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The Affordable Care Act: Impacts for Seniors

If you are a senior who currently receives Medicare coverage, then you are in compliance with the Affordable Care Act and don’t need to replace your coverage with a new plan, explained Leacey Brown, SDSU Extension Gerontology Field Specialist.

“No matter how you get Medicare, you’ll still have the same benefits and security you have now. If you have Medicare, you’re considered covered,” Brown said.

She added that there will be a few changes made by the Affordable Care Act (ACA) that will impact Medicare beneficiaries, including;

*           Prescription drug costs.

*           Preventive services costs.

*           Medicare fraud, waste, and abuse prevention.

Reduce prescription drug costs

“The first change the ACA has for Medicare beneficiaries is to reduce the cost of prescription drugs,” Brown said.

Brown explained that this change was motivated by the “doughnut hole.”

The “doughnut hole” refers to the Medicare Part D coverage gap. Once a beneficiary and a Medicare Part D provider spends a set amount of dollars on prescription drugs ($2,850 in 2014), the beneficiary must pay for their prescription medications out of pocket.

Once the beneficiary pays $4,550 out-of-pocket for covered drugs, including those expenses prior to entering the doughnut hole, a person enters catastrophic coverage. At this point, a person will either pay a 5 percent coinsurance or a copay of $2.55 for covered generic drugs and $6.35 for covered brand-name drugs (beneficiary pays the greater of the two).

“More than 7.3 million seniors and people with disabilities reached the doughnut hole since 2010. The goal of the ACA is to close the doughnut hole by 2020,” Brown said.

The plan developed to achieve this goal was initiated in 2010. In that year, people who entered the doughnut hole received a $250 rebate. In 2011, beneficiaries who enter the doughnut hole received a discount on brand-name drugs and savings on generic drugs. Below is a table showing the percentage of the cost of medication the beneficiary will be expected to pay between now and 2020.


Eliminate the cost of preventative services

A second goal of the ACA is to reduce or eliminate the cost of preventive services for all people with health insurance, including Medicare beneficiaries.

“Every Medicare beneficiary is eligible for an annual wellness exam, as well as cancer screenings, immunizations, diet counseling, etc,” Brown said.

Reducing fraud, waste and abuse

A final change provided by the ACA with regards to Medicare involves reducing fraud, waste and abuse, Brown explained.

“The ACA increased sentencing guidelines for health care fraud exceeding $1 million in loses. Providers and suppliers identified as higher risk for fraud or abuse must undergo greater scrutiny,” she said.

Predictive modeling technology is also being used to combat fraud, waste, and abuse. Finally, the law provides $350 million over 10 years to enhance anti-fraud efforts. In February 2014, the annual Health Care Fraud and Abuse Control Program report was released, indicating for every dollar spent on health care-related fraud and abuse investigations over the past three years, $8.10 was recovered.

If you have additional questions regarding how ACA affects you, please visit the HealthCare.gov website.