How Repealing Obamacare Will Affect Medicare

For the moment, it appears that House Speaker Paul Ryan may have decided to table his plans to privatize Medicare, at least for right now. But Republicans continue to be united in their desire to make the repeal of Obamacare their number one priority next month – even as they struggle to find agreement on how to go about doing that.

We are hearing a lot of talk about how the repeal of Obamacare will affect – not only the 20 million people who have gained coverage since the law was enacted – but insurance companies, hospitals and entrepreneurs. We’re hearing less about how it will affect seniors who rely on Medicare – or the solvency of the program in the near future. The two programs are actually intimately intertwined and so repealing Obamacare weakens Medicare in some fundamental ways.

The one thing seniors would notice immediately if Obamacare is repealed is that the donut hole in Part D prescription drug coverage (enacted under President Bush) would reappear. In case you are unfamiliar with that, under the original plan, the 25% limit seniors paid for prescription drugs disappeared annually once total spending reached $2,800 and didn’t go into effect again until it reached $4,550. Within the donut hole, seniors were responsible for 100% of the cost of prescription drugs.  Under Obamacare, the percentage paid by seniors in the donut hole was capped at 50% beginning in 2011 and continued to drop annually until the hole disappeared in 2020.

The Commonwealth Fund reported recently that, since 2010, 8 million seniors saved over $11.5 billion on prescription drugs due to the closing of the donut hole.

Medicare recipients might also notice another change when/if Obamacare is repealed. The law requires that all insurers provide free preventative care (including flu shots as well as screenings for cancer, diabetes and other chronic diseases). Since 2013, it is estimated that 37 million Medicare beneficiaries have benefited from this provision.

Less visible will be the fact that, “since ACA’s enactment, projected program spending from 2011 to 2020 is now $1 trillion lower than the Congressional Budget Office estimated.” That is why the trust fund for Medicare is now projected to remain solvent 11 years longer than before the Affordable Care Act was enacted.

For these reasons it is important to be clear. The repeal of Obamacare will mean that Medicare beneficiaries will have to pay millions more for prescription drugs and won’t have access to free preventative care, while the program itself will be put in financial jeopardy.

If you or someone you care about is currently on Medicare, it might be important to let them know that repealing Obamacare isn’t something that will simply affect “those people.” It will have a major impact on all of our senior citizens.

Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly.