What the Left has said:
The Affordable Care Act –
- Closes the gap in Medicare prescription drug coverage known as the “donut hole.”
- Gives seniors the same ability to choose their own doctor through Medicare as always.
- Stops excessive overpayments to insurance companies through Medicare Advantage.
- Protects existing Medicare benefits.
- Institutes a volutary long-term care program called the CLASS Act.
But here’s the truth:
- The donut-hole “fix” in ObamaCare is no fix at all.
- In reality, seniors will have less access to physicians and fewer choices.
- Seniors will face an increased tax burden.
- Seniors will be forced off of Medicare Advantage.
- ObamaCare is unpopular with seniors
- The CLASS Act has been deemed financially unsound and will not be implemented.
Ask the Experts:
Click on a name to find out how to request an interview –
- Robert Moffit, Ph.D, Senior Fellow at the Heritage Foundation
- Grace-Marie Turner, President of the Galen Institute
- Grover Norquist, Americans for Tax Reform
- Jim Martin, 60 Plus Association
The so-called donut hole in Medicare prescription drug coverage means that once a senior’s prescription drug costs reach $2,700, they are then responsible for all of their prescription drug costs until they reach the threshold for catastrophic coverage. Before that point is reached seniors will have spent $4,350.25 of their own money.(1)
The donut-hole “fix” in ObamaCare is no fix at all. First, seniors who are in the donut hole are being issued a one-time $250 “rebate” check to help with expenses, which is nothing more than redistribution of taxpayer money. Congress cut 4 million of these checks, at a cost of $1 billion to taxpayers.(2)
To further address the donut hole, seniors are also guaranteed a 50% discount on covered brand-name drugs.(3) But it is the market, not the government, that controls the actual price of that drug. A drug that once priced at $100 before ObamaCare could be easily be re-priced at $200 and then offered at $100 with the 50% discount.(4) The savings alleged in ObamaCare disappear. This is precisely what happens when the government tries to tell private business what it can and cannot charge for their products and services.
This year, 77 million members of the baby boom generation will begin to retire.(5) The Association of American Medical Colleges ominously predicts a shortage of 124,000 physicians by 2025.(6) Even more ominously, a third of doctors surveyed in March 2010 by the Medicus Firm said they would quit the profession or retire early because of ObamaCare.(7) Grace-Marie Turner at the Galen Institute wrote, “One financial planner reported that well over half of his physician clients have asked him to restructure their finances so they can retire in 2013 – the year before the main provisions of the new health overhaul law take effect.” (8) And, given the low reimbursement rates that physicians see for accepting Medicare patients, more and more physicians are opting not to take any new Medicare patients.(9)
ObamaCare will exacerbate this problem through a new bureaucratic body called the Independent Payment Advisory Board (IPAB). This board - comprised of 15 unelected "experts" - will make decisions about Medicare payments for certain treatments that have the force of law. Congress can only stop the recommendations of this board with a supermajority vote in both houses. By cutting payments for certain treatments, this board will limit seniors' access to certain treatments. This is also known as health care rationing.(10) This part of the law is so unpopular - even with some Democrats - that now a bipartisan effort is underway in Congress to repeal the IPAB.(11)
Seniors will also face greatly increased taxes, as Robert Moffit, Director of the Center for Health Policy Studies at the Heritage Foundation elucidates (12):
Under the new law, seniors are going to pay higher taxes. The higher taxes on drugs (effective in 2011) and medical devices (effective in 2013) will affect seniors especially, as they are more heavily dependent on those very products. Older people, of course, have higher health costs than younger people. But the existing tax deduction for medical expenses will be raised from 7.5 to 10 percent of adjusted gross income in 2013. The reduced tax deductibility of medical expenses is waived for seniors only from 2013 to 2016. Likewise, older people have larger investments than younger people, and thus high income older persons will be more heavily impacted by the new 3.8 percent Medicare tax imposed on unearned or investment income (effective 2013).
New federal health insurance taxes—both the premium taxes and the excise taxes—will also impact older workers and retirees. The federal premium tax (effective 2014) will be applicable to Medicare Advantage plans and health plans offered to federal retirees in the Federal Employees Health Benefit Program (FEHBP). Likewise, starting in 2018, there is a new 40 percent federal excise tax on “Cadillac” health plans (defined as $10,220 for individual coverage and $27,500 for family coverage). This will also apply to FEHBP plans, which enroll federal retirees.
And Grover Norquist of Americans for Tax Reform points out these five taxes that will hurt seniors the most (13):
- Individual mandate tax penalty
- Cadillac plan excise tax
- Dividends tax hike
- Medical device excise tax
- Medical itemized deductions "haircut"
With nearly 11 million seniors enrolled, Medicare Advantage has been a fantastically popular alternative to traditional Medicare for many seniors.(14) But no matter how much they like them, these seniors won’t be able to keep these plans with the cuts to Medicare Advantage under ObamaCare. ObamaCare changes the way payments for Medicare Advantage are calculated. Medicare’s chief actuary is predicting a reduction in payments to this program of $145 billion over the next 10 years. It is estimated that the cuts will force roughly 7.4 million seniors off of Medicare Advantage plans by 2017.(15)
In short, there’s a good reason why a vast majority of seniors oppose ObamaCare. In February, 2011, a Kaiser Health Tracking Poll showed that less than one-third of all seniors have a favorable opinion of ObamaCare, and a full 59% of seniors have an unfavorable view.(16) Another year later, in 2012, those numbers remain virtually unchanged.(17)
The Community Living Assistance Services and Supports program (also known as the CLASS Act) was included in ObamaCare as a voluntary long-term care insurance program. Over the past year, the Department of Health and Human Services has been forced to drop the program because they could not provide any actuarial data to suggest that the program would be financially sound in the coming years. This was simply another accounting gimmick included in the law to make the Congressional Budget Office cost estimates look better.(18) This was just another empty promise for seniors.