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AARP Bulletin

Is Your Medicare Safe?

The health law protects Medicare benefits, but it reduces future Medicare spending

If the ACA is cutting payments to my hospital, won't that diminish the care I get?

The law is nudging hospitals to improve their quality of care by penalizing those with the highest rates of hospital-acquired conditions, such as bedsores. It also penalizes hospitals with too many readmissions of Medicare patients who have heart attacks, heart failure or pneumonia within 30 days of a hospital stay.

"If you're going to get penalized for not following up and having patients readmitted, you're more likely to give good follow-up care," says Matt Eyles, a health care consultant.

The penalties and bonuses are small — about a quarter of a percent on average — but critics say financially struggling safety-net hospitals serving a lower-income population are being treated unfairly. They care for poorer, sicker patients and often find it harder to get patients to follow discharge orders.

The ACA also cuts the rate of growth of reimbursements for hospitals with the goal of forcing them to improve efficiency. But even some supporters acknowledge that cutting the rate of reimbursement to hospitals could affect the quality of care.

"For a long time, if you talked to physicians or hospital administrators, cost control was not of interest. Now it's become very chic," says Brookings' Aaron. But, he adds, "I'm not going to say that paying someone less will make him produce more."

I'm in my 50s and I'm afraid Medicare won't be there for me. Does the ACA help Medicare in the long run?

The ACA closes half or more of the shortfall in the Medicare Part A hospital insurance trust fund by slowing the growth of reimbursement payments to hospitals, Aaron says.

Medicare costs continue to grow more rapidly than Medicare income, though, and that makes the ACA's goal of controlling the rate of growth in health care spending critical, he says.

The health law has extended the life of the Part A hospital insurance trust fund to 2026, the Medicare trustees reported in May. But the trustees warn that the availability and quality of care received by Medicare beneficiaries could fall relative to that received by people with private health insurance unless the health care industry becomes more efficient. Aaron says, "I think Medicare beneficiaries more than any other group have a stake in the success of the Affordable Care Act."

To find more information about the health care law and Medicare, check out the website

Marsha Mercer is an independent journalist.

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