Repealing the health law would mean higher Medicare premiums, the Kaiser Family Foundation found in a recent analysis. Wellness visits and prescription drugs also would cost more. Although under the current law, reductions in doctor payments could create an access issue.
The impact could be greatest for the lowest-income seniors, who qualify for both the Medicare and Medicaid programs, and there could be a significant slowdown in federal funds available for their care.
The health-care law cuts $716 billion in Medicare spending, largely by reducing how much insurers and health-care providers get paid to manage seniors’ care. Since Medicare beneficiaries pay a percentage of the program’s overall budget, lower spending means lower premiums.
“If the Medicare savings are repealed, and the benefit enhancements are repealed, there’s a direct effect on seniors today,” said Tricia Neuman, director of the Kaiser Family Foundation’s Medicare Policy Project.
Health and Human Services estimates that Medicare beneficiaries paid $94 less out-of-pocket for hospital and doctor coverage this year than they would have without the health-care law. That number will rise to $572 in 2021 as the Medicare cuts grow larger.
“An expected slower rate of growth in Medicare spending leads to a slower rate of growth in beneficiary out-of-pocket payments,” the February 2012 research brief concluded.
About 5 percent of seniors would see some premiums increase, as the Affordable Care Act expands an income-related premium for anyone earning more than $85,000.
Overall, though, analysts say that out-of-pocket spending by seniors would increase if the Affordable Care Act is repealed. “On average, spending for seniors would rise because their premiums would rise,” Neuman said.
The Romney campaign says that seniors spending less would also get less: Cutting Medicare’s reimbursement rates for hospitals and doctors could force them to try to do more with fewer resources.
“There’s not enough efficiency they can wring out of the system,” said Oren Cass, domestic policy director for the Romney campaign. “What’s actually going to happen is that seniors are going to see an erosion in the quality of care and the quality of services.”
The Office of the Medicare Actuary noted in May that certain health law cuts to doctor reimbursements could cause payment rates to “become inadequate in the long range.”
Repealing the health law also would have an impact on Medicare’s “doughnut hole,” the gap between Medicare’s regular and catastrophic drug coverage, in which seniors are responsible for footing the bill. The average senior who falls into this space spends $604 on prescription drugs.
The health-care law changes that: It gradually eliminates the doughnut hole over the course of a decade. This saved seniors who fell in the doughnut hole an average of $643, according to Health and Human Services analysis.
All that extra drug coverage, however, does come with a cost. In order to foot the cost of closing the doughnut hole, seniors had to spend $2 more on prescription drug premiums in 2012 than they would have without the health law. By 2021, they will pay $33 annually to cover this new benefit’s costs.
The biggest change, however, may not be in Medicare at all. It could result from Romney’s planned spending reductions for approximately 6 million low-income seniors eligible for both the Medicare and Medicaid programs.
“Seniors can survive with the changes to the Affordable Care Act,” said David Cutler, a health economist at Harvard University who has advised the Obama administration on health policy. “No one is going to claim that’s the end of the word. The Medicaid cuts have the potential to be really, really bad for seniors.”
Romney has proposed turning Medicaid into a block grant program, where a state would get a lump-sum check for covering its beneficiaries. That check would be set to grow at 1 percent faster than inflation. That would be significantly slower than Medicaid’s historical growth, reducing the strain on the federal budget.
These seniors, usually referred to as “dual eligibles,” tend to have expensive health-care needs, accounting for 20 percent of Medicaid’s $251 billion in spending last year.
The Romney budget would reduce Medicaid spending on current beneficiaries by more than $600 billion over the next decade, according to a recent Bloomberg Government analysis.
“That’s where the risk to the population comes in,” said Gail Wilensky, a former Medicare director under President George W. Bush. “If too much money is withdrawn from Medicaid, unless you think massive efficiencies are achievable, that’s a place where seniors could be vulnerable.”
The Romney campaign contends that there are indeed big efficiencies to be found in the Medicaid program, especially if states are given more flexibility to design their own programs.
“It’s a restructuring of the program that gives states the possibility to pursue different models,” Cass said. “Gov. Romney would give states the flexibility to experiment. He believes if the program is structured properly, spending can go an awful lot further.”