How the Affordable Care Act Helps Seniors

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. Improvements made in the ACA to Medicare preventive services and prescription drug coverage have lowered the out-of-pocket costs of millions of seniors. Below are some of the ways that the Affordable Care Act is helping seniors.

Lower-Cost Prescription Drugs

• Since passage of the ACA, more than 10.7 million people with Medicare saved over $20.8 billion on prescription drugs. The ACA reduces prescription drug prices for seniors and closes the coverage gap, known as the “donut hole.” 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. The law closes the coverage gap in 2020.

• In 2016, Medicare beneficiaries in the donut hole receive a 55 percent discount on brand-name drugs and a 42 percent discount on generic drugs. Seniors who reach the donut hole will save, on average, about $ 1,945 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.

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 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. Because of the ACA, over 39 million seniors have received at least one of these preventive services with no out-of-pocket costs.

Lower Medicare Part B Premiums

ACA reforms are making Medicare more efficient and reducing overall health care costs, which has helped contain the cost of Part B premiums for most people. In 2016, the Medicare Part B premium is $104.90 and the Part B annual deductible is $166. The premium is $121.80 (or higher depending on your income) for individuals who enroll in Part B for the first time in 2016, don’t get Social Security benefits or are directly billed for Part B premiums.

Improvements for Medicare Advantage Plan Members

Private Medicare Advantage (MA) plans are getting stronger and less expensive. From 2010-2015, the average MA premium has declined by approximately 6 percent and enrollment has increased by 40 percent.

• Since 2014, the ACA provides additional protections for MA plan members by limiting the amount these plans spend on administrative costs, insurance company profits, and items other than health care, to 15 percent of their Medicare payments.
• MA plans also can no longer charge enrollees more than traditional Medicare for chemotherapy administration, skilled nursing home care and other specialized services.

Medicare Fraud, Waste and Abuse

• The ACA includes new resources and tools to protect taxpayer dollars by preventing fraud in Medicare and Medicaid by building on the efforts of the Department of Health and Human Services and the Justice Department. Over the past three years, the government recovered over $10.7 billion from individuals and companies seeking fraudulent payments. There are also tougher penalties for people who steal from Medicare and more law enforcement to identify criminals abusing the law and beneficiaries.

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 coordinating 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 of which are intended to provider higher-quality, coordinated care for beneficiaries.

Helping Americans of All Ages

The ACA helps seniors and Americans of all ages. The law stops insurance companies from denying coverage to children with pre-existing conditions, prohibits insurance companies from taking away coverage when someone needs services, eliminates lifetime limits on insurance coverage, allows young adults to stay on their parents’ plan until they turn 26, and provides assistance to employers to help them continue providing retiree health insurance benefits. In 2014, the following ACA benefits went into effect:.

• 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. This applies to 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 ($15,654 for an individual in 2016) 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 ($15,521-$23,540 for an individual in 2016) who would otherwise be eligible to receive premium subsidies in the exchange.