US District Judge Reed O’Connor’s Friday night decision to strike down the entire Affordable Care Act would damage the well-being of older adults, those 50-64 nearing Medicare, and frail elders and younger people with disabilities who are receiving long-term care benefits under Medicaid.
Many lawyers believe the ruling is poorly reasoned and likely would be reversed on appeal. However, it is not possible to predict how the US Supreme Court, where the case will almost certainly land, will finally rule. Here are just some of the effects if the judge’s decision is upheld and the ACA is declared invalid:
Medicare. While the ACA primarily affects people of working age, it includes important provisions for those already on Medicare. The most far-reaching shift Medicare from a fee-for-service health program to one that encourages more integrated care. This includes a major expansion of Accountable Care Organizations where providers are responsible for a patient’s total cost of care, a value-based payment model where Medicare pays based on outcomes and not just number of procedures, and the growth of Medicare Advantage managed care.
The ACA also reduced drug costs for Medicare beneficiaries who fall into the so-called doughnut hole, where they are responsible for a large share of their pharmaceutical costs. The law is scheduled to completely eliminate that coverage gap starting in 2020. It also creates new payment incentives for primary care and community based transition programs for patients who are discharged from hospitals. All this would disappear if the ACA is invalidated.
Overall, killing the ACA would increase Medicare costs by about $1 trillion from 2018-2027, according to the Committee for a Responsible Federal Budget (based on data from the Congressional Budget Office). Those costs likely would be covered either by reducing benefits or increasing premiums.
Medicaid: The ACA greatly expanded home and community-based care under Medicaid, making it easier for states to provide long-term care services at home rather than in nursing homes. The ACA’s state waiver authority would be struck down with the rest of the law, making it more difficult for frail older adults and younger people with disabilities to receive care at home.
The 2010 law also created a federal grant program that funded wide-ranging experiments in new care models for those 9 million Americans who are dually eligible for Medicare and Medicaid. These include many integrated care alternatives for those with chronic conditions.
Costs for those age 50-64. The ACA includes three important provisions aimed at holding down premiums for those aged 50-64 who buy insurance on the private market. They include premium limits for those 50-64, minimum benefit requirements, and the ban on insurance companies rejecting potential purchasers due to pre-existing conditions.
Prior to the ACA, in a practice known as age-rating, 60-year-olds could pay premiums that were 11 times higher than younger buyers. The ACA capped that ratio at 3:1. If the ACA is tossed out, full age rating would certainly return and premiums for older buyers would rise sharply.
At the same time, allowing carriers to underwrite for pre-existing conditions would make insurance widely unavailable for people aged 50-64. AARP estimates that 25 million people, or 40 percent, have a condition that could disqualify them from non-group insurance. Eliminating the ACA’s minimum benefit requirements likely would result in many pre-Medicare people losing coverage for needed treatments.
For more than a year, the Trump Administration has been using its regulatory authority to undermine the ACA. But if Judge O’Connor’s ruling is upheld, the entire law would die with one stroke. And that would leave tens of millions of older adults and younger people with disabilities with much worse coverage than they have today or none at all.