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 Commonwealth Fund.
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 Fronstin.
-- 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 families.
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, Fronstin says.
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."