This is intended as a quick and simple explanation as well as a basic reference for how the Affordable Care Act has changed health insurance, particularly that for those eligible and enrolled in Medicare. If you need a quick review of how Medicare works overall, it is recommended that you read Medicare Overview before moving forward.
Table of Contents
- Obamacare and Medicare
- Obamacare Reforms Medicare
- ACA: Investing in Innovation and Primary Care
- Medicare and the Donut Hole
- Medicare Improved by Obamacare
- Medicare Overview
- Medicare enrollment
- Obamacare Myths
- Obamacare and Seniors
- Longer Term Care
America’s senior citizens acquired meaningful long term care and healthcare services in 1966 when Medicare was established. This is important, as a majority of seniors prior to this year were vulnerable to fluctuating healthcare costs. Thanks to Medicare, as of 2015 over fifty-five million people were enrolled.
Medicare offers help to low income seniors and has become the largest long-term care services payer in the United States. The past 47 years have seen Congress build upon the security foundation offered by Medicare as well as Medicaid. Such efforts have culminated in the Patient Protection and Affordable Care Act, colloquially known as Obamacare, which can be considered one of the most polarizing issues of our time.
Republicans regularly propose bills, budget resolutions and other reforms which, if implemented, could seriously limit Medicare in its current form. It is the opinion of the Republican majority that it is not possible for the US government to maintain the system due to the dire fiscal situation that this country is currently battling. The Republican proposals will close the doors to both Medicaid and Medicare in their present form. Many republican models claim to focus on patient centered coverage, which may be true but also shifts the costs from the government to the senior citizens themselves; and also to their families. Consequently, additional reforms must be included to help find an equilibrium between coverage and affordability.
A different, usually more socialized, proposal is taken by the Democrats. Many on the left would consider the implementation of the ACA as a huge win for the Democratic Party. Looking at Medicare under the ACA, many democrats argue that costs will not be shifted and delegated to patients, and overall expenses will be reduced by lowering the costs of prescription drugs and through the elimination of waste and fraud. Additionally, care will be delivered more efficiently to patients and benefits will not be cut. Democrats argue that the ACA, or Obamacare, actually strengthens Medicare.
Unfortunately, the Obamacare debate has taken in a lot of misinformation. There is no dearth of myths concerning the ACA and this book is designed to disclose the truth.
Obamacare and Medicare
First, two important statements to consider:
- Obamacare is essentially expanded and reformed Medicare.
- Obamacare: not a substitute for Medicare
Although regulations under the ACA make a few changes to Medicare, Obamacare is not a replacement for Medicare. Obamacare is for individuals and families under 65 years old and for people who do not have access to Medicare, Medicaid, Tri-Care, affordable employer provided coverage or any other type of affordable qualified coverage. Medicare is for people over 65 years old and for those who qualify due to a major disability.
Minimum Essential Coverage
This mainly applies to health plans for people under 65. In other words, if you have Medicare you most likely do not need to worry about minimum essential coverage. If you possess, at the very least, Medicare part A, then you will be considered to enjoy “minimum essential coverage”. There is no need to pay a fee for not having health insurance.
Having a Part D or Medigap insurance does not affect your insurance under the ACA. Both of them require you to have Medicare Part A – therefore you will meet (and surpass) the minimum essential coverage mandate.
Additional Marketplace Plan
It is illegal to sell a marketplace plan to you if you qualify for Medicare. You may, however, look at additional coverage through Medicare Advantage Plans.
Obamacare Reforms Medicare
The ACA helps plug the “donut hole” that leads to seniors being unable to afford prescriptions. Post Obamacare, in 2011 seniors enjoyed a 50 percent discount when purchasing brand name drugs, and significantly less for generic Part D drugs, in the donut hole. The reform enhances coverage every passing year, plugging the donut hole; which is scheduled to disappear by 2020. Seniors will pay a standard drug co-pays after that.
Obamacare increases seniors’ existing coverage, including wellness and preventive care visits, before requiring them to pay deductibles or co-insurance. No longer will seniors need to put off preventive checkups and care due to expenses.
Additional resources for doctors and new initiatives for care coordination support have also been undertaken. These will help ensure consistent treatment for patients as well as optimize the overall level of care.
It must be emphatically stated that Obamacare is not responsible for slashing any benefits accrued from Medicare Advantage either. The ACA reduces the payments given to Medicare Advantage, leaving the coverage untouched. In turn, it rewards providers who have higher quality coverage.
