It’s Your 65th Birthday: The ACA and Medicare
What is Medicare?
Medicare is the government health insurance for:
- people who are 65 or older,
- younger people with certain disabilities, and
- people with kidney failure who need dialysis or a kidney transplant.
Medicare has four different parts. The different parts of Medicare help cover certain services.
The Four Categories of Insurance
|Medicare Part A
|Medicare Part B
- Covers certain doctor’s services,
ambulatory care, medical supplies, and preventive services.
|Medicare Part C
(Medicare Advantage Plan)
- The Medicare Advantage Plan is Medicare offered by
a private insurance company. The private company provides all Medicare
benefits except hospice care.
Some Medicare Advantage Plans have extra benefits (such as eyeglass coverage). Whether or not you get these extra benefits depends on which private company is in charge of your Medicare Advantage Plan. You cannot use supplemental insurance while on the Medicare Advantage Plan. However, the extra benefits are like supplemental insurance. The private insurance company is able to change the extra benefits it offers.
|Medicare Part D
(Prescription Drug Coverage)
How Do I Know What Type of Medicare I Have?
To find out what type of Medicare you have, you can:
- Check your red, white, and blue Medicare card.
- Check your Medicare enrollment plan online: https://www.mymedicare.gov/.
- Call 1-800-MEDICARE (1-800-633-4227).
How Will the Affordable Care Act Affect Me?
The Affordable Care Act (ACA) will not cut any of your
benefits. For many people, the ACA will allow Medicare to cover more costs, offer more services, and improve quality of care.
If I Already Have Medicare, Do I Have to Do Anything?
If you already have Medicare, you don’t have to do anything. You are considered covered, so you do not have to pay any taxes.
Can I Get a Plan from the Marketplace Instead of Having Medicare?
If you are already enrolled in Medicare, you cannot change your insurance and get a new plan through the
Health Insurance Marketplace. You also cannot get additional insurance through the Marketplace. It is against the law for someone to sell you a plan from the Marketplace if they know you have Medicare.
However, if you qualify for Medicare but are not yet enrolled in it, you can get insurance through the Marketplace.
Do I Have to Pay More for My Medicare?
Until 2019, seniors who make more than $85,000 (or more than $170,000 for couples) will pay more for Medicare. This will only affect about 5% of seniors. If you make $85,000 or less (or $170,000 or less for couples), you will continue to pay the standard amount for Medicare. The standard Medicare amount was $104.90 per month in 2013.
If your income increases to over $85,000 between now and 2019, you will have to pay more for Medicare. In 2020, the income limits will be increased for
What is the Donut Hole?
The donut hole is sometimes also called the “coverage gap.” It refers to Part D Medicare and prescription drugs.
You fall into the donut hole when the amount that you and Medicare have paid for your drugs reaches a certain dollar limit since the start of the calendar year. In 2013, this limit is $2,970. People who need a lot of prescription drugs (such as people with Alzheimer’s disease or people who take medicine for diabetes) often fall into the donut hole.
Before the ACA, most people had to pay for their medication without any help while they were in the donut hole. People only got out of the donut hole when the amount they paid for their medication reached a certain limit during a calendar year. In 2013, this limit was $4,750. When you reached this limit, you qualified for
Catastrophic Coverage. Once you had Catastrophic Coverage, your medication was covered again. You only had to pay
coinsurance or a
The ACA is gradually closing this donut hole. Since 2011, people in the donut hole receive discounts on prescription drugs to help pay for their medication. These discounts will gradually increase each year until 2020. In 2013, there was a 52.5% discount on covered brand-name drugs, and a 21% discount on covered generic drugs. To see the schedule of discounts for prescription drugs while in the donut hole, go to: https://www.medicare.gov/Pubs/pdf/11493.pdf
In 2020, the donut hole will be closed completely. At that point, you will pay no more than 25% of the cost of your drugs at any point during the year in which you have reached your
Extra Help is a federal program that helps people with low incomes pay the costs of Medicare drug coverage. People with Extra Help will not have a donut hole.
