The Supreme Court will review the constitutionality of the Affordable Care Act (ACA) this term in California v. Texas, with oral argument scheduled for November 10, 2020. This ongoing litigation challenges the ACA’s individual mandate, but raises questions about the entire law’s survival, and could result in dismantling the entire ACA.
While
the ACA’s changes to the individual insurance market and its expansion of
Medicaid have been the focus of much media coverage, the law has affected every
part of the health care system, including Medicare. The ACA is woven into
Medicare, with over 165 provisions affecting the program. Many of these
provisions help beneficiaries and strengthen Medicare’s financial well-being.
Striking down the ACA would have disastrous ramifications for Medicare
beneficiaries and the U.S. health care system as a whole. In a series of CMA Alerts leading up to the
Supreme Court oral argument, the Center will highlight some of the harms
undoing the ACA would bring to Medicare and Medicare beneficiaries.
Before
the ACA, prescription drug coverage (Medicare Part D) required enrollees to pay
the full cost of their drugs in the benefit’s coverage gap, commonly known as
the “doughnut hole.” The doughnut hole was essentially a very large deductible
that kicked in every year after beneficiaries’ drug costs exceeded an initial
coverage limit. After reaching the initial coverage limit, enrollees who did
not receive low-income subsidies had to pay 100% of their prescription drug
costs until they spent enough to qualify for catastrophic coverage. Many
Medicare beneficiaries struggled to afford their medications while they were in
the doughnut hole. As a result, many reduced their medications (by splitting
pills or skipping doses, for example), or stopped taking their medications
altogether, impacting quality of life and health outcomes.
The
ACA included a provision to phase out the coverage gap for both
brand-name and generic drugs by 2020; the Bipartisan Budget Act of 2018
made additional changes to the coverage gap, closing the Part D coverage
gap for brand-name drugs in 2019 instead of 2020. Closing the doughnut
hole eased the medication affordability crisis for beneficiaries, with billions
of dollars of savings in drug costs.
Undoing
the ACA would jeopardize drug coverage for millions of Medicare beneficiaries.
Reinstating the coverage gap would increase costs for Part D enrollees who have
relatively high drug spending. Closing the “doughnut hole” was very popular
with the public; according to Kaiser Family Foundation, in 2018, 81% of the
public (79% of seniors) had a favorable view that “the [ACA] gradually closes
the Medicare prescription drug ‘doughnut hole’ or ‘coverage gap’ so people on
Medicare will no longer be required to pay the full cost of their medications
when they reach the gap.”
The
Center for Medicare Advocacy strongly opposes dismantling the ACA and the
lawsuit that seeks to do so on unmerited grounds. The Center joined AARP
and Justice in Aging in submitting an amicus brief in support of California and
the other states defending the ACA against the lawsuit now at the Supreme
Court. The brief highlights the ACA’s key protections for older adults and the
devastating consequences that would ensue if the law is nullified.
Additional
Resources:
- Kaiser Family Foundation, “Potential Impact of California v.
Texas Decision on Key Provisions of the Affordable Care Act” (updated
September 2020): https://www.kff.org/health-reform/issue-brief/potential-impact-of-california-v-texas-decision-on-key-provisions-of-the-affordable-care-act/#medicare
- Kaiser Family Foundation, “The Medicare Part D Coverage Gap:
Costs and Consequences in 2007” (August 2008): https://www.kff.org/wp-content/uploads/2013/01/7811.pdf
- CMS Report, The Affordable Care Act: A Stronger Medicare
Program (February 2013): http://www.cms.gov/apps/files/MedicareReport2012.pdf.
- Dena Bunis, Medicare “Doughnut Hole” Will Close in 2019, AARP
(February 2018), https://www.aarp.org/health/medicareinsurance/info-2018/part-d-donut-holecloses-fd.html
- Center statement concerning the fate of the ACA in light of
Supreme Court nomination hearings (October 2020): https://medicareadvocacy.org/supreme-court-nomination-could-have-devastating-consequences-for-the-affordable-care-act-and-medicare/
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