In this episode, John and Lisa discuss how the Affordable Care Act, better known as ObamaCare,is going to affect people who are 65 and older.

Episode Transcript
Lisa
Welcome back to another edition of Aging Insight. I'm Lisa Shoalmire and I'm here today with John Ross. John and I are Elder Law attorneys here in the Texarkana area and we serve seniors and the disabled in Arkansas, Texas... Kind of all around this area. And Aging Insight is a program where we are bringing information to you at home so that you can be equipped to make the kind of decisions that you need to make and create the plans that you need to create to keep yourself at home and independent as long as possible, to not go broke in the process of aging, and not to become a burden on your friends and family. So John, welcome again to Aging Insight! 

John
Thank You.
Lisa
Today we want to talk about something that is really a burning subject on the minds of many people as we head into the fall of this year because there's some big changes coming in healthcare.

John
There are.
Lisa
And John, you wanna talk to our audience about those changes? 

John
Well, probably one of the biggest questions that I get on a regular basis is, particularly from seniors, is how is the Affordable Care Act, better known as ObamaCare, but how is this Affordable Care Act going to affect people who are 65 and older? And there's ways that it will and there's ways that it won't.

Lisa
Yeah there's certainly been a lot of rumors, and we've talked about that in other episodes, where a lot of times rumors and things get started and a lot of times... There's a lot of scary stories out there if you're a senior about what's happening to Medicare. Our last presidential election, we had a lot of talk about Medicare reform, even Social Security reform, and this is very scary to seniors.

John
Right, and a lot of times people are... They've heard things, even things like Medicare is gonna go away completely! Well that's not true, that's not any part of the Act as it sits right now. But there are going to be some ways that it will impact seniors. And some of those will be obvious, and some of those may be not quite as obvious as we might see.

Lisa
Well, and I wanted to talk about the first big obvious impact is that with the Affordable Care Act coming in coordinated with the legislation is a cut of over 700 billion... That's with a 'b'... Billion dollars in Medicare reimbursements.

John
Right, and these cuts are spread out between reimbursements to hospitals, reimbursements to doctors, but also reimbursements to nursing homes, reimbursements to home health agencies and hospice agencies. So basically, everybody that receives some form of Medicare dollar is gonna see those dollars shrink.
Lisa
Right, and what we're talking about when we use the term 'reimbursements', we're talking about what the Medicare program, what the US government through the Medicare program, reimburses these medical providers for the care and supplies and therapies that you are provided as a senior on Medicare.

John
Right. Now, when we talk about how does this impact an individual senior, that's a bit harder to discern. Because if you have Medicare and you have, in particular if you have Medicare and supplemental insurance, then if you go in for some procedure and that procedure costs $100, say, and Medicare reimburses $100, and Medicare then decides that they're gonna lower that reimbursement to they're only gonna reimburse for$90, you're not gonna be responsible for the excess. Because once they accept Medicare, they have to take whatever Medicare pays them.


Lisa
Right.
John
So you actually, as the senior, you would not see the difference in what the actual item is being charged.

Lisa
And what that is referring to is that you, as a senior on Medicare, cannot be direct billed for the difference between the charges for the care that was rendered and what Medicare reimbursed the medical provider. You are not billed for that difference. But the provider, your doctor's office, the hospital, they certainly feel the pinch of that difference.

John
They do! And that can lead to other things. One example of this would be, for example, one of the big cuts is gonna come to nursing home care. Well, Medicare covers the first twenty days of a stay in a nursing home. They pay 100% of the first 20 days in a nursing home. And then, if you have supplemental insurance, Medicare covers 80% of the next 80 days. And then if you have a supplement, that supplemental insurance will cover the other 20%.

Lisa
So it's possible that if you are in a nursing facility for rehabilitation treatment that Medicare will cover up to 100 days or some portion of those 100 days. And however, that reimbursement right now is considered by some in the government as a very generous level of reimbursement and that there is room to lower that reimbursement to those nursing home facilities for that rehab treatment. And if they lower what Medicare reimburses to the nursing facility for your treatment, John, how does that impact the facility and the cost for everyone else? 

John
Well, right. So if we're talking about somebody who stays 100 days, well we know that 100 days is covered under Medicare or up to that 100 days is covered under Medicare. But what if you need that level of care for 101 day? Well that extra day, you're gonna pay at the private pay rate. And for a nursing home in our area, that private pay rate can range from say $105, $115 per day all the way up to $180 per day. Although I would say that the average is probably about $150 per day.

Lisa
So if you're paying for that nursing home stay out of your pocket, you're writing a check then what you're gonna pay is around that $160 a day.

John
Right, and that rolls out to say $4,500 to $5,000 per month, for that care as the private pay rate. Well, with a business, if they're getting paid one thing by Medicare for that first 100 days, and then all of a sudden they're gonna get paid less for that 100 days, where are they gonna make up for that cost? Well the cost has got to go somewhere and so they'll shift it over to the private pay. And so for the people who... What I would anticipate would be that as they reduce the cost one place, those cost for the private pay would go up. And so we might actually see the private pay rate of long-term care increase because we've reduced the amount that Medicare is paying for that first 100 days.

