UPDATE: Senate Votes Debate Obamacare Repeal, May Affect Medicare

mitch mcconnell obamacare repeal

Republicans in Congress are one step closer to accomplishing the goal they’ve held for nearly seven years: repealing the Affordable Care Act (ACA), aka Obamacare. Shortly after 3 p.m. ET Tuesday, Vice President Mike Pence cast a tie-breaking vote on the Senate floor, pushing the final tally to 51-50, to move the procedural motion forward. The vote was split along party lines, with all Democrats voting no and all but two Republicans (Susan Collins of Maine and Lisa Murkowski of Alaska) voting yes. Some admitted voting without knowing what’s in it.

But the ACA is not officially dead just yet. Now that the votes have been cast, there is still much more to do. The passing of this motion does not necessarily mean that there is a bill to pass to replace Obamacare. Instead, it opens the floor to debate about legislation that will be aimed to replace the ACA. There will now be a period of time during which Senators present a variety of alternatives to reform health insurance and healthcare.

The replacement could be the previously introduced Better Care Reconciliation Act (BCRA), but the unpopularity of that legislation will likely hinder any passing. Another bill that may be suggested, although it was introduced two years ago, is known as a “skinny repeal bill.” This act of legislation would repeal the individual mandate and employer-sponsored coverage of the ACA while keeping other provisions of the ACA intact. There will be an open debate about these alternative plans and more, which will lead to yet another vote on new bills to come. A replacement plan, however, could require 60 votes instead of just 51. Meanwhile, several Republicans (both moderate and conservative) have stated that they will not vote for a replacement bill unless it improves the current healthcare system.

Protesters disrupted the beginning of the Senate vote, screaming “Kill the bill! Not our lives!” The Senate can probably expect more protesters the next time they vote.

How ACA repeal affects Medicare

So the ACA has been voted toward repeal, what may a replacement plan mean for Medicare beneficiaries? 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 The first version of the Better CRA repealed the .8% mark on investment income by those who make more than $200,000 per year, the Medicare Health Insurance Tax (a 0.9% payroll tax on high-income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.

Unfortunately, this is just one of many thorns in the side for Medicare beneficiaries. Last week, the House Budget Committee proposed a budget that would slash Medicare spending by $487 billion over the next 10 years. Like the AHCA, the budget is not set in stone just yet. If you have concerns about the budget or the plan to replace Obamacare, learn how to contact your local representative before he or she takes their summer recess.

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