The Affordable Care Act is a "game changer" for Boomers, a health professional says.(Photo: Thinkstock)
With the presidential election and Supreme Court decision behind us,
the federal government is moving forward with the Affordable Care Act.
Baby Boomers stand to gain the most.
Since the recession, Boomers
have been hard hit by unemployment, shrinking nest eggs and rising
health care costs. During those years, about 8.6 million Boomers were
without health insurance, according to a special 2009 report by
As the Boomer generation approaches
retirement, many hope that the health care law will fill the void.
"It is a game changer," says Ron Fontanetta, a health care group
practice leader at Towers Watson. "It will provide health care access to
pre-65 retirees in a very significant way."
Retirees who have
not reached age 65 are more at risk -- they don't qualify for Medicaid,
and if their former employers don't offer retiree health benefits, they
will not have a group discount.
Also, it doesn't take much for a
health insurance company to say that they have a pre-existing condition
and deny them coverage, says Paul Fronstin, head of health benefits
research at EBRI. Even if Boomer retirees can get a private health
insurance plan, it will be very costly.
Based on their age alone,
Boomers have to pay prices that are five to seven times higher than
younger Americans, according to AARP. But if early retirees can wait
until the ACA takes effect, it will change the playing field, says
-- Beginning in 2014, the law is supposed to prevent
insurers from denying coverage to those who have a pre-existing
condition. On Nov. 20, the Obama administration said that it was moving
forward to implement provisions to ban discrimination and protect
consumers from possible insurance abuses.
--The ACA also will do
away with lifetime and annual dollar limits on benefits, and it will
limit the age rating so that a Boomer can only pay three times as much
as younger person.
--Health insurance will not necessarily be less
costly. It will be operated by state health insurance exchanges, which
will offer a competitive private health insurance market that should
provide one-stop shopping.
"Hopefully, they will have a more
transparent and thus, more competitive, marketplace," says David
Certner, AARP Legislative Policy Director.The ACA is supposed to
provide subsidies and payment supports to lower-income individuals and
However, many states still have not decided if they want
to implement the exchange. Recently, Kathleen Sebelius, Secretary of
Health and Human Services, extended the state deadline for their
decision. If they choose not to participate, the federal government
will step in and run the exchanges in those states.
It's hard for
Boomers to know what to expect. It's unclear if the start of the ACA
will be delayed or if any changes will be made before it starts. Until
then, there is a lot of confusion about what people have access to,
The ACA is likely to spark many more changes.
Employers that still offer retiree health benefits may decide to provide
something different. For example, instead of a health insurance plan,
they may give Boomer retirees a fixed amount of money, called a premium
reimbursement, Fontanetta says. Retirees could use that money to select
insurance at their state exchange marketplace.
The ACA also will
change the labor force. Currently, Boomers may continue working longer
than they want to keep health insurance, especially if they have
pre-existing conditions. "ACA could change the dynamics in all kinds of
ways," Fronstin says. "You could have people going to part-time work
instead of full time. It is giving people choices."