The Affordable Care Act and Medicare

If you are wondering what relationship exists between the Affordable Care Act and Medicare, let’s start out by assuring you of one thing.

All the well-documented difficulties associated with Obamacare enrollment and trying to use the healthcare.gov website should be of no concern to people on Medicare.

True, “Obamacare” does refer to the Affordable Care Act (ACA), which makes numerous references to Medicare in its roughly 900 pages of text. According to page 2 of the 2013 Medicare Trustees Report, the ACA contains about 165 provisions affecting Medicare by “reducing costs, increasing revenues, improving benefits, combating fraud and abuse, and initiating a major program of research and development to identify alternative provider payment mechanisms, health care delivery systems, and other changes intended to improve the quality of health care and reduce costs.”

However, the recent and current difficulties associated with Obamacare enrollment through healthcare.gov and the healthcare exchange or Health Insurance Marketplace do not concern people on Medicare. Obamacare Open Enrollment—not to be confused with the Oct. 15-Dec. 7 Medicare Open Enrollment Period—refers to the period from Oct. 1 of this year until Mar. 31, 2014, when people who do not have health insurance can sign up for health coverage through the Health Insurance Marketplace. Because people with Medicare are already insured, the Health Insurance Marketplace and Obamacare enrollment are of no consequence to them, and no Medicare plans of any type are available through the Marketplace.

This means people on Medicare have absolutely no reason to visit healthcare.gov, the website that appears to have made many lives miserable in recent weeks. Instead, people looking online for information about Medicare should go directly to medicare.gov.

Finally, how does the Affordable Care Act affect Medicare?

The Affordable Care Act has improved Medicare preventive services. Millions of Medicare users have received free preventive health services, such as mammograms and colonoscopies, since the ACA came into effect. Medicare annual “wellness” visits are also available at absolutely no cost. For Medicare preventive services requiring coinsurance or copayments, Medicare supplement plans help eliminate any out-of-pocket costs.
The ACA is helping to lower drug costs for people on Medicare. The Affordable Care Act requires drug companies to offer discounts on covered brand-name and generic drugs during the donut hole phase of Medicare Part D coverage. According to the Medicare.gov publication, Closing the Coverage Gap, individuals now pay only 47.5 percent of the cost of covered brand-name drugs and 79 percent of the cost of generic drugs during the donut hole phase, which is scheduled to be phased out entirely by 2020.
The ACA imposes limited payment cuts and restrictions on Medicare Advantage plans. The National Council on Aging explains that, when the Affordable Care Act was passed in 2010, “private insurance companies running Medicare Advantage (MA) plans were paid about $1,100 more per person than what was paid for people in original Medicare. As a result of health care reform, starting in 2012 payment rates to MA plans were gradually reduced in many parts of the country, so they are about the same as rates under original Medicare.” The ACA also places new limits on what Medicare Advantage plans can spend on administration, marketing, and certain other costs not related to medical services.

One predictable result of payment cuts to Medicare Advantage plans is that some plans have raised premiums and reduced coverage—which certainly underscores the importance of investigating all your Medicare Open Enrollment options this year and every year. Medicare Open Enrollment gives you the opportunity to leave a Medicare plan that has changed in any way you don’t approve of, and allows you to enroll in another Medicare Advantage plan or switch to a Medicare supplement plan.

The ACA makes it easier for people qualifying for nursing home care under Medicare Part A to compare nursing home options. The ACA aims to make the nursing home industry more transparent so that older Americans can learn important details about nursing homes, such as their administrative costs, the amount of direct care residents receive, and any complaints filed against individual facilities. The ACA also calls for establishment of a government Nursing Home Compare Medicare Website so that consumers will find it easier to compare nursing homes and find suitable nursing home options.
The Affordable Care Act raises the possibility of introducing nominal cost-sharing to two Medicare supplement plans, beginning Jan. 1, 2015. These plans, Medigap Plans C and F, may or may not undergo minor changes as a result of the Affordable Care Act. Regardless of whether small cost-sharing fees are introduced to these two plans, Medigap will remain an important cost-saving investment. The ACA does not address the possible introduction of any cost-sharing fees to the other eight Medicare supplement plans currently on the market.

Overall, Medicare appears in very good shape for the foreseeable future—and, remember, if you are on Medicare the comedy of errors associated with healthcare.gov has absolutely nothing to do with your Medicare plan, enrollment options, or personal information.

What do you make of the healthcare.gov fiasco? Leave a comment below!