Things to Know About Your Medicare Plan if ACA is Repealed

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What Will Happen to Your Medicare If the ACA Is Repealed?

One of the first actions by the Republican-led Congress in 2017 was to move toward repealing the Affordable Care Act (ACA), or “Obamacare.” This first step, while it doesn’t guarantee a dismantling of the law, does raise the question of what might happen to Medicare, which has several ties to the ACA, if a repeal occurs.

While it’s impossible to say what the exact effects would be, it’s likely that an ACA repeal would result in significant changes for the Medicare program and its beneficiaries. A total repeal of the ACA—without replacement provisions enacted—could lead to higher costs in some areas but lower costs in others.

The reason for these cost changes, according to a Kaiser Family Foundation (KFF) brief, is that the ACA has many provisions that are tied to Medicare. To help you understand how your Medicare costs might be affected if the ACA is totally repealed, we reviewed the KFF brief and put together an analysis of the potential changes and impacts.

How an ACA repeal might raise costs for Medicare beneficiaries.

The KFF brief points to a report by the Congressional Budget Office that estimates a complete ACA repeal would lead to as much as $802 billion more Medicare spending by 2025. Higher Medicare spending, in general, could lead to increased costs for beneficiaries in certain areas.

If the law is repealed—and no new laws are enacted in their place—costs may rise for beneficiaries in a few key ways.

  • Increased Part A deductible and copay costs, as well as increased Part B premium and deductible costs. If spending resumes to pre-ACA levels, Medicare deductibles, copays, and premiums could rise to offset the increased spending.
  • Increased costs for Part B preventive care. An ACA repeal would reverse the extra funds going to pay for Medicare beneficiaries’ preventive benefits.
  • Increased Part D costs for those in the coverage gap. The coverage gap, or “donut hole,” for Part D drug benefits was partially filled by extra funds mandated by the ACA.

How an ACA repeal might lower costs for Medicare beneficiaries.

While some costs for beneficiaries could rise if the ACA is repealed, the KFF brief suggests a few ways in which costs could decrease for some.

  • Improved benefits and lower out-of-pocket costs for Medicare Advantage enrollees. The ACA reduced the amount of money that Medicare Advantage plans get from the federal government. Thus, a repeal of the ACA means these plans would get more money, allowing them to pass the savings on to their enrollees.
  • Lower Part D premiums. According to the KFF brief, average premiums for Part D drug plans could decrease because “Part D premiums are set to cover 25.5 percent of program costs, and reinstating the Part D coverage gap would lower Part D spending.”
  • Lower payroll taxes and premiums for wealthier beneficiaries. The ACA was partially funded by an increase in payroll taxes for individuals who earn more than $200,000. In addition, the ACA raised premiums for wealthier Part B enrollees and Part D enrollees who make more than $85,000.

Need more information?

As more information is revealed about Congress’s plans for the ACA and Medicare, we will be sure to tell you how the changes might affect you. You can also read our analysis of how President-Elect Donald Trump’s proposed health care plan could affect Medicare.

If you’re approaching Medicare eligibility or looking for information about Medicare plans, contact one of our licensed insurance agents. You can reach us by phone at 855-802-1206 from 7 a.m. to 5 p.m. Mountain Time; closed weekends.

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