ACA: Investing in Innovation and Primary Care
Multiple provisions of the Affordable Care Act (ACA) have potential to improve both physicians’ and patients’ experiences. It also decreases the cost of care over time. The ACA increases the Medicaid and Medicare payments temporarily and fosters innovative practices in the delivery of healthcare services. It also increases the support given to primary care providers. Obamacare also invests in continued development of the primary care workforce.
Two provisions in the ACA increase payments to primary care clinics. One offers a bonus to those participating in Medicare. The second increases the financial incentive for primary clinics to offer care for Medicaid beneficiaries. The aim of such financial incentives is both the expansion and the stabilization of the existing primary care workforce.
Investing in primary care will increase office efficiency, patients’ experiences, patients’’ overall health, and overall spending on both patients’ and healthcare in general. In doing this, the ACA strives to reduce disparity and promote all around greater access to quality care.
Primary care clinics opting to participate in Medicare will gain eligibility for a payment bonus of 10 percent. This bonus targets particular billing codes in primary care services, such as for home visits, office visits and nursing facility visits. Physicians, clinical nurse specialists, physician assistants and nurse practitioners will all benefit from this bonus Additionally, the bonus will be offered for five years to practitioners who provide important surgical procedures in areas suffering from paucity of healthcare professionals.
Medicare and the Donut Hole
A majority of Medicare Prescription Drug Plans suffer from a coverage gap or “donut hole”. This is a temporary restriction on what their plan covers for medication.
The donut hole may not be an issue for most people, particularly healthier individuals. The donut hole starts once the patient and the company have met a pre-set amount of money to be spent on covered medications. In 2015, you were in the coverage gap if you, inclusive with the amount your plan has also paid, had spent $2,960 buying covered drugs. This equals the total amount in addition to your deductible. In 2016, you are in the donut hole if you spend $3,310. The amount will vary every year. Individuals with Medicare are eligible for extra help in paying for medication through Medicare Part D. Having an additional drug plan is the best way to avoid any coverage gap.
Medicare Improved by Obamacare
After four years of healthcare reform, many would say that it is clear the ACA has delivered on its promises. Conversely, many on both sides of the aisle would argue that it has fallen short in many aspects. It seems in regards to Medicare the ACA has done quite well to help provide better care for an aging population. This is apparent from the glowing 2014 report published by the Boards of Trustees administering the Medicare program. Here are some highlights of the roughly 165 provisions in the ACA that affect Medicare:
- The trust fund of Medicare is extended for 13 years, until 2030, under ACA
- Laws have the necessary provisions to reduce fraud and waste, strengthen the necessary benefits and also promote the value centric payments. The laws function to prevent admissions and reduce hospital spends. All these goes a long way to extend the trust fund life as overall spending gets lowered.
- Projected premiums for Part B in 2015 were not scheduled to increase for the second consecutive time.
- Decreased growth of per capita cost
- Medicare spending has declined noticeably compared to pre-ACA days.
- About $10 billion will have been saved by seniors due to slow closing of Part D coverage related “donut hole”
- Efforts like Partnership for Patients have resulted in avoiding a large number of deaths and patient harms spread over 2013 and 2014. This was made possible due to partnerships inked between HHS and the hospitals, nurses, doctors and many others. It exhibits how money can be saved while patients experience a better outcome.
- Efforts towards patient’s safety along with new payment incentives geared towards hospitals have resulted in avoiding a large number of patient readmission. These have led to better patient outcomes. Medicare also saves money.
A large number of Accountable Care Organizations were started during 2012, 2013 and 2014. They offered care for about five million Medicare beneficiaries. Such organizations are deemed accountable for the cost of care and the quality they offer.
There’s no denying that Medicare can be a bit confusing to navigate, and the addition of Medicare Advantage presented an entirely new set of options and, in some cases, challenges for those that qualify for Medicare coverage and are seeking the most suitable options. The original Medicare program was developed in 1966 as a means of providing federal health insurance for those over the age of 65 (as well as certain younger people that meet qualifying circumstances). The idea was to provide affordable healthcare for a traditionally underserved group. Then, in 1995, Medicare Advantage was launched as an expansion of the original Medicare program with the idea of providing further options for those eligible for Medicare.
Medicare is characterized with a lot of letters: A, B, C, D and so on. These are the parts of Medicare that to choose from. Traditional Medicare, which most people will automatically be enrolled in when they first join the Medicare program, includes parts A and B for healthcare services, with the option to add part D for a stand-alone drug plan. Medicare Advantage is comprised of part C, which is an addition to or a supplement for parts A and B.
