While there was a lot of skepticism about the Affordable Care Act (ACA) in its infancy, time has shown that the federal health program has been very good for individuals and families. 

ACA was primarily designed to reform the private health insurance market, yet it also benefits Medicare beneficiaries by:

• Closing the “donut hole”
• Requiring free preventative services
• Restructuring Medicare Advantage payments
• Ensuring premiums are spent on care vs. profits
• Requiring plans to communicate information in easy-to-understand language
• Prohibiting lifetime limits on coverages and requiring coverage for pre-existing conditions
• Supporting medical research and innovation

In addition to the advantages for Medicare beneficiaries, these improvements that ACA brought about have also financially bolstered the Medicare program which has long been under threat of insolvency. 

How ACA Impacted Medicare to Improve Beneficiaries’ Lives

According to the Center for Medicare Advocacy, ACA has made significant improvements in healthcare services that impact Medicare beneficiaries, and it has strengthened the Medicare program overall. Whether you choose a Medigap plan or Advantage plan, you’ll experience these impacts. It’s common to wonder what is Medigap or Medicare Advantage while learning about Medicare. 

However, to understand Medicare’s coverage, it’s best to start with how the ACA has made a positive impact on Medicare beneficiaries:

ACA has effectively closed the “donut hole” coverage gap

The donut hole refers to a coverage gap where beneficiaries with Part D prescription drug coverage reached a certain level and then had to pay 100% of their prescription drug costs until they reached a certain threshold. Today, Medicare beneficiaries can more easily afford the prescription drugs they need to live healthy lives. 

ACA Allows for Free Preventative Services for Medicare Beneficiaries

ACA mandates the Medicare program to offer basic preventative health services to Medicare beneficiaries at no charge, and the same preventative health services are also mandated for those who are enrolled in Marketplace health plans. Preventative services prioritize health and wellness for individuals and reduce overall costs for Medicare beneficiaries. 

According to the Centers for Medicare & Medicaid Services, preventative services have short- and long-term improvements on people’s health and productivity. ACA enables Medicare beneficiaries to receive medical services such as mammograms, colon cancer screenings, and certain vaccinations at no cost. Furthermore, preventative services reduce health costs because they address beneficiaries’ health concerns before they become more serious. 

ACA restructured Medicare Advantage payments to save Medicare beneficiaries money 

ACA restructured Medicare Advantage payments giving them a smaller percentage than the original Medicare rates. As a result, Medicare Advantage rates are 13% lower than those of Original Medicare. AHIP reports that Medicare Advantage plans are 7% less than what Medicare beneficiaries spent on Original Medicare. Also, ACA does not allow Medicare Advantage plans to charge higher costs for skilled nursing care, kidney dialysis, or chemotherapy. 

ACA ensures that premiums are spent on healthcare vs. profits

An ACA provision establishes a Medical Loss Ratio (MLR) that requires premiums to be spent on care as opposed to profits or administrative costs. Health insurers who do not spend at least 80% of health premiums on medical care or improving the quality of care and services must issue rebate checks to consumers. 

ACA requires health plans to summarize terms and coverages using language you can easily understand

Since ACA has been implemented, Medicare beneficiaries can count on receiving information that explains medical and insurance terms in a glossary. Also, health information must be presented in ways that the general public can understand, so they can make confident choices about their health plans. You can expect to see examples of coverages and estimates for out-of-pocket expenses for common medical services such as managing diabetes.

ACA prohibits health insurers from placing lifetime limits on coverages and refusing to insure pre-existing conditions

Before ACA, health insurers could place a maximum dollar limit on covered benefits during the life of a health plan, and they could refuse to cover pre-existing conditions. Today, Medicare beneficiaries do not have to worry about lifetime limits, and they have the peace of mind of knowing pre-existing conditions are covered. 

ACA supports medical research and innovation

ACA supports the establishment of a Patient-Centered Outcomes Research Institute which engages in researching the effectiveness of medical treatments. Also, the CMS Innovation Center is responsible for testing innovative payment and delivery systems to cut costs while improving outcomes. 

Furthermore, the Medicare and Medicaid Coordinating Office was established to improve care for dually eligible individuals for Medicare and Medicaid services. This initiative was designed to cut more effectively coordinate coverages under both programs. Also, under ACA, health plans must collect and report data to reduce disparities for minorities and LGBT Americans. 

Medicare Beneficiaries Gained Valuable Benefits Under ACA

ACA fosters a spirit of health and wellness by promoting prevention, care coordination, and the quality of services. Overall, the changes ACA brought about have improved the lives of millions of Medicare beneficiaries who rely on Medicare health plans. Because ACA strengthened the Medicare trust fund, future beneficiaries will be able to enjoy the same valuable benefits today’s beneficiaries enjoy.