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Summary: If you’re enrolled in Medicare or nearing Medicare eligibility, you may have questions about Medicare and the Affordable Care Act (ACA, also called Obamacare). Here’s what you need to know about Medicare and Obamacare.
How does Obamacare work?
The Patient Protection and Affordable Care Act is the official name for the nicknamed health reform “Obamacare”.
Obamacare is not a health insurance plan, but rather an act that reformed elements of health care in America. The act:
- Laid out coverage requirements for health insurance plans,
- Created premium subsidies to help people afford coverage,
- Expanded the eligibility for state Medicaid programs, and
- Added benefits to the Medicare program.
People without Medicare or employer health insurance can buy Obamacare-compliant policies through public insurance exchanges. Unlike Medicare, which is a government health insurance program, plans sold on the Obamacare exchanges are private policies offered by individual insurance companies. When you apply for a plan on the health exchange, you may qualify for a premium subsidy to offset the cost of your insurance.
How does Medicare work with Obamacare?
The Obamacare law affects you minimally if you’re enrolled in Original Medicare (Part A and Part B), except you now have some additional benefits. For example, the Affordable Care Act added free preventive care for things such as cancer screenings and wellness checks. You now get one wellness visit with your doctor or other health care provider each year where you don’t have to meet your Part B deductible or pay Part B coinsurance. Before Obamacare, you may have had a coinsurance for a yearly wellness visit.
Obamacare also added discounts for prescription medications once you reach the “donut hole” if you have Part D coverage for prescription drugs.
When you compare Obamacare (ACA) plan costs with Medicare costs, it might make you grateful you’re on Medicare. Take a look at the average premiums in this eHealth report from 2018. The ACA data below is based on average premiums for people aged 63-64.
Source: Premiums and Out-of-Pocket Costs Before and After Medicare (eHealth, 2018)
How does Obamacare work with Medicare Advantage?
Medicare Advantage is offered by private insurance companies contracted with Medicare; it’s just another way to get your Medicare Part A and Part B benefits.
Obamacare affects your Medicare Advantage plan in the way that your plan will now also cover more preventive care and wellness visits at no cost to you.
Medicare preventive care you might not pay for may include:
- Bone density measurements
- Cardiovascular disease screening
- Depression screen
- Diabetes screening
- Flu shots
- Tabaco use cessation counseling
- Glaucoma tests
- And more
At a minimum, Medicare Advantage plans must give you the same coverage as Original Medicare, although many offer extra benefits such as prescription drug coverage, routine vision and dental care.
When benefits under Original Medicare expand, your benefits under Medicare Advantage will also expand. You don’t lose any benefits by choosing a Medicare Advantage plan.
How does Obamacare work if I only have Part A or Part B?
Obamacare originally required every taxpayer to have qualifying health insurance or face a fine. Under the Obamacare law, Medicare Part A meets the requirements for qualifying coverage. However, Medicare Part B on its own does not meet the requirements for qualifying health insurance.
Prior to the 2019 plan year, you would have to pay a fine, along with your income tax return, if you didn’t have qualifying health coverage. The Tax Cuts and Jobs Act of 2017 repealed the fines, so you no longer owe a penalty if you don’t have Part A.
How does Medicare work if I want an Obamacare plan?
You don’t have to enroll in Medicare when you first become eligible, although most people do to avoid a late-enrollment penalty. Unless you have qualifying health insurance through an employer or union plan, you should enroll in Medicare when you are first eligible to avoid the penalty. Having an Obamacare plan will generally not help you avoid the Medicare penalty.
Can I have both Medicare and an Obamacare plan?
It’s actually against the law for someone to sell you an Obamacare plan if you are enrolled in Medicare.
If you want to supplement your benefits under Original Medicare, you could check out the Medicare Advantage plans available in your area or Medicare Supplement insurance plans. Many Medicare Advantage plans include Part D prescription drug coverage, as well as benefits to help pay for routine vision, dental, and hearing services. Medicare Advantage plans work more like employer health plans. Your inpatient hospital benefits and outpatient coverage, as well as prescription drug coverage in many cases, are all rolled into one plan. Unlike Original Medicare, most Medicare Advantage plans have just one annual deductible instead of separate deductibles for Part A and Part B.
You could also consider a Medicare Supplement Insurance (Medigap) Plan if you are worried about your out-of-pocket costs under Part A and Part B. Medicare Supplement insurance plans pay some or all of your Part A and Part B deductibles, copayments, and coinsurance amounts. You pay a separate monthly premium for Medigap plans, but if you use a lot of health care services each year, it may be worth it to keep your out-of-pocket costs low.
Will Obamacare or Trumpcare ever cut my Medicare benefits?
You may be concerned about how politics affects your health care coverage if you have Medicare.
If you live to be 100, you could be eligible for Medicare for 35 years. It might be reassuring to know that Medicare funding comes from two Medicare trust funds held by the U.S. Treasury which can only be used for Medicare. This means that regardless who the president is, Medicare funding cannot be used for other political priorities.
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