Cutting Through the Confusion

How the Proposed House "AFFORDABLE HEALTH CARE FOR AMERICA ACT" Will Affect Your Medicare

Seniors, like most Americans, are unsure about how the proposed "Affordable Health Care for America Act" will impact their lives. This is especially true when it comes to what kind of bearing the legislation will have on Medicare. There have been conflicting claims about what will stay the same, change or be eliminated. Here is a brief update on how the House "Affordable Health Care for America Act" will change Medicare.

"Bending the Cost Curve"

Both the recently passed House bill and the drafted Senate version call for cuts of up to $500 billion from Medicare spending over the next ten years.¹ To make up for this decrease in funding, officials expect to lower costs of operating Medicare by eliminating fraud, improving reporting and care efficiencies and reducing subsidies to Medicare Advantage providers.

What Will Change?

For the most part, little may actually change for most Medicare recipients. In fact, if the legislation passed in the House of Representatives becomes law, some provisions will actually improve care and cost issues for older Americans.

Preventive Care
With a focus on preventive care, as opposed to waiting until diseases become chronic, co-payments for check-ups and wellness appointments will be reduced or eliminated.²

Closing the "Doughnut Hole"
The "doughnut hole" is the gap between coverage for prescription drugs under Medicare Part D initial coverage and catastrophic coverage. Increases in Medicare Part D coverage will eventually, conceivably by 2019, eliminate the coverage gap in prescription drug coverage.³

Physician Pay Cuts
Elimination of a 21% pay cut to Medicare physicians (due to go into effect in January) should encourage doctors to treat Medicare patients and accept new ones.⁴

Medicare Advantage Cuts
One of the changes that will affect the largest percentage of senior citizens is the proposed gradual reduction in government subsidies paid to private Medicare Advantage insurers. Approximately 25% of older Americans use Medicare Advantage in some form to pay for health care costs not covered by traditional Medicare.⁵

"Mandatory Death Panels"
Perhaps the most distorted element of the proposed legislation, the term "Mandatory Death Panels" incorrectly equates payments to physicians to discuss end-of-life contingencies to pushing older Americans into undesirable treatment plans.

To Be Continued...

It is unlikely the House bill, as it currently stands, will become law as the Senate works on its own version of a bill. Stay tuned for the latest developments and resolution of controversial issues like end-of-life consultation, cuts to Medicare funding, and other changes to Medicare policies.