Medicare and the Affordable Care Act

The Marketplace does not affect Medicare choices or benefits. This is because Medicare is not part of the Marketplace. The Affordable Care Act even has language that protects Medicare. It specifically states that nothing in the Act shall result in a reduction of guaranteed benefits under Medicare. This means that you do not have to purchase any coverage through the Marketplace if you have Medicare. In fact, you still get all the benefits of your current Original Medicare or Medicare Advantage Plan.

On the other hand, if you are currently covered under a Marketplace plan, you can keep it until your Medicare coverage starts. Then you can terminate the Marketplace plan without penalty. (After your Medicare Part A coverage starts, you will not be eligible to keep any premium tax credits or other savings for a Marketplace plan based on your income. This means you would have to pay the full price for the Marketplace plan.)

You will get an initial enrollment period to sign up for Medicare. In most cases, the initial enrollment period begins three months before your 65th birthday and ends three months afterward. For most people, it’s beneficial to sign up for Medicare during this time. This is because those who sign up for Medicare after the initial enrollment period ends, face some negative consequences. For example, you might be required to pay a Part B (medical insurance) late enrollment penalty for as long as you have Medicare. Also, you are only permitted to enroll in Medicare Part B (and Part A in some cases) during the Medicare general enrollment period that runs from January 1 to March 31 each year. However, coverage will not begin until July of that year. This could create a gap in your insurance coverage.

Sometimes, people with Medicare want additional coverage. However, it’s against the law for someone who knows that you have Medicare to sell you a Marketplace policy. So, if you want coverage to supplement Medicare (Parts A and B), you can purchase a Medigap policy. To get prescription drug coverage, you can purchase a Medicare Part D prescription drug plan.

Beginning in 2014, the Affordable Care Act required each individual to have qualifying health care coverage (called “minimum essential coverage”) or to make a payment (or qualify for an exemption) when filing a federal income tax return.

In many instances, Medicare coverage meets the Affordable Care Act’s requirement that all Americans have health insurance. For example, those who have Medicare Part A (hospital insurance) are considered covered under the law and don’t need to purchase a Marketplace plan or other additional coverage.

However, if you only have Medicare Part B (medical insurance), you aren’t considered covered under the health care law. This might mean that you’ll have to pay the fee that people without coverage must pay when filing a federal income tax return (or purchase additional coverage to avoid the payment).

Medicare Part C (Medicare Advantage) also counts as minimum essential coverage under the law.

The Affordable Care Act also affected Medicare by adding coverage for a "Wellness Visit" and a “Welcome to Medicare” preventative visit.

It also eliminated cost-sharing for almost all of the preventive services covered by Medicare. (This means you don’t have to pay coinsurance, a deductible, or otherwise share the cost for certain preventative services.)

A free yearly “wellness” visit can be used to develop or update a personalized health plan, which is designed to prevent disease and disability based on your particular current health and risk factors. At the wellness visit, your health care provider will have you fill out a questionnaire, called a “Health Risk Assessment.” By answering some questions, your health care provider can come up with a personalized prevention plan to keep you healthy and get the most out of your visit.

The wellness visit will also include:

• a review of your medical history, as well as your family history
• creating or updating a list of your current health care providers, including a list of your medications
• a measurement of your height, weight, body mass index, and blood pressure, among other things
• an analysis to detect any cognitive impairment
• personalized health care advice
• a listing of your risk factors and treatment options, and
• a schedule for appropriate preventive services.

If additional tests or services are performed at the time of the wellness visit, these won’t be covered under this particular benefit and you may have to pay coinsurance, and the Part B deductible may apply.

You can get a wellness visit once every 12 months.

If you have recently enrolled in Medicare, a “Welcome to Medicare” preventive visit is covered during the first 12 months of Part B (medical insurance) coverage. This is a one-time visit. During the visit, your health care provider will review your health, as well as provide education and counseling about preventive services and other care.

The Affordable Care Act requires plans to fully cover the costs of certain recommended preventive services, such as mammograms and colonoscopies. All people with Medicare Part B are covered and there is no Part B coinsurance or deductible charge.

Another way that the Affordable Care Act affects Medicare is regarding the “donut hole.” As of 2020, the donut hole will be completely closed, thanks to the Affordable Care Act's plan to minimize prescription drug costs in this coverage phase.

What is the donut hole? The donut hole (also called the Part D coverage gap) was the coverage phase you'd enter when you and your Medicare Part D prescription drug plan paid a specific amount during the year for covered prescription drugs. After you'd reached this amount ($4,020 in 2020),¹ you'd pay more out of pocket for drugs.

You were in the donut hole until you qualified for catastrophic coverage, which would kick in once you had paid $6,350 (in 2020).² After you qualified for catastrophic coverage, you'd have to make only a small coinsurance or copayment for the remainder of the year.

The Affordable Care Act has made Medicare prescription drug coverage (Part D) more affordable during the coverage gap by gradually closing the prescription drug donut hole over time. In 2016, people with Medicare paid 45% for brand-name drugs and 58% for generic drugs while in the coverage gap. These percentages have shrunk over the last few years. Starting in 2020,  however, you’ll pay only 25% for covered brand-name and generic drugs during the coverage gap.

The following schedule shows out-of-pocket costs in the donut hole since 2016:

2016: 45% for brand-name drugs and 58% for generic drugs

2017: 40% for brand-name drugs and 51% for generic drugs

2018: 35% for brand-name drugs and 44% for generic drugs

2019: 30% for brand-name drugs and 37% for generic drugs

2020: 25% for brand-name drugs and 25% for generic drugs

Initiatives under the Affordable Care Act are designed to support care coordination. Under these initiatives, your doctor may get additional resources that will help ensure that your treatment is consistent. The Affordable Care Act provides ways for hospitals, doctors and other health care providers to coordinate their care for Medicare beneficiaries. As a result, health care quality is improved and unnecessary spending is reduced.

Under the Affordable Care Act, the Medicare Trust fund will be extended to at least the year 2029. This is a 12-year extension that is primarily the result of a reduction in waste, fraud, and abuse, as well as Medicare costs.

One common misconception about the Affordable Care Act is that Medicare beneficiaries will no longer be able to see their current doctors. This is not true. There is nothing in the Affordable Care Act that expressly changes which doctors Medicare patients can visit.

Health care providers (such as hospitals, physicians, pharmacies and other health care providers), however, are free to make routine business decisions and may choose to withdraw from the Medicare program. This could result in the Medicare recipient needing to look for a new doctor. Still, there is nothing in the Affordable Care Act that requires seniors who are on Medicare to leave their current doctors and choose a new one.