How Obamacare Ruling May Affect Senior Healthcare

The U.S. Supreme Court is due to rule on the Affordable Care Act later this month.

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The loudest shoe to drop so far in the 2012 election season, not to mention healthcare in general, will be heard later this month when the U.S. Supreme Court rules on the constitutionality of the health reform law. Enacted in 2010, the Affordable Care Act (ACA), informally referred to as Obamacare, is being implemented in stages over several years. Its most far-reaching proposals are scheduled to take effect in 2014.

The court could toss out all, some, or none of the act's provisions, so the range of possible outcomes of its decision is very broad. And depending on what the court does, of course, politicians in both parties will propose steps to either restore or remove ACA components.

Seniors age 65 and older already have guaranteed access to health insurance through Medicare and, for lower-income seniors, Medicaid. They thus would not be directly affected by the most far-reaching and controversial requirement of the law. This is the individual mandate that would require nearly everyone in America to get health insurance or pay a penalty for failing to do so, beginning in 2014.

However, the law has already influenced an enormous range of prices for procedures and medical products offered under Medicare.

Were the court to strike down elements of the law governing these changes, some experts predict, healthcare providers would be hard-pressed to know what to charge for healthcare.

Two other significant provisions of the law also directly affect Medicare:

Medicare drug prices. This is one of the biggest direct Medicare benefits under health reform. Over several years, the law is set to reduce the amount of money that Medicare drug plans (Part D of Medicare) can charge for drugs when their coverage lapses in what's known as the "doughnut hole." Price reductions that have already taken effect have saved Medicare consumers billions of dollars in drug costs, the government estimates.

Preventive health services. Health reform greatly expanded the menu of free preventive services to Medicare consumers. The Centers for Medicare & Medicaid Services (CMS) said more than 14 million Medicare users get at least one free preventive health service during the first five months of 2012.

Also, older Americans in their 50s and early 60s who are too young to qualify for Medicare often face enormous challenges—and costs—finding private health insurance. Losing the individual mandate could hurt their health insurance prospects, depending on whether the court also rules on related provisions of the act.

Beyond the individual mandate, the law's most significant shift is its requirement that insurers must sell policies to anyone who applies, and can no longer refuse to insure a person because of preexisting health conditions. It is hard to imagine the court invalidating the individual mandate while still forcing private insurers to approve all applicants. Again, the impact on seniors of these provisions affects non-Medicare coverage.

Other at-risk provisions of the law include:

Price protection. The law restricts an insurer's ability to charge higher rates to older people tied to their age and health conditions.

Insurer rebates. Employer-based health plans must spend at least 80 to 85 percent of their premiums on actual healthcare services, depending on the size of the plan.

Health insurance exchanges. Price competition is expected to be enhanced by state insurance exchanges that would let people shop for coverage. It's possible some states would proceed with exchanges even if the court knocks down this provision of the law.

Coverage of children up to age 26. This provision, already in effect, benefits older parents by allowing them to keep children on their family policies up to and including the age of 26. Several private insurers already have promised to continue offering this feature even if it's disallowed by the Supreme Court.

Twitter: @PhilMoeller