How Does the Affordable Care Act Affect Medicare?
The Affordable Care Act makes many changes to Medicare. Some of the key changes to Medicare are below:
- Free annual wellness visits
During the first year you have Medicare, you can sign up for a free “Welcome to Medicare” visit. During this visit, you and your doctor will develop a plan to prevent disease and help you stay healthy. After your first year with Medicare, you can have a yearly wellness visit. This visit includes a review of your medical history, preventive tests and screenings, and planning for a healthy future. This visit is free for people with Original Medicare and to most people with Medicare Advantage Plans.
- Certain preventive services are free
Under the ACA, several preventive services are covered by Original Medicare without Part B deductibles or copays if you receive the services from a provider who accepts Medicare. These services include diabetes screenings, mammograms, bone mass measurements, and prostate cancer screenings. For more information about these services, go to: http://www.medicare.gov/Publications/Pubs/pdf/10110.pdf
If you have a Medicare Advantage Plan, check with your plan to see if these benefits also apply to you.
- Medicare Advantage Plans members will have additional protections
Since 2011, Medicare Advantage Plans are not allowed to have higher
cost-sharing requirements than Original Medicare for various treatments and services (renal dialysis, chemotherapy, skilled nursing care, and other services). Also, starting in 2014, Medicare Advantage Plans will have federally set limits on the amount they can spend on administrative expenses, insurance company profits, and things other than health care. This will help make sure that your money is going to medical services.
- Medicare Advantage Plans will be paid less
Medicare pays a set amount of money to private insurance companies for Medicare Advantage Plan members. Currently, Medicare pays about $1,000 more per year for Medicare Advantage members than it does for Original Medicare members. Under the ACA, Medicare will slowly decrease the amount it pays to private insurance companies for the Medicare Advantage Plan. By 2017, Medicare will pay the same for everyone.
If you have a Medicare Advantage Plan, none of your guaranteed Medicare benefits will be cut. You will still have all of your government promised health benefits. However, Medicare Advantage Plans that have extra benefits (like eyeglass coverage) may be cut.
- Medicare will pay bonuses to providers who work in medically underserved areas
Some seniors have trouble getting care because there are not enough doctors in their community. To encourage more doctors to work in these areas, Medicare will pay them a 10% bonus for the first five years of the ACA.
- Medicare Trust Fund is extended to at least 2029
Medicare gets money from a trust fund called the
Medicare Trust Fund. Before the ACA, the money in the Medicare Trust Fund was decreasing quickly. The ACA includes changes that help to save money. This gives the Medicare Trust Fund enough money until at least 2029.
- Medicare will reward high quality of care
Beginning in 2013, Medicare rewards hospitals for giving good quality care through extra payments. This program is called the
Hospital Value-Based Purchasing Program. These extra payments are based on how well the hospitals do on certain tasks, or how much the hospitals improve on certain tasks. For more information about this program, go to: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/index.html?redirect=/hospitalqualityinits
- Accountable Care Organizations are established
Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers who come together to provide care to people with Medicare. The goal is to make sure that people get good care without mistakes or unnecessary services. To find out more about ACOs, click
- The Center for Medicare and Medicaid Innovation was created
The ACA created the Center for Medicare and Medicaid Innovation to help improve how medical services are provided and paid for. The center works with other organizations to make health care better and more efficient. For more information, go to:
- The Independent Payment Advisory Board was created
The ACA created the Independent Payment Advisory Board. The Board makes recommendations about how Medicare can save money. The Board’s suggestions for saving money must be about better ways to pay providers. The Board cannot make recommendations that change your benefits, affect how much you pay out-of-pocket, change how you qualify for Medicare, or that affect your care. This Board was not funded for 2016.
Where Can I Find More Information?
The federal government has created a short site about how the Affordable Care Act affects Medicare:
Medicare’s site about how the ACA affects it:
A good summary of how the ACA affects Medicare by the AARP:
A great educational brochure created by the Health Foundation of Greater Cincinnati: