Repealing Obamacare Will Have Consequences for Medicare

One of President-elect’s Donald Trump's campaign promises was to repeal the Affordable Care Act (ACA), aka Obamacare, and Republicans in Congress have vowed to make repeal one of their first acts in the new term. While repealing Obamacare will have implications for millions of younger people covered by the insurance, it will also affect Medicare beneficiaries.

To begin with, the ACA requires insurers to provide free preventative care coverage to Medicare beneficiaries. Without that requirement, seniors may end up having to pay for many preventative care services.

In addition, the ACA reduced prescription drug costs under Medicare Part D and phased in an elimination of the infamous "doughnut hole." The doughnut hole is the period of time in which seniors are responsible for 100 percent of the cost of prescription drugs. Under the ACA, the percentage seniors pay for drugs while in this coverage gap was capped at 50 percent starting in 2011 and is supposed to continue dropping until the doughnut hole is eliminated completely in 2020.  (For more on how the ACA addresses the doughnut hole, click here.)

A little--known fact about the ACA is that it contains provisions designed to strengthen Medicare. Repealing the ACA may eliminate those provisions, potentially destabilizing Medicare.  The ACA also established programs to reduce Medicare waste, fraud, and abuse. Thanks to these measures, according to the Center on Budget and Policy Priorities, the Medicare hospital insurance fund is projected to remain solvent eleven years longer than before the ACA was enacted. 

These factors combined with the fact that millions of near-seniors aged 50-64 could lose coverage, leaving them in poorer health when they become eligible for Medicare, could raise future Medicare costs for existing beneficiaries.

For more information on the implications of ACA repeal for Medicare, click here and here.

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