Published July 03, 2012
The Supreme Court's decision to uphold Obamacare is great news for everyone over age 50. If you're over age 65 and on Medicare, the Affordable Care Act (ACA) improves your benefits. If you're over 50 and don't have insurance through an employer, your options for health coverage will be improved greatly starting in 2014, when the new state health exchanges are launched.
Yet polling data says older Americans oppose the ACA by much wider margins than younger people. 44% of baby boomers and 46% of seniors favor repeal of the law, according to a Pew Research Center survey last November. By contrast, just 27% of millennials - and 37% of GenXers - favored repeal, the survey found.
Here's why older Americans should reconsider their opposition.
AGE 50 to 65
The U.S. Census Bureau reports that 15.3% of Americans age 50 to 64 were uninsured in 2010. That is a whopping 8,987,487 people and the number has been rising dramatically since the 2008 financial crisis and ensuing economic downturn, which cost millions of older workers their jobs and employer-provided insurance.
The exchanges will provide a simplified process for getting coverage for anyone who is not covered at work. You start with an application for insurance submitted to your state exchange. Depending on your income, you will be eligible to buy a policy in the exchange - or receive coverage under Medicaid.
Middle-class insurance shoppers will be able to buy an individual commercial policy with a government subsidy to assure affordability. But this marketplace will not be anything like the current individual insurance market, where applicants can be denied based on pre-existing conditions, prices are high and coverage is weak. Especially important for those over 50, the ACA forbids insurance companies from charging higher premiums or denying coverage based on health or age, and insurance companies will no longer be permitted to disqualify applicants based on pre-existing conditions.
Applicants will be eligible for federal subsidies on the cost of coverage if they make less than 400% of the federally defined poverty level - currently $92,000 for a family of four. For this group, the subsidy uses a sliding scale to hold costs as a share of income between 2% and 9.5%.
Meanwhile, lower-income consumers in that 50-64 age range will be among the biggest beneficiaries of a major expansion of Medicaid - also paid for by the federal government.
Medicaid currently serves mainly adults with very low incomes, but few states cover adults who do not have children. The ACA provides federal funding for a dramatic expansion of Medicaid. The new program will serve all households that are living around the federal poverty level - about $30,000 in annual income for a family of four. 57% of adults in that income range were uninsured for at least part of 2011 and 41% were uninsured for one year or longer.
The Supreme Court affirmed that states can choose not to participate in the expansion, but most will have a hard time turning down the expansion of federal aid.
The ruling will set off a scramble to get the exchanges ready in time for launch. The ACA requires that the Department of Health and Human Services certify the exchanges by January 2013; the exchanges must go live in October of that year so that consumers can start shopping for policies and enroll for coverage that would start in early 2014.
State progress has been mixed. Only 15 states have made strong progress toward launching their own exchanges, estimates John Holahand, director of the Health Policy Research Center at The Urban Institute. Many others will have trouble getting ready in time, he thinks. Under the ACA, the federal government would launch and operate exchanges in states that do not have their own ready for 2014, but even that will be a challenge, he thinks.
"It's a big job, because the federal government will need to coordinate with the state departments of insurance and their Medicaid programs," he says.
IF YOU'RE ON MEDICARE
The ACA's improvements to Medicare will continue.
The law gradually closes the "doughnut hole" in Medicare's Part D prescription drug program - the gap in coverage that starts if total annual drug spending by a senior and his or her insurance company exceeds a certain level. In 2012, coverage stops when spending reaches $2,930 and resumes at $4,700.
This year, pharmaceutical companies are providing a 50% discount on brand-name drugs to most beneficiaries who find themselves in the gap; there's also a 14% discount on generic drugs.
Last year, 3.6 million seniors hit the gap and saved a collective $2.1 billion due to the healthcare law, according to the U.S. Department of Health and Human Services. In the first four months of 2012, more than 416,000 people saved an average of $724 on prescription drugs bought after they hit the cap, for a total of $301.5 million. Last year, 3.6 million seniors entered the gap and saved $2.1 billion, the health department says.
The law also provides seniors with expanded preventive services, including an annual wellness visit, mammograms and prostate cancer screenings with no out-of-pocket cost.
The ACA improves Medicare Advantage - the managed-care option that seniors can choose for their coverage - by requiring that plans spend at least 85% of revenues providing medical care to beneficiaries rather than overhead or salaries.
The final bit of good news for seniors is that the ACA is projected to improve Medicare's long-range health. Savings contained in the law are projected to increase the solvency of the Medicare Hospital Trust Fund by eight years. (Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance. Editing by Beth Pinsker Gladstone and Andre Grenon)