned money.
-
Medicare, ACA Call Center Workers To Hold Another Protest: What To KnowMedicare and Obamacare call center employees plan another protest, this time in Washington, DC on December 12.
-
The 10 Cheapest Countries to VisitWe find the 10 cheapest countries to visit around the world. Forget inflation woes, and set your sights on your next vacation.