Original Medicare, including parts A and B, includes coverage for medical and hospital costs up to a certain amount. Rates for coverage and services are standardized so that patients pay virtually the same amount no matter where they live and doctors and hospitals nationwide accept their coverage. Medicare Advantage expands on this plan with part C. Private insurance companies provide Part C coverage (although it is regulated by the federal government). It utilizes HMO and PPO plans as a substitute for standard Medicare parts A and B as a means of lowering out-of-pocket expenses through local or regional services. For patients this could mean greater access to services at lower costs, and it more closely mirrors traditional health insurance policies (as opposed to the services provided by Medicare parts A and B).
What does this mean for patients? Those that elect to enhance coverage with a Medicare Advantage plan may gain access to coverage for dental, vision, hearing, and drug plans as part of their policy, although it depends on the plan selected. There is also a cap for out-of-pocket spending, and if it is reached, many services will be covered at 100%. Medicare Advantage plans may also extend beyond U.S. borders. Whereas Medicare is accepted nationwide, it generally does not include coverage for medical care received outside the U.S.
The major benefit of choosing a Medicare Advantage plan is to switch to a system of copays instead of co-insurance (in addition to plan premiums). Whereas original Medicare requires patients to pay a set percentage of all costs (say, 20% of all medical visits, services, and so on), Medicare Advantage requires only a fixed copay for visits and services, so the out-of-pocket cost never changes. The major drawback of Medicare Advantage is that a fixed network of doctors and facilities approved by the network must be used, whereas original Medicare allows access to any healthcare provider or facility that accepts Medicare.
Medicare open enrollment refers to the time when it is possible for you to enroll into Medicare. The Medicare Parts (A, B, C and D) and also Medigap have varying dates of enrollment.
If you miss your initial enrollment period, you could end up paying extra and this is why you are able to setup your Medicare policy 6 months in advance of your 65th birthday through 7 months after your birthday. When you get Medicare Parts A and B, you will automatically qualify for Parts C and D. You will also automatically qualify for Medigap.
General enrollment is once a year from January 1st through March 31st. Upon your initial enrollment you may be able to sign up for a Part C or Part D plan. If you forget to sign up for a Part C or D plan during your initial enrollment, or if you do sign up and want to change to a different Part C or D plan, you can do so once a year between October 15th and December 7th.
You can acquire a Medigap policy anytime during its six month open enrollment period. It starts from the month when you reach 65 years of age. You should also be enrolled in the Medicare Part B. In case you miss for some reason the enrollment window, insurers may not permit you to join Medigap.
It is time to set the record straight about how the Affordable Care Act functions and how it affects the Medicare beneficiaries. Even after five long years, the ACA continues to remain a mystery to a significant proportion of the American population. Obamacare was made into a law in 2010.
There are a few popular myths surrounding Obamacare and Medicare.
Myth # 1: Medicare is coming to an end
False. Medicare is not being substituted by Obamacare. In fact, it is being strengthened in many ways. The guaranteed benefits of Medicare are protected in a number of ways that are much more robust than before.
Myth # 2: Seniors already on Medicare must purchase additional health insurance to comply with the ACA
False. This claim generates from the opacity of understanding concerning the individual mandate-an important provision of ACA. It compels individuals who are presently uninsured to purchase coverage or to pay penalties. Medicare is a kind of health insurance, and there is no requirement for beneficiaries to purchase anything during the ACA open enrollment period.
Myth # 3: Beneficiaries of Medicare must pay extra for medications under ACA
True, however…As per the ACA, Medicare beneficiaries enjoying higher incomes – earning in excess of $85,000 per person or $170,000 per couple – pay a little higher for Medicare Part D or prescription drug coverage. This, however, affects only five percent of the beneficiaries. The majority of seniors will actually see drug costs declining as the ACA closes the coverage gap.
Obamacare and Seniors
Obamacare has made notable improvements to Medicare. It has added a number of benefits and bolstered its financial position. The ACA has also imported a number of previously unavailable health benefits:
Free Preventive Services
Problems can be caught during their early stages if the individual is regularly checked and screened for ailments. Illnesses can be tamed by administering vaccines. However, coinsurance and deductibles have kept a large proportion of seniors reliant on Medicare to take advantage of such services. This scenario has changed under Obamacare. Since January 2011, seniors already enrolled in Medicare can get a comprehensive range of screenings and preventive services at extremely affordable costs or no cost.
Free Health Exams
The ACA offers a yearly health examination for seniors. They can interact with their physician and create personalized prevention plans to improve health. About two million seniors and disabled individuals on Medicare have taken advantage of this priceless benefit.
