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 to coordinate care for beneficiaries so that health care quality is improved and unnecessary spending is reduced. Many seniors are already benefiting from provisions of the law such as receiving free 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
- • Medicare-covered benefits are not reduced or taken away under the Affordable Care Act; rather, benefits are expanded. According to a new report from the Department of Health and Human Services, Medicare beneficiaries are expected to save an average of $4,200 from 2011 to 2021 due to lower drug costs, free preventive services, and reductions in the growth of health spending.
- • Private Medicare Advantage plans are not going away, and the extra benefits they provide are not eliminated or reduced. In 2011, Medicare Advantage enrollment increased by about 10 percent, while premiums fell by an average of 7 percent.
Free Preventive Services and Annual Wellness Visit
- • Medicare beneficiaries are eligible to receive many free preventive services with no out-of pocket costs. These include flu shots, mammograms, and tobacco use cessation counseling, as well as no-cost screenings for cancer, diabetes, and other chronic diseases. Seniors can also get a free annual wellness visit, so they can talk to their doctor about any health concerns. More than 25 million seniors have already received at least one of these free preventive services.
Lower Medicare Part B Premiums
- • Because successful reforms in the Affordable Care Act are improving Medicare efficiencies and reducing costs, the Medicare Part B premium for 2012, which is $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. These developments, along with the 3.6 percent Social Security cost-of-living adjustment, means that the average retiree received a nearly $40 per month increase in their Social Security checks in January 2012.
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, the cost paid by beneficiaries will be less for brand name and generic drugs in the coverage gap and the donut hole will be eliminated by 2020.
- • In 2012, Medicare beneficiaries in the donut hole will receive a 50 percent discount on brand-name drugs and a 14 percent discount on generics.
- • In 2011, 3.6 million beneficiaries who reached the coverage gap saved more than $2.1 billion on their prescription drugs, which averages $604 in savings for seniors and people with disabilities.
- • Women especially benefited from the Part D savings, as 2.05 million women saved $1.2 billion on their prescription drugs in 2011.
- • Nearly 4 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 prescriptions drug costs.
Improvements for Medicare Advantage Plan Members
- • Medicare Advantage plans are prohibited from charging 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.
Combating 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, which are already yielding significant savings. Nearly $4.1 billion was recovered in Fiscal Year 2011 from individuals and companies seeking fraudulent payments from Medicare and Medicaid.
- • These efforts include tougher penalties for people who steal from Medicare and more law enforcement to find 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.
Helping Americans of All Ages
The Affordable Care Act helps not only seniors, but Americans of all ages. The following ACA benefits improve health care for individuals and families.
- • Permitting young adults to remain on a parent’s health insurance policy until they turn 26, even if they are married or do not live at home.
- • Prohibiting the denial of health coverage under most individual and group insurance plans for children up to age 19 with current or previous health conditions.
- • Eliminating the cap on how much insurers will pay for medical benefits over a person’s lifetime.
- • Providing greater insurance coverage for medical expenses – up to at least $750,000 per year.
- • Establishing a federal insurance plan offered by states for adults with medical conditions considered “high-risk” by private insurers and who have been uninsured for at least six months.
- • Protecting consumers against insurance cancellations when they become sick.
- • Improving health insurance for 50 to 64 year olds, including limiting age rating and establishing a reinsurance program to encourage employers to maintain retiree health care coverage.
- • Providing free wellness care for babies and children.
- • Providing resources for finding affordable insurance.
- • Increasing access to specialty care.
- • Expanding rights of appeal for consumers denied an insurance claim.
- • Strengthening protections for nursing home residents.
- • Providing insurance assistance for small-business employers.
Government Relations and Policy, February 2012