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Obamacare and Medicare

October 6, 2016

Obamacare, also known as the Affordable Care Act or ACA, is a health-care reform act that was signed into law on March 23, 2010.  Some of the key features of Obamacare include, but are not limited to:

  • Ends pre-existing condition exclusions
  • Permits many young adults under age 26 to continue coverage under their parent’s health plan
  • Ends lifetime limits on most benefits
  • Provides increased coverage for preventive care services
  • Guarantees your right to request a reconsideration (appeal) a decision a plan makes to deny coverage

In fact, several of the changes included in the law may improve how you receive coverage and how much treatment you receive. Certain features of Obamacare apply directly to the Medicare program, including the following:

  • Your Medicare coverage is protected.Obamacare does not replace Medicare. Because Medicare is not a part of the Health Insurance Marketplace created by the Affordable Care Act, you do not have to change how you receive your Medicare benefits. You may choose to have Original Medicare Part A (hospital insurance) and Part B (medical insurance) or you may receive your Medicare benefits by enrolling in a Medicare Advantage plan offered by private insurance companies contracted with Medicare.  A potential point of confusion is that Medicare’s Annual Election Period (the time when Medicare beneficiaries can enroll in Medicare Advantage plans and stand-alone Medicare Part D Prescription Drug Plans) overlaps with the Health Insurance Marketplace’s annual Open Enrollment Period. You don’t have to take any action with regard to the Health Insurance Marketplace if you have Original Medicare (Part A and Part B) or if you are enrolled in a Medicare Advantage plan, with or without prescription drug coverage (Medicare Part C).

However, you don’t have to enroll in Medicare if you prefer other options. Just remember that it’s illegal for an insurer to sell you a plan on the Marketplace when you already have Medicare. If you want to purchase a plan through the Marketplace, then you’ll need to disenroll from Medicare.

  • You receive more preventive services at lower costs. Under the Affordable Care Act, Medicare Part B and Medicare Advantage plans must cover preventive care, which means that you can receive yearly screenings for conditions like breast cancer or colon cancer at no out-of-pocket cost. Beneficiaries are also eligible to receive an annual “Wellness” visit at no out-of-pocket cost.
  • You may save more money on prescription drugs. Obamacare increased discounts in the prescription drug coverage gap, also known as the donut hole, in an effort to close this gap by 2020.  In 2017, Medicare provides a 60% discount on brand-name prescription drugs and a 49% discount on generic drugs during the Part D prescription drug coverage gap.  This means that if you reach the prescription drug coverage gap (that is if you spend $4,950 during the benefit year for prescription drugs), you pay 40% out-of-pocket for brand-name prescription drugs and 51% for generic drugs (which are usually priced significantly lower than their brand-name counterparts).
  • Your doctors will be better supported. The Affordable Care Act provides many incentives to doctors for accepting Medicare and may provide access to better resources for your care. These resources will ensure that you receive consistent treatments.
  • The Affordable Care Act strengthens the Medicare program. As a result of Obamacare, the Medicare Trust Fund will be extended by at least 12 years, to 2029. This comes as a result of efforts to reduce fraud, waste, and abuse within the Medicare program.

Effects on Medicare Advantage plans

Medicare Advantage plans, offered by Medicare-approved private insurance companies across the nation, may be affected in a variety of ways by Obamacare. The Affordable Care Act seeks to reward private insurance companies that offer the highest quality care. These plans top the CMS Five-Star Rating system, which ranks plans based on a variety of factors related to quality of care and service.

Effects on Medicare Supplement plans

Medicare Supplement plans are offered by private insurance companies and can help you pay out-of-pocket costs for services covered under Medicare Part A and Part B. The Affordable Care Act does not affect the underwriting process for Medicare Supplement plans. If a beneficiary enrolls outside of the Medicare Supplement Open Enrollment Period (a six-month period beginning on the first day of the month an individual attains age 65 (or older) and is enrolled in Medicare Part A and Part B), a private insurance company can use medical underwriting to assess those who enroll. These rules do not change as a result of Obamacare.

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