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Health Care Reform Endgame: What’s Really in This for Americans Age 50 and Older?
Long-term care, aid for prescription drug costs, free preventive screenings
By Tamara Lytle, AARP Bulletin Today
March 19, 2010
The historic health care reform measure that the House soon will vote on includes a number of provisions that will have a special impact on older Americans.
The final version of the sweeping measure offers beefed-up subsidies, grants Medicaid access to millions of moderate-income families and means 32 million Americans would gain health care coverage. It requires workers of all ages to carry health insurance or pay a penalty. And it prevents insurance companies from denying coverage to people with preexisting conditions, dropping coverage for policy holders who become ill or imposing lifetime limits on coverage. It also phases out annual limits on coverage.
Americans age 50 and older are singled out for particular attention with new benefits such as closing the Medicare part D “doughnut hole,” guaranteeing preventive care under Medicare and providing long-term care assistance.
“For every American who has struggled without access to health insurance—and for all those at risk of losing their current coverage with the next job loss, illness or premium hike—this package presents the best hope to offer health security for them and their families,” said Bonnie M. Cramer, AARP’s board chairman.
The newest version of health care legislation is a rewrite of the Senate bill but is more generous to seniors on issues such as prescription drug aid.
House Democrats released the final version of the legislation Thursday and could vote as early as Sunday.
President Obama postponed a trip to Indonesia to stand by so that if the legislation passes he can sign it quickly—capping a yearlong effort on his signature domestic priority. The Senate must then vote on changes to that bill that the president and the House want.
Historic measure
“This is the most important domestic legislation since Social Security in 1935 and Medicare and the Civil Rights Act of the 1960s,” says Ralph Neas of the National Coalition on Health Care. “This is a once in a generation moment for the American people.”
John Rother, AARP’s executive vice president of policy and strategy, says the measure is crucial for older Americans in many ways, and the latest version is a good package. “It would make very substantial improvements in Medicare,” Rother says.
One of the biggest improvements is help for men and women with high prescription drug costs who now fall into the doughnut hole coverage gap, where Medicare does not cover their drugs costs for a portion of the year. This year, those who hit that coverage gap would receive a $250 rebate. Next year, those in the doughnut hole would get a 50 percent discount on brand-name drugs that are not covered by Medicare. By 2020, the doughnut hole would be eliminated.
Stella Johnson, a retired teacher in Washington, D.C., spoke at a news conference Thursday with House Speaker Nancy Pelosi, describing how the Medicare coverage gap has had a devastating effect on her financial security.
“I had to use my utility bill money in order to buy my medicine,” Johnson says. “Retirees across the country desperately need this bill to pass right away.”
Critics speak out
But conservative health care experts say seniors get the short end of the stick with health care reform as the bill remakes the health insurance system.
“It’s one of the worse pieces of legislation I’ve seen in my 30 years in Washington. It basically takes all the problems we have in Medicare and Medicaid and replicates them on a vast scale,” says Robert Moffit, director of the Center for Health Policy Studies at the conservative Heritage Foundation.
More than half the $940 billion cost of the bill over the next decade would be paid for by savings in the Medicare program. Subsidies to insurers for
Medicare Advantage would go down, prompting many insurance companies to stop offering the coverage, contends Joseph Antos, health care expert and scholar at the conservative American Enterprise Institute.
Democratic lawmakers tout the Medicare savings from reining in fraud, abuse and waste as a way to keep the Medicare system solvent longer, especially important as more boomers retire and start using their benefits. But Moffit contends those savings will be used to pay for the subsidies and expanded Medicaid coverage for moderate-income families.
That aid will be available through insurance exchanges that offer policies to small businesses and people who don’t have affordable coverage through their jobs. The government will regulate what’s included in those insurance policies.
Medicare doctors
Rother says the federally required benefits will lead to better coverage for many Americans and help consumers compare coverage options. But Moffit calls it a dangerous concentration of control over health insurance. “The government will determine what you can get and what you can’t get.”
Antos says the reform gives 32 million Americans access to health insurance, which will increase demand for medical care without adding to the supply of providers. The reforms do however increase payment rates for primary care doctors in Medicare to encourage more physicians to accept Medicare patients.
“It is the practical question of: Can I get that appointment? Will I have access to the most modern treatment,” Antos says. “That’s what seniors are worrying about.”
Rother says the 32 million Americans won’t gain their coverage until 2014, giving the health system time to adapt. “It’s the right thing to do but it is going to require changes in the way health care is delivered,” Rother says. “The doctor can’t do everything. We will have to rely more on teams of people, including nurses and social workers.”
Older Americans
Along with the prescription drug coverage, the legislation includes many provisions that affect older Americans and Medicare:
• Wealthier workers will pay new Medicare taxes on unearned income and pay a higher rate for their Medicare payroll tax. The provisions apply to families with more than $250,000 and individuals with more than $200,000 in annual income.
• Expensive insurance policies will be subject to a new excise tax, though not until 2018. The reconciliation bill—final changes the Senate must approve— also adds new help for companies whose health care premiums are high not because they are offering expensive plans, but because many of their workers are older.
• Companies that offer health insurance to early retirees (ages 55 to 64) could tap a temporary program for help until the new health exchanges are set up to help people find coverage.
• Insurance companies would be able to charge older Americans who buy their own coverage only three times more for premiums than they do younger policy holders. Rother says older Americans now pay nine or 10 time as much. The trade group America’s Health Insurance Plans said that will end up raising rates for consumers under age 30.
• Medicare patients would get free preventive care.
• An independent board would make recommendations on controlling Medicare spending, subject to a vote in Congress.
• States will get aid to help their older residents live independently instead of moving into nursing homes. And individual workers could buy into a new long-term care insurance program that would help pay for services such as home aids or even wheelchair ramps when they become ill or frail. “This will change our long-term care experience from one based on nursing homes and institutions to one based on the ability of people to continue to live independently,” Rother says.
Passing the sweeping measure will require 216 votes—likely all of them Democratic since Republicans have united against the bill.
Obama and Democratic leaders have been pushing hard behind closed doors to win over wavering Democrats in what is expected to be a close, suspenseful vote.
Neas says some Democrats—especially the fiscal conservatives—could be won over by Thursday’s assessment by the nonpartisan Congressional Budget Office on how much the legislation will save the federal treasury. The CBO says over the next 10 years, the measure will cut the deficit $138 billion and during the decade after that, by $1.2 trillion.
The Senate already has voted on the underlying bill but is expected to vote on the new reconciliation bill changes as early as next week if the House bill passes and is signed by the president.
Robert Blendon, Harvard professor of health policy and political analysis, says that however the votes turn out, both parties will work to convince seniors and other voters next fall that their approach was correct. The polarization is there, even though both parties agree the health care system needs fixing. “The biggest thing we have learned from the debate is how wide the divide is [in the country] over what the role of government should be in solving these issues,” he says.
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