Lisa
Well, that is one impact that we expect to see from the Affordable Healthcare Act legislation and we're gonna talk about a few other impact that seniors will likely see when we come back after this break.

John
Welcome back to Aging Inside. I'm John Ross and I'm here with Lisa Shoalmire and today we're talking about the Affordable Care Act, what some people call ObamaCare and how that legislation impacts seniors. In particular, people aged 65 and above, Medicare recipients and the fact is, is that there are going to be some impacts on you. But part of it depends on who you are. So we talked about at first that Medicare is gonna cut some of the reimbursement. So what the providers out there, doctors, hospitals, nursing homes, what they get paid is gonna go down. And of course that means they have to shift those costs to other places. So thing that you might pay for out of pocket like nursing home care beyond the first 100 days, those cost might actually go up because the other one went down. The other thing that they were trying to accomplish with the Affordable Care Act is related to what is commonly referred to as the donut hole.

Lisa
Well, that's right, John. This is related to what seniors pay for prescription medications if they have that Part D benefit with Medicare. And right now, the way that works is as you purchase medication using Medicare, the first I believe of $2,700 of that medication is paid for through the Medicare program. However, if you're a senior that has substantial prescriptions or costly prescriptions, you may run out of that annual Medicare prescription drug benefit before the year is out such that once you've purchased that first $2,700 of prescription medication, the next prescription you have filled right now you have to pay for 100% of that. And we call that the donut hole because only when you get, as you pay out of pocket for that prescription until you get to what they call a catastrophic level where you have so much prescription that it's... I think it's over $6,000, then their catastrophic coverage will pick up again. So there's an area that is not covered, and that's called the donut hole. And so the Affordable Care Act does have some... It's addressing some of these donut hole problem, and for most of our seniors, it's actually good news.


John
Well, certainly for anybody who falls into the donut hole, because what's going to happen is for the people who do fall into that donut hole, instead of having to pay 100% of the cost of those drugs, over the next several years, those drugs, they will pay a percentage of that cost. And so instead of paying full price, they will start out by paying maybe 75% next year, and then 60% the year after, until we get down to where you're only paying, say, 25% of the cost of these drugs once you fall into this kind of donut hole category. And the idea is that we want people to still be able to afford their drugs even once that Part D prescription insurance runs out. Now, notice I said that this benefits the people who fall into the donut hole. So there's about, I think if I remember correctly, we've got 70 million people who receive, who have insurance under Part D, but a much smaller percentage of those people are the ones that actually fall into that donut hole. So they'll be the ones that won't be helped. But for everybody else, if the insurance company has to keep covering drugs but at a reduced reimbursement rate, what do they do with their premium cost? 

Lisa
Right. Once again, we get to a cost-shifting situation where the premiums for people who maybe don't use a lot of prescription medication, those premiums are actually going to inch up so that you have a little more out of pocket premium cost even though you're not gonna benefit from the reduced pricing in the donut hole, so to speak. So for some seniors, it's going to cause their premium cost to go up for prescriptions, but yet for others that fall into that donut hole, their out of pocket cost will actually be less.

John
Right. And so if you have prescription drug issues and you're already in that donut hole, then you should be seeing some relief in the coming years as the cost of that lowers. For everybody else, as you see those premiums start to rise, if that becomes a financial burden on you, the cost of that Part D prescription drug plan, you might need to explore other options that are available. For example, depending on your status, if you were a veteran or perhaps married to a veteran, there may be medication benefits through the Veterans Administration to where the VA provides those medications at a reduced or possibly even no cost to that veteran or to that veteran's spouse. And this is not necessarily just for people who retired from the military, but there is a broad category of people out there who could get prescription drugs through the VA. So I guess my point is, is that since we know that through the Affordable Care Act, it's likely that the prescription drug cost... The insurance itself will become more expensive. If that's gonna be a financial burden on you, you might want to explore what other options you have as far as how you're going to pay for the medicine that you need.

Lisa
Well, so we've covered a couple of areas that there's going to be an impact from the Affordable Care Act on seniors. And we would still like to... When we come back from the break, we're gonna talk about the real big issue in the room is access to care and being able to see the doctor that you choose and that you've seen and established that relationship with. And we believe there's gonna be some changes coming in that area as well. So stay tuned and check back with us after the break so you can learn about that with us.

John
Welcome back to Aging Inside everybody. I'm John Ross, I'm here with Lisa Shoalmire and today we're talking about the Affordable Care Act, aka ObamaCare, and how it impacts people 65 and older. And so far today we've talked about how it's likely going to reduce the... Well it is going to reduce the amount that hospitals, doctors and other healthcare providers receive as reimbursement for the services that they provide. And that possibly those providers may shift that cost over to other things like private pay in the nursing home, that those costs may go up. It's also possible, we also talked about the prescription drug issue and that under the legislation, we've got some real benefits for people who fall in the donut hole. That prescription drugs will become cheaper for them over the next several years as Medicare pays a bigger and bigger percentage. Even once they've used up their primary insurance coverage, they'll still be able to get discounted drugs.

