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When AARP holds town hall meetings, officials have found that the public is equally unclear about Medicare, the government health insurance program for Americans with certain disabilities or who are more than 65 years old, and whether it will change under the ACA.
[READ: How to Choose Between Medicare and Medicare Advantage]
"There always has been confusion about Medicare," says Dr. Gail Wilensky, a policy analyst who directed Medicare and Medicaid from 1990 to 1992 and served as a senior health and welfare adviser to President George H.W. Bush. "Now there's more confusion than usual because of the focus on the Affordable Care Act and how it does or does not relate."
Here are five myths and facts surrounding Medicare and the ACA.
Medicare is ending. False. Obamacare is not replacing Medicare. In fact, AARP representatives say that Medicare will become stronger once the ACA is fully in effect. "Medicare's guaranteed benefits are protected in ways they hadn't been protected in the past," says Nicole Duritz, AARP's vice president for Health Education and Outreach.
Medicare beneficiaries must buy more health insurance to comply with the ACA. False. This stems from misunderstandings about the individual mandate, a key ACA provision requiring people who are currently uninsured to buy coverage or pay a penalty. Medicare is health insurance, so beneficiaries do not need to buy anything during the ACA enrollment period that starts on Oct. 1, when the state-run health insurance marketplaces open for business. Medicare beneficiaries can change their plans and prescription drug coverage during the Medicare open enrollment period, which is Oct. 15 through Dec. 7. Medicare beneficiaries who are satisfied with their current plans don't have to do anything.
Medicare beneficiaries will pay more for their medications under Obamacare. Partially true. Under the ACA, higher-income Medicare beneficiaries - those who earn more than $85,000 per person or $170,000 per couple - pay slightly more for their prescription drug coverage, or Medicare Part D. But this only affects about 5 percent of beneficiaries, AARP's Duritz points out. The vast majority of Medicare beneficiaries will see their drug costs go down as the ACA begins to close the "donut hole," a coverage gap that forces Medicare beneficiaries to pay 100 percent of their prescription drug costs up to a certain amount. This gap is expected to be fully closed by 2020, but those who fall into the gap this year will get a 47.5 percent discount on certain brand-name drugs and a 21 percent discount on generic drugs until they reach the out-of-pocket limit. In 2012, roughly 3.5 million Medicare beneficiaries saved an average of $706 each, the federal Department of Health and Human Services reported in March. As the donut hole closes, the savings will increase.
Medicare beneficiaries won't be able to see their current doctors. False. Nothing in the ACA expressly changes which doctors Medicare patients can see. Hospitals, physicians, pharmacies and other health care providers make routine business decisions and may choose to withdraw from the Medicare program, but no master switch is flipping on Jan. 1 requiring Medicare beneficiaries to leave their current doctors and choose new providers.
Medicare premiums are rising. Partially true. Medicare premiums are calculated by a complicated formula established long before the ACA, and those premiums rise annually. "Medicare premiums are rising because health care costs rise each year, but less rapidly than premiums for private health insurance, and less rapidly than previously projected," explains Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities. Those who earn more than $85,000 per person or $170,000 per couple will continue to pay more for their Medicare Part B coverage, as they have since 2007 - that increased cost is not related to the ACA.
Amid rhetoric of an impending Medicare train wreck caused by Obamacare, Van de Water emphasizes: "Medicare faces financial challenges, but it is not on the verge of 'bankruptcy' or ceasing to operate."
Dr. Mark Pauly, a professor of health care management at the University of Pennsylvania's Wharton School, affirms that "there will always be a subsidized insurance program for the elderly," but explains that it is a malleable policy subject to political will.
"What it will pay for and how much of it will be paid by non-poor seniors is, however, highly uncertain and will depend on politics as much as economics," he says.
For information about your Medicare Supplement insurance, please call John Caris at 707-935-6294 x103 or email him.