It’s Your 65th Birthday: The ACA and Medicare

What is Medicare?

Medicare is the government health insurance for:

Medicare has four different parts. The different parts of Medicare help cover certain services.

The Four Categories of Insurance

Medicare Part A
(Hospital Insurance)
Medicare Part B
(Medical Insurance)
  • Covers certain doctor’s services, ambulatory care, medical supplies, and preventive services.
Medicare Part C
(Medicare Advantage Plan)
  • The Medicare Advantage Plan is Medicare offered by
    a private insurance company. The private company provides all Medicare benefits except hospice care.

    Some Medicare Advantage Plans have extra benefits (such as eyeglass coverage). Whether or not you get these extra benefits depends on which private company is in charge of your Medicare Advantage Plan. You cannot use supplemental insurance while on the Medicare Advantage Plan. However, the extra benefits are like supplemental insurance. The private insurance company is able to change the extra benefits it offers.
Medicare Part D
(Prescription Drug Coverage)

How Do I Know What Type of Medicare I Have?

To find out what type of Medicare you have, you can:

  1. Check your red, white, and blue Medicare card.
  2. Check your Medicare enrollment plan online: https://www.mymedicare.gov/.
  3. Call 1-800-MEDICARE (1-800-633-4227).

How Will the Affordable Care Act Affect Me?

The Affordable Care Act (ACA) will not cut any of your benefits. For many people, the ACA will allow Medicare to cover more costs, offer more services, and improve quality of care.

If I Already Have Medicare, Do I Have to Do Anything?

If you already have Medicare, you don’t have to do anything. You are considered covered, so you do not have to pay any taxes.

Can I Get a Plan from the Marketplace Instead of Having Medicare?

If you are already enrolled in Medicare, you cannot change your insurance and get a new plan through the Health Insurance Marketplace. You also cannot get additional insurance through the Marketplace. It is against the law for someone to sell you a plan from the Marketplace if they know you have Medicare.

However, if you qualify for Medicare but are not yet enrolled in it, you can get insurance through the Marketplace.

Do I Have to Pay More for My Medicare?

Until 2019, seniors who make more than $85,000 (or more than $170,000 for couples) will pay more for Medicare. This will only affect about 5% of seniors. If you make $85,000 or less (or $170,000 or less for couples), you will continue to pay the standard amount for Medicare. The standard Medicare amount was $104.90 per month in 2013.

If your income increases to over $85,000 between now and 2019, you will have to pay more for Medicare. In 2020, the income limits will be increased for inflation.

What is the Donut Hole?

The donut hole is sometimes also called the “coverage gap.” It refers to Part D Medicare and prescription drugs.

You fall into the donut hole when the amount that you and Medicare have paid for your drugs reaches a certain dollar limit since the start of the calendar year. In 2013, this limit is $2,970. People who need a lot of prescription drugs (such as people with Alzheimer’s disease or people who take medicine for diabetes) often fall into the donut hole.

Before the ACA, most people had to pay for their medication without any help while they were in the donut hole. People only got out of the donut hole when the amount they paid for their medication reached a certain limit during a calendar year. In 2013, this limit was $4,750. When you reached this limit, you qualified for Catastrophic Coverage. Once you had Catastrophic Coverage, your medication was covered again. You only had to pay coinsurance or a co-payment.

The ACA is gradually closing this donut hole. Since 2011, people in the donut hole receive discounts on prescription drugs to help pay for their medication. These discounts will gradually increase each year until 2020. In 2013, there was a 52.5% discount on covered brand-name drugs, and a 21% discount on covered generic drugs. To see the schedule of discounts for prescription drugs while in the donut hole, go to: https://www.medicare.gov/Pubs/pdf/11493.pdf

In 2020, the donut hole will be closed completely. At that point, you will pay no more than 25% of the cost of your drugs at any point during the year in which you have reached your deductible.

Extra Help is a federal program that helps people with low incomes pay the costs of Medicare drug coverage. People with Extra Help will not have a donut hole.

How Does the Affordable Care Act Affect Medicare?

The Affordable Care Act makes many changes to Medicare. Some of the key changes to Medicare are below:

Where Can I Find More Information?

The federal government has created a short site about how the Affordable Care Act affects Medicare:
https://www.healthcare.gov/if-i-have-medicare-do-i-need-to-do-anything/

Medicare’s site about how the ACA affects it:
http://www.medicare.gov/about-us/affordable-care-act/affordable-care-act.html

A good summary of how the ACA affects Medicare by the AARP:
http://www.aarp.org/health/health-care-reform/info-06-2010/fact_sheet_health_law_and_medicare.html

A great educational brochure created by the Health Foundation of Greater Cincinnati:
http://reform.healthfoundation.org/upl/ACA_Medicare_032013.pdf