Ask the Expert: Conflicting Information About Medicare and the ACA

Q. A few days ago, in an article by Oscar Garcia of the Social Security Administration, I read that “People who have Medicare coverage are not affected by the Affordable Care Act.” In my own personal experience, I don’t think he is completely correct. I am on Medicare and personally, I have been affected by the Affordable Care Act (ACA). I have taken advantage of the wellness visits and prescription drug savings. In fact, as an example, before the ACA, I was told I had to pay $160 in cost-sharing for a colorectal cancer screening. Today, this important screening and many others are covered at no cost to me (with no deductible or co-pay). I have also read in many places that the ACA is playing an important role in improving the financial viability of Medicare. In light of this conflicting information, can you clarify whether seniors on Medicare are or are not affected by the ACA?

A. Mr. Garcia is correct that people covered by Medicare do not need to replace Medicare coverage with plans offered in Marketplace coverage. Please read our recent article about this subject. As you noted, however, people with Medicare are affected by the ACA. According to the Centers for Medicare & Medicaid Services (CMS), below are some examples of how the ACA positively affects seniors on Medicare:

Preventative Services: The ACA helps tear down a significant barrier for some seniors to staying healthy and helps their care providers prevent, identify and treat problems early.

◦More than 25.4 million senior citizens and others covered by Medicare received at least one preventive service at no cost to them during the first eleven months of 2013, because of the Affordable Care Act.
◦Before the Affordable Care Act, Medicare recipients had to pay part of the cost for many preventive health services, such as the colorectal cancer screening you described.
◦These out-of-pocket costs made it difficult for many seniors to get the important preventive care they needed.

Annual Wellness Visits: In the first eleven months of 2013, more than 3.5 million seniors and other beneficiaries with Medicare took advantage of the Annual Wellness Visit established by the ACA.
Financial Viability of Medicare: Provisions of the ACA are proving to be highly beneficial to the future of the Medicare program.

◦ACA provisions have had a substantial effect on reducing the growth rate of Medicare spending. Growth in Medicare spending per beneficiary hit historic lows during the 2010-2012 period, and this trend has continued into 2013 (Source: Department of Health and Human Services).
◦Medicare spending per beneficiary will grow at approximately the rate of growth of the economy for the next decade, breaking a decades-old pattern of spending growth that outstripped U.S. economic growth. (source: projections by both the Office of the Actuary at CMS and the Congressional Budget Office)

Accountable Care Organizations (ACOs): Doctors, hospitals and health care providers establish ACOs to work together to provide better health care through closely coordinated services to their Medicare patients, while working to slow the growth of health care cost.

◦The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors.
◦According to CMS, when an ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.
◦There are now more than 360 ACOs working with Medicare to provide higher-quality coordinated care to 5.3 million seniors and other beneficiaries, while reducing the cost of health care (source: HHS)

Prescription Drug Coverage Savings: The ACA saved seniors $8.9 billion on their prescription drugs since the law’s enactment (source: CMS).

◦Seniors with Medicare Part D (prescription drug coverage) will see a $15 drop in their deductible, from $325 in 2013 to $310 in 2014.
◦The “donut hole” (coverage gap for seniors with large prescription drug needs), has been getting smaller each year, since 2011, and due to ACA provisions, it will continue to get smaller. In fact, in 2014, the donut hole will be $158.75 smaller than it was in 2013, another step closer to the plan to eliminate this coverage gap by 2020. For more details, read our blog post about the donut hole.

You are right in questioning the conflicting information you have read. As you can see, actions resulting from the ACA (also called Obamacare) are certainly having a major effect on seniors on Medicare today, and according to the CMS, will continue to do so in the future.

As you are taking advantage of the benefits of the ACA and planning for your next wellness visit, it is also a good idea to plan for your future and for your loved ones. If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact Farr Law Firm, P.C. as soon as possible at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to schedule your appointment for our consultation. 

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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