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Editor’s Note: Journalist Philip Moeller is here to provide the answers you need on aging and retirement. His weekly column, “Ask Phil,” aims to help older Americans and their families by answering their health care and financial questions. Phil is the author of the new book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil.
This is the second in a series of pieces about how the nation’s three big federal benefit programs — Social Security, Medicare and Medicaid — might be affected by the significant changes being proposed by either President Donald Trump, his cabinet appointees or congressional Republicans.
READ MORE: Column: Under a President Trump, Medicare reforms are a matter of when, not if
The first piece dealt with the impact of raising the retirement age for Social Security and Medicare. Today, I’ll review the major reasons why Medicare beneficiaries and their families need to be paying careful attention to the debate over repealing and possibly replacing Obamacare — aka Affordable Care Act.
If you expect me to tell you what will happen to Obamacare, you might as well stop reading right now. Changes clearly will be made, but no one knows what they are. Republicans, having finally claimed control of Congress and the White House, are discovering how hard it is to actually govern rather than oppose Democrat policies.
While Obamacare is about insuring working-age Americans and their families, older Americans covered by Medicare and Medicaid also face significant changes to their health insurance if the law is changed. The ACA improved Medicare coverage, boosted taxes and reduced program spending. Older Americans on Medicaid also would face changes to that program, because any effort to change Obamacare would affect the law’s major expansion of Medicaid, including how Washington pays states for administering the program.
For starters, the ACA greatly expanded the roster of tests and procedures that Medicare enrollees can get with little if any cost to make sure enrollees are healthy and to help them stay that way. Medicare’s list of so-called wellness provisions includes many items added by the ACA:
Good health does cost money, of course, but so does having to treat people who have not been taking care of themselves. Perhaps all of these measures would survive the repeal process. However, considering that some of these benefits might disappear, Medicare enrollees ought to work with their doctors right now to make sure they’re taking full advantage of these wellness benefits.
Another main Obamacare feature has been its reduction in out-of-pocket spending in Part D Medicare prescription drug plans. This has been accomplished through the elimination of the so-called “donut hole” by 2020. Medicare says enrollees have saved more than $2,000 per person, on average, because of this single change.
READ MORE: Should we raise the retirement age for Social Security and Medicare?
It’s quite possible, of course, that the donut hole will be totally gone by the time the “replace” components of “repeal and replace” actually have taken effect. Given the shouts from both parties about high drug prices, it seems unlikely that Republicans would have much appetite for being tagged with efforts to make people spend more money on prescription medicines.
STABILIZING MEDICARE’S FINANCES
Obamacare’s other big Medicare impact came via financial improvements it put in place to help the program. It raised a bunch of taxes, including requiring high-income wage earners to pay higher Medicare payroll taxes and stiff premium surcharges for Medicare Part B and D premiums. Health providers and Medicare Advantage insurance plans were also willing to accept lower payment levels from Medicare in exchange for the law’s provisions that would expand their access to more insurance customers.
Before the passage of the ACA, the Medicare trust fund that pays claims for Part A hospital and nursing home expenses had been projected to run short of funds by 2017. The ACA has pushed that date out more than 10 years.
Republicans reportedly want to do away with many of these taxes. Unless other funding streams are created to replace them, the longer-term finances of the program would be at greater risk. Ironically, these actions would “force” Republicans to cut health care spending to curb runaway deficits.
As actual GOP plans come into sharper focus, sharp Medicare battle lines will form for politicians and the public alike. Expect the proposals to come coated in friendly sounding packages that tout health care improvements. But it will be crucial to look inside the packages to get an understanding of whether the Medicare program that would emerge from their enactment is one you want to have.
READ MORE: How plans to repeal the Affordable Care Act could affect Medicare
Long-term federal spending trends on health care are not sustainable. In a rational world, we would have a badly needed bipartisan discussion of how we are going to pay for these programs. Perhaps some cuts are needed. Maybe wealthier taxpayers should pay more. Is spending on national defense sacrosanct? But cooperative governance has escaped us for many years, and prospects for it today seem especially bleak.
If you’ve returned to work and have an employer health plan, should you drop Medicare? Phil Moeller answers that question and more in tomorrow’s forthcoming Q&A.
Phil Moeller is the author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs” and the co-author of the updated edition of The New York Times bestseller “How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security,” with Making Sen$e’s Paul Solman and Larry Kotlikoff. On Twitter @PhilMoeller or via e-mail: firstname.lastname@example.org.
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