The Affordable Care Act (ACA), signed into law on March 23, 2010, aims to provide greater access to health care coverage, improve the quality of services delivered and reduce the rate of increase in health spending. The ACA provides new ways to help hospitals, doctors and other health care providers coordinate care for beneficiaries so that health care quality is improved and unnecessary spending reduced. Many seniors are already benefiting from provisions of the law such as receiving preventive services and paying lower Medicare prescription drug costs. Below are some of the ways that the Affordable Care Act is helping seniors.
Medicare Benefits Expanded
- Under the ACA, Medicare benefits will not be reduced or taken away, but rather are expanding. Medicare beneficiaries will save, on average, about $4,200 over the next 10 years due to lower drug costs, free preventive services and reductions in the growth of health spending. Since passage of the ACA in 2010, more than 7.3 million people with Medicare saved over $8.9 billion on prescription drugs.
- Private Medicare Advantage (MA) plans are not going away. As of September 2013, 29 percent (15 million) Medicare beneficiaries were enrolled in a MA plan.
Free Preventive Services and Annual Wellness Visit
- Medicare beneficiaries are eligible to receive many preventive services with no out-of pocket costs. These include flu shots, tobacco use cessation counseling, as well as no-cost screenings for cancer, diabetes and other chronic diseases. Seniors can also get an annual wellness visit so they can talk to their doctor about any health concerns. More than 32.5 million seniors have received at least one of these preventive services with no out-of-pocket costs since 2010. In the first six months of 2013, 16.5 million people with traditional Medicare took advantage of at least one free preventive service.
Lower Medicare Part B Premiums
- Because successful reforms in the Affordable Care Act are making Medicare more efficient and reducing costs, the Medicare Part B premium for 2012 was $99.90, $6.70 lower than the amount projected, and only a few dollars more than the premium that most beneficiaries had been paying. In addition, the Part B annual deductible decreased by $22 to $140, the first time in Medicare's history when the deductible was lower than the previous year. The 2013 Part B monthly premium – $104.90 – is also lower than previously projected by the Medicare trustees.
- The Medicare Part D premium and deductible will not increase in 2014. The past five years have been among the slowest periods of average Part B premium growth in the program’s history.
Lower-Cost Prescription Drugs
- For the Medicare Part D prescription drug program, Medicare beneficiaries who fall into the coverage gap, known as the "donut hole," automatically receive a discount on prescription drugs. Each year, beneficiaries pay a reduced cost for brand name and generic drugs in the coverage gap. In 2020, the donut hole will be closed.
- In 2013, Medicare beneficiaries in the donut hole will receive a 52.5 percent discount on brand-name drugs and a 21 percent discount on generic drugs. Seniors who reached the donut hole will save, on average, about $1,209 per beneficiary.
- Nearly four million people with Medicare who were in the donut hole in 2010 received a one-time, tax-free $250 rebate from Medicare to help pay for prescription drug costs.
Improvements for Medicare Advantage Plan Members
- Medicare Advantage plans cannot charge enrollees more than traditional Medicare for chemotherapy administration, skilled nursing home care and other specialized services.
- Starting in 2014, the health care law provides additional protections for Medicare Advantage plan members by taking strong steps that limit the amount these plans spend on administrative costs, insurance company profits and items other than health care to 15 percent of their Medicare payments.
- Since the passage of the ACA, average MA premiums have declined by 9.8 percent.
Medicare Fraud, Waste and Abuse
- The Affordable Care Act includes new resources and tools to protect taxpayer dollars by preventing fraud in Medicare and Medicaid, building on the efforts of the Department of Health and Human Services and the Justice Department. In the last three years, the government recovered over $14.9 billion from individuals and companies seeking fraudulent payments. These efforts have been strengthened by tougher penalties for people who steal from Medicare and more law enforcement to identify criminals abusing the law and beneficiaries.
- Other measures include supporting technology to prevent fraud before it happens. Examples are preventing fraudulent payments from going out in the first place vs. trying to recapture the money and working with the Senior Medicare Patrol program, which educates seniors and their friends and neighbors about how to stop Medicare fraud.
Medicare Delivery System and Payment Reforms
- The ACA establishes the Center for Medicare and Medicaid Innovation to test new ways of delivering care that are intended to improve quality while reducing the rate of growth in Medicare spending. Examples include programs to reduce unnecessary hospital readmissions by coordinate care and services for patients when they leave the hospital.
- Other provisions provide for the development of Accountable Care Organizations, bundled payments and medical homes – all intended to provider higher-quality, coordinated care for beneficiaries.
- The ACA also provides bonus payments to primary care physicians for certain services.
Helping Americans of All Ages
The Affordable Care Act helps seniors and Americans of all ages. Provisions already in effect prohibit insurance companies from denying coverage to children with pre-existing conditions; prohibiting insurance companies from taking away coverage when someone needs services, eliminate lifetime limits on insurance coverage, allow young adults to stay on their parents’ plan until they turn 26 and provide assistance to employers to help them continue providing retiree health insurance benefits. Beginning in 2014, the following ACA benefits will improve health care for more individuals and families.
- Requiring guaranteed issue and renewability of health insurance regardless of health status and allowing rating variation based only on age (limited to a 3 to 1 ratio), geographic area, family composition and tobacco use in the individual, small group market and the health insurance exchanges.
- Prohibiting annual limits on the dollar value of coverage.
- Creating state-based health insurance marketplaces where individuals and small businesses with up to 100 employees can purchase qualified coverage.
- Providing refundable, advance tax credits and cost sharing subsidies to eligible individuals to help pay for health insurance.
- Requiring U.S. citizens and legal residents to have qualifying health coverage or pay a phased-in tax penalty. If affordable coverage is not available, an individual will be exempt from this requirement.
- Expanding Medicaid (optional for states) to individuals not eligible for Medicare under age 65 with incomes up to 133 percent of the federal poverty level and providing enhanced federal matching payments for new eligibles.
- Permitting states the option to create a Basic Health Plan for uninsured individuals with incomes between 133-200 percent of federal poverty level who would otherwise be eligible to receive premium subsidies in the exchange.
- Permitting employers to offer employees rewards of up to 30 percent, potentially increasing to 50 percent, of the cost of coverage for participating in a wellness program and meeting certain health-related standards.
Government Relations and Policy, December 2013
Sources: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-Releases/2013-Press-Releases-Items/2013-11-26.html; http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-Releases/2013-Press-Releases-Items/2013-07-29.html; http://kff.org/interactive/implementation-timeline/ and www.whitehouse.gov.