Medicare Anxiety Remains Despite Death of Senate Healthcare Bill

What does obamacare repeal mean for medicare?

Doesn’t it feel like eons have passed since Medicare beneficiaries worried about what the latest healthcare bill would mean for their coverage? It started with the American Health Care Act (AHCA) proposed by House Republicans, and continued with the Better Care Reconciliation Act (BCRA) proposed by Senate Republicans. But that’s just been a few months. So where do things lie now?

BCRA will not pass

Senators Jerry Moran of Kansas and Mike Lee of Utah, both Republicans, announced their opposition to the latest version of the BCRA last night, delivering a devastating blow to Senate Majority Leader Mitch McConnell’s goal to repeal and replace the Affordable Care Act (ACA), also known as Obamacare.  But make no mistake, just because BCRA is dead in the water doesn’t mean that Medicare patients have smooth sailing ahead. This morning, McConnell took the Senate floor to imply the fight isn’t over just yet.

“I regret that the effort that we repeal and immediately replace Obamacare would not be successful. That doesn’t means we should give up,” he said. “This doesn’t have to be the end of the story. We will now try a different way to bring the people relief from Obamacare. I think we owe them at least that much. In the coming days, the Senate will take up a vote on a repeal of Obamacare combined with a stable two-year transition period as we work toward patient-centered healthcare.”

In short, the resolve to repeal Obamacare remains strong within the Republican-controlled Congress. It’s the replacement part that’s giving them trouble. The options provided thus far were not solid enough to bring both moderates and conservatives within the party together to vote it into a majority. So now, it seems, that repeal (not repeal AND replace) is the next route that the GOP-Congress attempted. It’s like a form of shoot first, ask questions later. And President Trump appears to be encouraging them to do just that:

How repealing Obamacare would affect Medicare

But what would just a repeal of Obamacare mean for the insurance benefits and coverage that Medicare provides? Two of the more popular items that would be changed are complimentary preventive services and the closing of the “donut hole” in Medicare Part D prescription drug coverage. The first version of the BCRA repealed the .8% mark on investment income by those who make more than $200,000 per year, the Medicare Health Insurance Tax (a 0.9% payroll tax on high-income individuals), and a tax on compensation for health insurance executives. But the legislation met high resistance, which led to dropping these repeals in the second version of BCRA. But, that was the replacement bill. So that doesn’t mean those taxes will continue to remain in place.

Other parts of Medicare that would be affected, according to analysis by the Kaiser Family Foundation, are Medicare Part A and Medicare Part B. The analysis notes that out-of-pocket costs could soar for Medicare beneficiaries if the ACA is repealed because the costs are influenced by payments the government makes to healthcare providers. Obamacare legislation reined in the rate at which hospital payments were increasing. If repealed, the government would increase spending which correlates with an increase in out-of-pocket costs for beneficiaries.

If you’re part of a Medicare Advantage (MA) plan, however, repealing the ACA may not be as bad. Obamacare limited the payments to MA plans from the government and added an annual tax on the private insurers involved with MA plans. In theory, if the ACA was repealed, insurers could pass on to patients the savings gained from no longer receiving reduced payments from the government as well as no longer paying the annual tax. But that’s in theory.

The Senate is supposed to remain in session until August 11, before adjourning for a summer recess and returning in September. Will “just repeal” be voted on before then? Medicare World will continue monitoring for you.

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