John
But, the other side of that is that those Part D insurance premiums will probably increase and so if that's a financial burden for you, it's likely that you might need to explore some additional options. For example, veteran's benefits or even possibly Medicaid benefits that might be available to you. Now, probably the biggest issue with all of this and certainly an issue that's been brought to my attention several times, is access to care.

Lisa
Right. John, the statistics are showing right now that we're already in a doctor shortage. So from the standpoint of that, needing more physicians who are delivering care to our population, we're already at that point, and frankly statistics are showing that our physician shortage is going to worsen over the next several years. And so we have a situation where the Affordable Care Act is going to reduce the reimbursements and payments to your doctor and your hospital for services that they render to you. And, doctors, they got into it because they wanna take care of people but they also have bills to pay and they also have a career here in doctoring, so we're anticipating that perhaps fewer doctors will select to accept Medicare as a prime reimbursement insurance and we believe that the reduction in reimbursement is going to effect the number of doctors that are willing to see Medicare patients.

John
Right. We've got a lot of people out there that need medical care and we have fewer and fewer doctors available to provide that care. And you don't have to be an economics professor to understand that if there's a limited supply, but a very high demand, that that's gonna have an effect on the economy. And this economy, we're talking about the economy of medicine. And if you're a doctor and there's a huge demand for your services, then you get to pick and choose the type of patient that you want to see. And as anybody would under those circumstances, you would pick the one that's gonna be the most profitable for you. And so of course if Medicare is reducing the amount that they're paying for you, then you're either going to choose not to accept Medicare and go to a private insurance type arrangement or you're going to... That physician would go to work in a different environment. Instead of being in a private practice, they might be in a clinic-type environment.

Lisa
Right, and another change we expect to see with physicians is that if they are accepting Medicare patients and they're working in that clinic environment, and we've already had folks in the community tell us about this change, you're seeing a lot of physician practices hiring in physician assistants and nurse practitioners who can help see the patients daily. And part of that is because physician offices, clinics and hospitals are having to try to get more efficient with their dollars that they are receiving back in reimbursement. And one way to do that is to hire medical providers that are less expensive to pay salary-wise so that your reimbursement dollars that you're getting go further. So we've already had seniors who have expressed concern about seeing that physician assistant or nurse practitioner as opposed to their regular physician but I think that's just a change that we're gonna continue to see.

John
Right. So, I think probably the biggest thing that most people will be able to take away from how the Affordable Care Act will impact seniors is going to be the type of care and the way you receive your care. The idea of having your doctor, a person that you know by name, who knows you and knows about your family, I think we will see that change and that you will be in more of a clinic environment where you go, you show up and you're seen by whoever happens to be there on that particular day and that will be a big change for a lot of people because they're used to seeing that one doctor who knows them, knows their family but this also carries on to some of the other topics that we've had, like for example, medical powers of attorney and general durable powers of attorney because when the care becomes less personal... If you lived, if you grow up in that little small town and there was the one little doctor there in town and he knew everybody and everybody knew him...


Lisa
Right. He knew who your mama was, he knew who your children were.

John
Right. He didn't need a HIPAA release to know that you were okay with your child having a copy of your medical records and he wasn't burdened by those sort of rules, But when it's more impersonal, where you may not have that kind of relationship with that care provider, it's gonna become much more important for you out there to make sure you've got your paperwork in order, that you've got your general durable power of attorney, your medical power of attorney, your HIPAA release, your directive to physicians and you have them accessible, for when you walk into that doctor's office or walk into that hospital because you're gonna come to a time where you're not gonna know those people like you used to.

Lisa
Right. So, the take away from today is, for the group of seniors we have out there right now, you're kind of on the tail-end of seeing medicine practice the way it was as you've always known it. And we don't see a lot of big changes shifts coming for this senior group but your children and those younger will certainly see bigger changes, and frankly every day is a new day with the Affordable Care Act and we have to learn something new everyday and there's changes just changes to stay on top of.

John
Right. But, like this information, this is the kind of stuff that you will be able to stay up on and stay abreast of by tuning into Aging Insight and listening to the kind of topics that we're talking on here, checking in with us on Facebook at facebook.com/AgingInsight, by listening to the radio program, Aging Insight on 107.1 live, noon every Saturday or by taking a look at the Aging Insight magazine.

Lisa
Right. So, we'd love to hear from you out in the community and tell us about what you've gotten from the program or what you would like to hear from us on the program and we always like to know that we've got folks out there who are enjoying it and getting something out of it.

John
That's right. Keep watching and stay tuned and we will see you on the next episode of Aging Insight.


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