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The Affordable Care Act and Its Impact on the Aging

August 14, 2014
Author: Mounica Gummadi, C’15

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (ACA) making preventive care more accessible to Americans (“Affordable Care Act and the Title X Program”).  Since that moment, the United States healthcare system has undergone a constant transformation with the goal of providing medical coverage for millions of uninsured Americans. A key demographic of people being affected by these changes is the rapidly growing aging population, estimated to compose 19% of the total U.S. population by the year 2030 (“Aging Statistics”).

This age group is also responsible for the highest level of spending—per capita medical costs are approximately three times greater for those who are aged 65 and above than for younger adults (“Managing The Quality Of Health Care” 162). Figure 1 below indicates the role that aging plays in overall healthcare spending.

Contribution of Aging to Health Care Spending

As demonstrated, the aging population plays a relatively large role in healthcare spending as opposed to any other demographic. The ACA addresses this by increasing preventive services for seniors while cutting down fraud, abuse and waste in the system. The bill expands Medicare services resulting in an estimated $5000 savings per beneficiary over the next 10 years via reduced drug costs and free preventive services (“How the Affordable Care Act Helps Seniors”). Services such as flu shots and screenings for cancer, diabetes and other illnesses would be available to seniors at no cost, and Medicare Part B premiums would be reduced. In the past, a subset of Medicare beneficiaries has been burdened by the coverage gap, or “donut hole”, in which the beneficiaries must bear the cost of expensive medications. By 2020, the ACA will close the coverage gap, and seniors who reach the “donut hole” this year will save approximately $1, 265 via discounts on both brand name and generic drugs (“How the Affordable Care Act Helps Seniors”). Another proposed benefit to seniors would be reduced misuse of Medicare and Medicaid through the implementation of tougher penalties and increased law enforcement. Over the past 5 years, it is estimated that $19.2 billion was recovered from those requesting fraudulent payments (“How the Affordable Care Act Helps Seniors”). Through this additional regulation, it would be possible to avoid unnecessary spending.

While these are much needed benefits for the increasing aging population, the ACA still proposes to cut Medicare spending by $716 billion over the next 10 years meaning reimbursements for hospital costs, home health services, hospices and skilled nursing services will be greatly reduced (Mercer 2014). The estimated breakdown is that home health care will see a $66 billion cut, $39 billion will be cut from skilled nursing services, and $17 billion will be cut from hospice care as shown in Figure 2 (Mercer 2014). While some sources, such as AARP’s Beth Howard, indicate that these cuts should instead be seen as “reform” or reduction in spending rather than complete elimination of funds, the truth is that such changes have already started negatively impacting those who are chronically ill and disabled. On July 15, 2014, the New York Legal Assistance Group filed a federal class action lawsuit noting that home health care cuts were being made without appropriate notice nor granting opportunities for appeals after legislative action was taken proposing these cuts (Bernstein 2014). This is just one example of the issues that can arise when those citizens with the greatest need are not being prioritized.  Often times, seniors utilizing home health care services are “aged, homebound and sicker than the average Medicare population” according to Mr. Weber of the Washington Times. An estimated two-thirds of Medicare home health care users also live at or below the national poverty line meaning without these funds, access to similar care would be very difficult to obtain (Weber 2014). In addition to directly affecting patient care, these proposed cuts could also eliminate jobs and threaten businesses in the home health sector.

Medicare Payment Cuts

Overall, while there are many benefits that the ACA lists for the American aging population, the proposed cuts to services used by seniors with chronic illnesses and the greatest need for support could prove to be detrimental in both the short and long term. The rapidity with which these cuts are being made is alarming as it is unsure whether the system is able to manage the proposed changes. The argument has been made that preventive care is an absolute priority to which I agree, however, the impact that such sudden shifts to necessary services such as home health care and hospice services can have on patients and the economy should be further evaluated prior to taking legislative action. As shown in the beginning, the rapidly growing aging population plays a key factor in health care spending and more people will need access to not only preventive services, but also resources such as hospice and home care as they move towards the end of their lives. While gradual funding changes seem reasonable, immediate cuts to these resources could be detrimental to those who strongly rely on such services.

WORKS CITED

“Affordable Care Act and the Title X Program.” Office of Population Affairs (OPA). Department of Health and Human Services, n.d. Web. 20 July 2014.

“Aging Statistics.” Administration on Aging. Department of Health and Human Services, n.d. Web. 19 July 2014. <http://www.aoa.gov/Aging_Statistics/>.

Bernstein, Nina. “Medicaid Home Care Cuts Are Unjust, Lawsuit Says.” The New York Times. The New York Times, 15 July 2014. Web. 21 July 2014. <http://www.nytimes.com/2014/07/16/nyregion/legal-group-sues-over-cuts-to-assistance-in-medicaid-home-care-services-.html?_r=0>.

“How the Affordable Care Act Helps Seniors.” Public Policy. National Committee to Preserve Social Security and Medicare, n.d. Web. 21 July 2014. <http://www.ncpssm.org/PublicPolicy/Medicare/Documents/ArticleID/216/How-the-Affordable-Care-Act-Helps-Seniors>.

Howard, Beth. “11 Myths About Healthcare Reform.” AARP, Sept. 2012. Web. 21 July 2014. <http://www.aarp.org/health/health-insurance/info-09-2012/medicare-and-health-care-reform-myths.html>.

“Managing The Quality Of Health Care.” Economic Report of the President (2013): 161-83. Council of Economic Advisors. The White House, Mar. 2013. Web. 21 July 2014. <http://www.whitehouse.gov/sites/default/files/docs/erp2013/ERP2013_Chapter_5.pdf>.

Mercer, Marsha. “Is Your Medicare Safe?” AARP Bulletin. AARP, Jan.-Feb. 2014. Web. 21 July 2014. <http://www.aarp.org/health/medicare-insurance/info-12-2013/medicare-and-affordable-care-act.html>.

Obamacare Cuts Medicare Payments to Fund Other New Programs. Digital image. The Heritage Foundation. Congressional Budget Office, July 2012. Web. 21 July 2014. <http://www.heritage.org/multimedia/infographic/2014/obamacare-in-pictures-spring-2014/obamacare-in-pictures-slide-13>.

Weber, Dan. “Obamacare Cuts Home Healthcare for Millions of Seniors.” Washington Times. The Washington Times, 28 Feb. 2014. Web. 21 July 2014. <http://www.washingtontimes.com/news/2014/feb/28/weber-obamacares-punch-to-home-health-care/>.

 

 

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