Will a repeal of Obamacare affect my Medicare?
I have been asked this by a number of concerned clients in response to the recent headlines from Washington.
First, to clear up any confusion, Medicare does not fall under Obamacare (ACA Law), or vice versa. These are two entirely separate government programs designed to serve two different groups of people with minimal overlap. To elaborate, Medicare provides insurance to Americans sixty-five and older or those with disabilities. It provides access to contracted providers nationwide and has its own cost mechanisms and eligibility rules. In contrast, Obamacare created marketplaces through which eligible consumers (those who are not Medicare eligible) can purchase insurance from insurance companies. Income based subsidies are possible for those who qualify and eligibility is determined by state residency and enrollment guidelines.
So, back to the question, would a repeal affect Medicare? I think more indirectly than directly. There are provisions in Obamacare that do affect Medicare, most notably Part D, the prescription drug program and specifically the Coverage Gap or “donut hole” within the drug plan design. A full repeal could negatively impact Medicare Part D beneficiaries and increase their share of cost. President Trump has not addressed this specific provision but only reiterated his personal wish to preserve Medicare and keep it functional.
Of the recent GOP reform plan that never came up to a vote, a change to the Coverage Gap provision was not one of them. The bigger question I think is, will major changes to one government healthcare program indirectly impact the economies of an entirely different government healthcare program. The answer is, maybe, or even probably, but how exactly cannot be determined at this time. Significant changes to Medicare are looming, but due to its own economic challenges. More on that in future issues.