Multiple Medications Management
According to the American Society of Consultant Pharmacists, persons aged between 65 and 69 years take on average about 14 prescriptions every year. For Americans in their 80s, it increases to 18 prescriptions. Consuming multiple medications is expensive, time consuming and could lead to adverse reactions caused by mixing drugs. Under the Part D Obamacare plan, all schemes must provide therapy management services with the aim of properly managing prescriptions.
Assisting Low Income Seniors
Medicare and Medicaid cover about nine million seniors and disabled persons. Obamacare offers additional assistance like eliminating the cost sharing of Prescription Drug or Part D for those persons receiving community or home-based care. Seniors with lower incomes suffering from multiple chronic conditions get assistance via health homes created to help coordinate care. Additional longer term options for care will also be available to assist them to stay in homes.
Longer Term Care
For a majority of seniors, Medicare does not cover their longer term care. This is a significant problem for many relying on Long Term Services and Supports (LTSS) for their survival.
Paying for quality care can be a crushing financial burden and caretakers understand that it is no less than a full time job. The ACA seeks to relax this particular financial weight by the creation of more LTSS programs.
Long term care can be described as a variety of supports and services which a person requires to meet their own needs. Majority of longer term care is actually not medical care, but assistance with simple personal tasks, termed Activities of Daily Living or ADLs. Some common examples:
- Use of bathroom
- Getting out of bed
There can be other common longer term care supports and services in the home itself. They assist with the everyday tasks, and are termed Instrumental Activities of Daily Living (IADLs)
- Shopping for clothes and groceries
- Pet care
- Money management
- Preparing meals
- Communication, like computer and telephone
- Emergency response
Every Medicaid program must choose any one among a number of LTSS programs like MFP (Money Follows the Person), option for Health Home State Plan, financial alignment demonstration in case of dual eligible beneficiaries, BIP (Balancing Incentive Program), CFO (Community First Option) and the HCBS (Home and Community Based Services) State Plan option.
The Affordable Care Act or Obamacare has brought in a number of positive changes like free preventive services, wellness exams and medication therapy management. Personalized prevention plans embedded within the program only add to its efficiency. Lower costs are achieved via cheaper drugs. The coverage “donut hole” is eliminated along with the excess payments made to Medicare Advantage plans created by the private sector. Abuse and fraud of such programs are eliminated as well.
Quality is also improved under the ACA by offering quality related bonuses to the hospitals and doctors who have improved the standard of their services. Hospital acquired infections are prevented. Care is coordinated to improve the overall care of the patient. Obamacare also gives increased access to doctors and other health care providers. It offers bonus payments to general surgeons, primary care doctors and geriatricians. Additionally, there are new scholarship and loan options available to doctors and nurses nationwide.
Finally, it can be argued that patient safety is increased under the ACA. Seniors are protected against abuse by the newly inked Elder Justice grants. Obamacare has also stated that all home care and nursing care workers must be subjected to the requisite checks to ferret out criminal antecedents, if such exists. Compulsory training is imparted to improve the care of patients suffering from dementia, so that there will be no abuse of the patient. Obamacare also provided a number of other longer term options in care, like new options for community and home centric care. It also provided additional information to help the selection of quality nursing homes.
The patient protection and affordable care act (ACA/Obamacare) has most certainly jolted the healthcare industry; and even government programs like Medicare experienced some of the most drastic changes made in decades. For the most part, the ACA has strengthened Medicare and increased the availability and quality of coverage for senior citizens.
- Abrams, M. K. (2011, January 4). How Will the Affordable Care Act Bolster Primary Care? Retrieved from The Commonwealth Fund: http://www.commonwealthfund.org/publications/blog/2011/jan/affordable-care-act-bolsters-primary-care
- Assistant Secretary for Public Affairs. (2015, March 23). Creating Health Care Jobs by Addressing Primary Care Workforce Needs. Retrieved from HHS.gov: http://www.hhs.gov/healthcare/facts-and-features/fact-sheets/creating-health-care-jobs-by-addressing-primary-care-workforce-needs/index.html
- GOP.gov. (2015, March 26). Legislative Digests. Retrieved from House Republicans: http://www.gop.gov/bill/h-r-2-medicare-access-and-chip-reauthorization-act-of-2015/
- RepublicanViews.org. (2014, November 25). Republican Views on Health Care. Retrieved from Republican Views on the Issues: http://www.republicanviews.org/republican-views-on-health-care/