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June 20, 2012
If the Supreme Court strikes down the health law, 49 million Medicare beneficiaries could lose a variety of benefits that have already kicked in. They include:
• Prescription savings. Beneficiaries get discounts of 50 percent on brand-name drugs when they are in the so-called doughnut hole, or coverage gap where beneficiaries have no insurance help with the cost of their medications. The law phases out the gap by 2020.
• Preventive services. Beneficiaries in the traditional, government-run Medicare program receive preventive services such as mammograms and colonoscopies with no co-payment or deductible.
• Wellness visits. Enrollees can see their doctor once a year to assess their health status and risks for disease, and develop a personalized prevention plan, with no co-payment or deductible.
On average, seniors and disabled people covered by Medicare saved $604 in 2011 on prescription drugs, and more than 26 million saw their doctors for wellness visits or got preventive services. If the court strikes down only the law’s individual mandate, which requires most people to buy insurance, nearly all of the health law’s Medicare changes will remain intact.
The law also extended the life of Medicare’s Hospital Insurance Trust Fund (Part A) to 2024. Otherwise, the trust fund is projected to become insolvent earlier, around 2017, which could pressure lawmakers in Washington to be tough on Medicare when they negotiate a deficit reduction deal after the election.
The law delayed the fund’s insolvency and paid for new benefits by reducing federal spending in other areas of Medicare, increasing the cost of coverage for higher-income beneficiaries and adding what the Obama administration says are efficiencies to the system. After the give and take, Medicare will get about $428 billion less from the federal government between 2010 and 2019. Federal spending on Medicare will still rise, but less quickly.
Republicans argue that these reductions harm seniors by shifting money from Medicare to help expand insurance coverage to the under-65 population.
One of the biggest savings came from reduced payments to hospitals and other medical providers. If the law disappears, higher payments will be restored, but medical providers would also likely have more uninsured patients.
The law reduced payments to Medicare Advantage plans – mostly managed care HMOs and PPOs - that cover about one quarter of beneficiaries. Medicare has been spending more for beneficiaries in these private plans than it has been for those in the traditional program, and the idea was to equalize those payments.
For the longer term, the health law created the Independent Payment Advisory Board to propose spending reductions if Medicare grows too quickly.
If the health law goes, so will the funding and authorization for a handful of Medicare experiments aimed at reducing health care costs by better organizing and improving the quality of care. The law includes a pilot project to bundle payments to medical providers so that a single check would cover an episode of care, such as a hip replacement. Other programs are set to test value-based purchasing for medical providers and accountable care organizations.
Health care experts had hoped that these experiments would both save money in Medicare and encourage similar steps in the private health care delivery system.
Anticipating the Supreme Court's ruling
→ Supreme Court to rule Thursday on health care reform
→ New consumer protections depend on high court's ruling
→ Court challenge could result in Medicaid cutbacks instead of expansion
→ GOP promises smaller-scale health care agenda if court strikes down law
→ Some health system changes will stay, no matter how Supreme Court rules
→ Obama administration finds 3.1M young adults gained coverage under law
→ What's at stake for Medicare beneficiaries in health reform ruling
→ What's at stake for women if health law overturned
→ Washburn law professor holding to prediction that health reform law will be upheld
→ Even without the individual mandate, health law would still affect millions
The Great Health Reform Debate: Kansas experts weigh in
"The system we have in this country is a failure because people do not have equal access to care," said retired Stormont-Vail HealthCare CEO Maynard Oliverius. He is one of six Kansas experts who weigh in on the health reform debate ahead of the Supreme Court's ruling on the law.
→ Watch the six video shorts here.
Oral arguments before the Supreme Court
Day 1 — Anti-Injunction Act
→ Guide to what happened at the Supreme Court
Day 2 — Individual Mandate
→ Kansas AG Schmidt encouraged by justices' skepticism of health reform law
→ Justices grill Obama administration on health law
→ National media round-up
Day 3 — Medicaid Expansion and Severability
→ Vigorous severability, Medicaid questions
Preview to the Supreme Court oral arguments
→ Schmidt’s pledge to join ACA challenge bolstered candidacy
→ Full interview: Derek Schmidt on the legal challenge of the health reform law
→ The Health Law and the Supreme Court: A primer for the upcoming oral arguments
→ Video explainer: The health care reform challenge before the Supreme Court
→ Kansas rejects $31.5 million for insurance exchange
→ More archived stories and in-depth information on the Affordable Care Act
The KHI News Service is an editorially independent initiative of the Kansas Health Institute and is committed to timely, objective and in-depth coverage of health issues and the policy making environment. Find more about the News Service at khi.org/newsservice or contact us at (785) 783-2529.