ACA vs. ACHA vs. LTPAC Round 1: Payments and Reimbursements

ACA_vs_AHCA

 

Note: this is the first part of an ongoing series looking at potential effects that the transition from the Affordable Care Act (ACA) – also known as Obamacare – to the American Health Care Act of 2017 (AHCA) – also known as Trumpcare –  will have on the elderly as well as LTPAC facilities.

 

Despite an initial setback in March when the Republican-backed attempt to repeal the Affordable Care Act (ACA), the Republicans came back swinging in May as they got the much-needed congressional approval to move forward with the American Health Care Act (AHCA).  While many details still need to be worked out, experts speculate that the plan has significant potential to affect healthcare for many Americans – especially the elderly.

 

Here are the most likely impacts that the bill will have on the elderly:

 

  • Higher Premiums for the Elderly: in the past, insurers could not charge more based on a person’s age, but that restriction could be tossed out and insurers could charge the elderly more- even those looking for supplemental Medicare.

 

  • Paying for Preventative Care: According to a TIME/CNN feature on the AHCA, “before Obamacare, most Medicare beneficiaries paid a co-payment for preventive services, and, depending on their coverage, possibly a percentage of the overall doctor’s bill.” However, under the ACA, Medicare beneficiaries have received free preventive screenings such as mammograms and colonoscopies.

 

  • Higher Copays on Prescriptions: One of the major principles of the ACA was the closing of the “doughnut hole.” Before the ACA, beneficiaries had to pay the full amount, or 100%, of their drug costs. However, the ACA mandated that each year, the amount that beneficiaries would pay would be on a schedule to shrink each year. Today, Medicare recipients pay 40% for brand-name drugs and 51% for generic drugs. Had the ACA continued along its trajectory, the doughnut hole would have closed so that beneficiaries would only be responsible for 25% of their brand-name and generic drugs after they meet their deductible. The AHCA plans to stop the doughnut hole at its present rate, meaning that if a specific drug costs $1,000, the elderly patient would be responsible for paying $400 of brand-name and $510 of generic drugs, resulting in a $150-$260 year difference.

 

  • An Added Financial Burden: While copay might not seem like a major issue, half of all Medicare beneficiaries had incomes below $24,150 per person in 2014, according to the Kaiser Family Foundation, so every little savings helps. If elderly patients were expected to pay for a portion of their services, this would have an even bigger impact on elderly patients who are already struggling.

 

  • Lower Medicare Tax for High Earners: While the burden would possibly be higher for the current elderly, future generations – especially high earners – would get a break under the new law. According to The ACA Compliance Bulletin, ACA increased the Medicare tax rate for high-income individuals, requiring an additional 0.9 percent of wages, compensation and self-employment income over certain thresholds to be withheld. The AHCA would repeal this additional Medicare tax beginning in 2023.

 

As the law appears to change every day, one can only wait and see what impact the new act, if passed, will have on the elderly and LTPAC facilities.