(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Mark Miller
CHICAGO, Jan 5 Anyone nearing retirement - or
already retired - should pay very close attention to the doings
of the 115th Congress that was sworn in this week.
Repeal of President Barack Obama's Affordable Care Act (ACA)
tops the agenda for Republicans, who will control the White
House as well as both houses of Congress when Donald Trump takes
office on Jan. 20. That will place a heavy
financial toll on millions of older Americans who do not have
access to employer-sponsored insurance or Medicaid, and who are
too young to enroll in Medicare. But repeal of the ACA will also
raise the cost of Medicare for current and future enrollees.
The details surrounding the repeal of what became known as
Obamacare - and how it will be replaced, if at all - are
unknown. But it is clear that Republicans, rather than fix the
existing system's problems, intend to gut the most important
social insurance legislation since the passage of Medicare and
Medicaid in 1965.
And this is despite the fact that a strong majority of
Americans actually like what the ACA has brought them. Last
year, 77 percent of adults in marketplace plans, and 88 percent
of those who received Medicaid coverage under the ACA expansion,
were either very or somewhat satisfied with their coverage,
according to polling by the Commonwealth Fund, a foundation
focused on healthcare research.
For older Americans, ACA repeal will mean higher premiums
and out-of-pocket costs. Most Republican proposals that have
been circulated loosen or eliminate restrictions on higher
policy prices for older buyers. The program's income-related tax
subsidies, which aim to make premiums affordable for middle- and
lower-income households, likely would be replaced by a flat tax
credit that shifts costs to enrollees. Some repeal-and-replace
plans also weaken the current ban on covering people with
ACA AND RETIREMENT
The ACA, enacted in 2010, typically is not considered
retirement-related legislation, but it has made a big difference
for millions of workers in the critical years leading up to
Despite the improving economy, many older Americans have
never fully recovered from the Great Recession (reut.rs/2iIf86F).
Before the ACA, it was near impossible for jobless older
workers to find quality insurance in the individual insurance
market. Insurers were permitted to charge much higher premiums
for older customers than for young. Coverage of catastrophic
health events, such as cancer or a stroke, was weak or absent
In 2013, before ACA coverage fully kicked in, 14 percent of
workers aged 55-64 were uninsured. The percentage dropped to 9.1
in 2016, meaning there were 3.1 million previously uninsured
people who now had health insurance. Adults in this age bracket
have the lowest uninsured rates of any age group, Commonwealth
reports. The foundation's research also finds that the ACA helps
people bridge coverage gaps when they temporarily lose
"If you think about what the world looked like prior to the
ACA for people who had to retire early or didn't have an
employer plan, really their only option was the individual
insurance market," said Sara Collins, vice president of
Repeal of the ACA would also have a direct impact on
Medicare spending and costs to beneficiaries.
Full repeal would increase Medicare spending by $802 billion
from 2016 through 2025, according to the Congressional Budget
Office (CBO), primarily by restoring higher payments to health
providers and Medicare Advantage plans. That would lead to
higher Part A (hospitalization) deductibles and copayments, and
higher premiums and deductibles in Part B (outpatient services).
Repeal also would worsen the long-range outlook for the Part
A trust fund. Prior to the ACA, Medicare's trustees projected
the fund would lack revenue to meet all its expenses starting
this year; the law's cost savings and new taxes pushed that date
back to 2028.
Congress may also take up conservative Medicare reform
proposals that could hit the pocketbooks of future retirees.
Premium support, an idea long advanced by House Speaker Paul
Ryan, would replace today's defined set of promised Medicare
benefits with an annual voucher that enrollees would use to buy
health insurance in a market exchange. Competing plans could
include traditional Medicare and plans offered by commercial
insurance companies. The impact on premiums would depend on the
specifics of whatever program might be enacted.
Meanwhile, conservative think tank the Heritage Foundation
has proposed raising the eligibility age for Medicare from 65 to
"at least 68" over a period of 10 years, and then indexing it to
life expectancy. Unless they are still working, these folks
would rely on whatever replaces the ACA for health insurance.
It all adds up to a period of frightening uncertainty about
coverage and cost over the next few years for people close to
retirement, and possible higher Medicare costs for those already
One thing it does not sound like is a formula to make
healthcare great again.
(Editing by Matthew Lewis)