Affordable Care Act Helped Reduce Out-of-Pocket Nursing Home Costs for Medicare Beneficiaries

Older Americans that entered Medicare after the introduction of the Affordable Care Act (ACA) were found to have less hospitalizations, a reduction in medication use for chronic disease, and less out-of-pocket costs, compared to those that were on Medicare prior to ACA.

Nursing home care was counted in out-of-pocket costs in a study published Friday by JAMA Health Forum, along with hospital care, outpatient surgery, physician visits, dental care, prescription drugs and in-home health care.

Exposure to ACA in midlife could have contributed to prevention or better management of chronic health conditions that drive health care use later in life, including nursing home services and skilled nursing care, the study found. Considering how many baby boomers are expected to need nursing home care in just a few years, scaling back Medicare and Medicaid under ACA is something that shouldn’t be taken lightly.

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“While early childhood has long been considered a critical period that influences health, our findings suggest that midlife is another key period when insurance-related policy interventions may improve long-term health outcomes,” researchers said.

These reductions align with measures taken into account as part of the Five-Star Rating System for nursing homes, with rehospitalizations being a main focus of ratings as well as activities of daily living (ADL) and monitoring depressive symptoms.

Those residing in Medicaid expansion states post-ACA had greater reductions in ADL limitations, according to the study, but out-of-pocket spending had more of a moderate decline compared to those enrolled in Medicare.

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Several factors might account for differences in out-of-pocket costs between Medicaid and Medicare beneficiaries signed on post-ACA, researchers said.

“As individuals age into Medicare, out-of-pocket costs are driven by changes in cost-sharing and utilization patterns on Medicare entry,” they said. “Individuals transitioning from Medicaid (which has minimal cost sharing) may face significant changes in out-of-pocket expenses, depending on whether they continue to qualify for Medicaid or enroll in a Medicare Savings Program, each of which covers different Medicare costs.”

Overall, findings suggest insurance coverage and financial assistance in health care should be preserved and built upon to improve access among vulnerable older adults. It’s something to keep in mind even as Medicare Advantage continues to climb and the privatization of Medicaid is being explored through managed Medicaid.

The Trump administration is expected to be more supportive of Medicare Advantage providers, perhaps even supercharging their expansion in the interest of creating a more privatized health care system.

Meanwhile, traditional Medicare will “wither on the vine,” Urban Institute Senior Fellow Robert Berenson has said.

Researchers analyzed Medicare enrollment and claims data between Jan. 1 2010 and Dec. 31, 2018 specifically for adults aged 65 to 68 years.

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