ObamaCare: Medicare

One question that we’ve been getting asked a lot lately is, “How is ObamaCare going to affect me?”  Well, there are many ways in which Obama will affect you (e.g. national economy, taxes, etc), but we know that you are referring to your health insurance coverage.  The answer to that question depends largely on how you obtain your health insurance; whether through Medicare, a private individual policy, or through group coverage.  We will deal with the last two situations in another article, but here we want to answer the question as it pertains to people on Medicare.

The short answer is, ObamaCare’s full implementation in 2014 will not affect you at all.  Here’s the longer answer.

When the Patient Protection and Affordable Care Act, known as the Affordable Care Act or ObamaCare, was passed in 2010, there were three major items that affected Medicare.  First, there was a provision to reduce the donut hole coverage gap on Prescription Drug Plans.  Second, there was an increase in the number of preventative services that Medicare offers.  Third, there was a reduction in payments to Medicare Advantage Plans. 

• Donut Hole.  Prescription Drug Plans provide coverage to help pay the costs of prescription drugs.  Under the old plan design, these plans assisted with prescription costs until your annual medication expenses reached a certain level ($2,830 in 2010).  At that point, you would begin to pay 100% of the cost of your medications.  The Affordable Care Act implemented a gradual phase-out of the donut hole that will be complete by 2020.  For a chart detailing this phase-out, click here.
• Preventative Services.  Medicare has always offered preventative services.  Under the Affordable Care Act, these services were expanded to include new services, as well as providing many of these services at no cost.  For a full list of the preventative services that Medicare now offers, click here.
• Medicare Advantage Plans.  The easiest way to describe a Medicare Advantage Plan is to think of it as a farming out of the administration of health benefits by Medicare to a third-party-administrator.  Private insurance companies are paid a fee by Medicare for each member they enroll to provide their health benefits.  Under the Affordable Care Act, these fees were reduced.  The effect of this has been increased premiums and reduced benefits to members of Medicare Advantage Plans.  Additionally, some plans were unable to adjust to the reduced fee schedule and canceled their contracts with Medicare thus terminating their members health benefits.

As you can see, these changes to Medicare are not insignificant.  However, they have all been in effect since 2010.  In the Medicare world, we’ve been living under the effects of ObamaCare since 2010.  Therefore if you are a Medicare recipient, there will  be no noticeable change in January 2014.  If you have further questions about this, please feel free to call or email us anytime.