Medicare and the ACA

We’ve talked a lot about how the new Patient Protection and Affordable Care Act (PPACA or ACA) will affect many un-insured and under-insured legal Americans through the development of Health Insurance Exchanges (or Marketplaces). But we really haven’t discussed how the ACA has already affected those of you currently on Medicare or those soon to be on it.

Do you realize that Medicare requirements have changed since 2010? Maybe I should first ask – do you even know what Medicare is? Do you realize there is a difference between Medicare and Medicaid? How many of you continually confuse the terms Medicare and Medicaid? I must admit, I was until I started dissecting the ACA…which basically turned into “everything I ever wanted to know about health insurance”.

MediCAID is a government funded program that provides health insurance to low-income individuals, families, and children. MediCARE is health insurance primarily for individuals 65 years of age and older. Yes, some people under 65 with certain disabilities and all those with end-stage renal disease are eligible for Medicare as well but we aren’t going to discuss those specifics here.

Under Medicare, like most health insurance plans today, you are responsible for your deductibles, co-insurance, co-payments, and premiums. There are four Parts to Medicare and each part is responsible for some part of your insurance coverage. I’m sure you’ve heard some of these “parts” bantered around on TV or the news, especially the “donut hole” and Medicare Part D. Think of Medicare as a type of alphabet soup…

  • Part A: helps cover in-patient hospital care, skilled nursing facility, hospice and home health care
  • Part B: helps cover doctor and preventive services
  • Part C: a way to get Medicare benefits through private companies (includes Part A and B and possibly D)
  • Part D: helps cover prescription drugs

When the ACA was passed, not only did it target making health insurance more available to all Americans but it is strengthening Medicare as well. The ACA, the federal government is looking to tighten requirements, reduce payment and recordation errors, and fight fraud and abuse. Ok, that’s a good thing overall but what are the specifics that will affect the senior citizen on Medicare? Under the ACA, these benefits have been provided to seniors:

  • $250 prescription drug rebate in 2010
  • 50% discount on brand-name drugs in the donut hole in 2011: we will keep it very simple — the donut hole is what you fall into when your insurance plan reaches a certain monetary amount for your prescription drugs before YOU are responsible for 100% of the cost.
  • Closes the donut hole by 2020
  • Annual wellness exam at no cost to you
  • No co-payment for certain preventive services
  • Coordination of care between doctors – we definitely need that as we age!
  • Improved quality of care at hospitals

And…starting in 2014, the Affordable Care Act offers additional protections for Medicare Advantage Plan members by taking action that limits the amount these plans spend on administrative costs, insurance company profits, and things other than health care.

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