The Future of Medicare under President ObamaNovember 13th, 2012 | Posted by in Medicare Costs | Medicare Eligibility | Medicare News
Right before Election Day, we published a blog post comparing the plans for the future of Medicare provided by both Mitt Romney and Barack Obama. Because the president has been re-elected for another four-year term, Obamacare will remain in effect, but will it maintain the same goals that were set before the election for the Medicare program?
To summarize, the Affordable Care Act’s goals include: ending insurance company abuses, increasing accessibility and affordability of traditional Medicare, and strengthening current benefits such as increasing coverage in the prescription drug coverage gap, offering annual wellness visits, and free preventive services. Generally, the Affordable Care Act does not aim to change the Medicare program, but to cut $716 billion in Medicare payments to home health care agencies, Medicare Advantage health insurers, and hospitals and skilled nursing facilities.
What may happen now?
Key provisions of the Affordable Care Act summarized above will remain in place and Americans age 50 and older will continue to see the following coverage:
- 50 percent discount on brand-name drugs and a 14 percent discount on generics in the prescription drug coverage gap, or “donut hole,” which will be closed by 2020
- Preventive care services and treatments
- Protection against private insurance company abuses, ensuring that nobody is turned away because of pre-existing medical conditions
- Basic package of health insurance coverage for policies sold in 2014
The Affordable Care Act authorizes a 15-member panel known as the Independent Payment Advisory Board, which will propose cuts in 2015 if Medicare spending exceeds the inflation for health-care costs. The decisions made by this board can be overridden by Congress. By law, Medicare benefits cannot be diminished, and this panel’s only task is to keep costs under control if they exceed a certain cap.
Recently, there has been talk of a “Grand Bargain” between the Democrats and Republicans in government, in which Democrats would accept changes to both Medicare and Social Security while Republicans accept tax increases. Through this bargain, President Obama offered to increase the Medicare age to 67 and begin calculating Social Security costs in a different way to reduce its yearly increases.
What are the problems?
Republicans do not believe that cuts will curb Medicare spending, and that the $716 billion in cuts will extend the solvency of the program, but only for an additional eight years. The costs of Medicare and Medicaid are said to increase to $1.8 trillion in 2020, which exceeds the financial ability of the Medicare hospital trust fund. Republicans believe it would be beneficial if the panel started proposing hospital cuts before 2020, and if President Obama increased the eligibility age to 67.
Do you think it would be beneficial to increase the Medicare eligibility age or make large cuts to hospital spending?
*This information has not been reviewed or approved by Medicare