Jul
The Affordable Care Act and Your Retirement Costs
Written by Leo FranklinWith the Supreme Court clearing the way for the Affordable Care Act to be implemented, retirees may be wondering, “What’s next?”
Retirees are not alone in asking this question. Almost every American citizen will be impacted by the law, yet no one seems to be able to fully explain how the law will fundamentally change health care, save for the arguments against and for the law presenting last Spring to the High Court.
The political debate is probably drowning out much of the news that would focus on the impact of the law.
Some of the laws of the ACA as it relates to retirees
One of the most widely explained benefits of the law is that young people, defined as children and adults under the age of 26, will be able to stay on their parent’s insurance policies under the law. This, of course, has no impact on those who are on Medicare.
Making it possible for those with a pre-existing condition to obtain insurance coverage is also not going to have an impact for those on Medicare.
The law as it was proposed promises to deliver some new services under Medicare at no additional cost. Perhaps the biggest advantage the ACA provides to retirees is the elimination of the “donut hole” starting in 2013 – the requirement from Medicare that requires retirees to pay 100% of their costs of prescription drugs until they’ve spend $4,700.
In what is probably the biggest potential impact for Medicare, the reimbursements that health care providers receive may be cut under the law. This has been a threat that has hung over the health care industry for years.
If the cuts are ever implemented, and they have not been so far, some providers may choose not to treat Medicare patients because the amount they receive for the service may not cover the costs they incur to deliver the service.
As many retirees have learned, medical care can be a major expense in retirement, even with Medicare. That is unlikely to change under the new law. There will be always be the possibility of some specialized care that is needed but not covered that would cost the elderly patient some services rendered.
The Affordable Care Act will help many, but it seems that nothing will ever eliminate the possibility of a large medical bill. If health care costs are a concern for you, it could be useful to set up a reverse mortgage today.
You could arrange for these funds now and access them later as a line of credit only if and when you need to, or you can access the funds immediately. For many retirees, a reverse mortgage could be treated as an “insurance policy” without monthly premiums, offering you and yours peace of mind against big medical bills.
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