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Obamacare: What is the Impact on Seniors?

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Senior citizens, age 65 and older, are now the largest age group in the United States, based on the census in 2010 - the same year Obamacare was enacted. More importantly, their number is still growing at a rate faster than the country's total population. What does Obamacare, also known as the Patient Protection and Affordable Care Act (PPACA) or Affordable Care Act (ACA), have in store for this group?

While insurance experts, politicians and average Americans seem to have endless arguments and differing opinions about the positive and negative impacts of Obamacare, many agree on one thing: seniors get the short end of the stick.

Medicare Changes: Where it Hurts the Most
Medicare has guaranteed health insurance access to seniors, young persons with disabilities, and people with end-stage renal disease and Lou Gehrig's Disease since 1965. It was later complemented by Medicare Advantage, a network plan wherein the government pays for private health coverage. The latter has been popular with low-income seniors because it is less expensive than traditional Medicare.

In 2014 when most Obamacare provisions will be phased in, Medicare Advantage benefits will be reduced by as much as 2 percent to make way for the expansion of Medicaid - the specialized program for financially disadvantaged families - and other subsidies.

In addition to Medicare Advantage cuts, the impact of the entire law is likely to limit access to physicians as there will be an anticipated shortage of doctors coupled with a surge in newly insured patients under Obamacare.

An additional impact on costs will be the higher taxes on drugs and medical devices, on which many seniors rely daily. Federal premium taxes will also apply to Medicare Advantage and the health plans for federal retirees.

Nursing Homes and CLASS Act
Under Obamacare, seniors who live in nursing homes will have additional protection as new and stricter regulations are imposed on nursing home owners. The states will also be responsible for checking the facilities and ensuring that their conditions are conducive to a high quality of life for the residents.

A supposed centerpiece of Obamacare's long-term care solution is the Community Living Assistance Services and Support (CLASS) Act, a plan designed to help seniors stay independent in their own homes - and at the same time save costs on nursing homes. It posed a threat to the future of the nursing home industry, until it was shelved indefinitely due to issues concerning its financial stability.

Broader Prescription Drug Coverage a Small Consolation?
Supporters of the law have plenty to say about how the Act will actually put money back into the seniors' pockets. They believe that Medicare and Medicaid changes will ensure better coverage for senior citizens, enabling them to reduce out-of-pocket expenses.

In particular, the Act is said to have covered the "donut hole" gap in prescription drug coverage, allowing seniors to access more prescription drugs through Medicare. Supporters claim that more than 5 million Medicare beneficiaries were able to save nearly $3.5 billion on medication on Obamacare's first year. They say that Obamacare will also reinforce the fight against Medicare scams, the protection of the trust fund and the long-term security of Medicare.

Contrary to some reports saying that seniors are mostly disappointed with Obamacare, supporters claim that as much as 90 percent of senior citizens who are under Medicare plans are satisfied with the program's prescription drug coverage because of the savings that come with it. These savings are expected to increase further this year.

While some Obamacare critics acknowledge these benefits, many say that these are a small consolation compared to the Act's bigger challenges - which seniors will now have to fight in their golden years.

To learn more about the impact of Obamacare and possible solutions to overcome any impact, it is best to discuss your situation with your agent.

Click here to return to Amity Insurance E-Newsletter Sept 6, 2013.