If you’re enrolled in Medicare, then you’ve probably noticed some changes in the amount you pay out of pocket for certain services or your Part D coverage in particular. Let’s take a look at how Medicare will change in the next few years thanks to the Affordable Care Act.
Essential Benefits and Protections
The ACA guarantees consumers certain benefits and protections under the law as long as they have “minimum essential coverage.” If you enroll in Medicare Part A and a Medicare Advantage plan, then you will gain access to the provisions of the new law. Medicare Part B on its own doesn’t count. Assuming that you have a Part A or Advantage plan, you’re guaranteed 10 essential benefits and a slew of protections against unfair insurance practices.
Among the 10 essential benefits provided for by the ACA is preventive care. Beneficiaries can now see their primary doctors without extra costs, and preventive care includes routine screenings for cancer and other medical conditions. Already, this included service has saved seniors and other Medicare enrollees a substantial sum. Catching illnesses and medical problems early typically reduces the long-term cost of certain conditions. The ACA has made it so that Medicare enrollees can maximize the value of their plans.
Cost Increases for Beneficiaries
Premiums, coinsurance and deductibles will increase each year, but your rates may not increase as significantly as you think. The Affordable Care Act isn’t entirely responsible for raising rates. Healthcare costs and other administrative factors influence the rates that insurers set for their products. Annual price increases happen regardless of new laws and regulations. Some may experience increases of up to 52 percent in Part D premiums, but others may see a decrease. Price adjustments depend on the company and policy.
This year, beneficiaries won’t have to worry about a price increase on Medicare Part B premiums, but some people may have to pay more for Part A if they already pay a premium for this portion. Most enrollees don’t have to pay a premium for Part A because they’ve paid into the system through work. For those who do have to pay, the 2015 premiums increased to $224 or $407 per month depending on how long they worked. The Medicare Part A deductible has also increased to $1,260 according to Medicare.com, a non-government website run by eHealth.
Since Part A covers hospital care, it’s important to note that coinsurance for hospital stays and skilled nursing facility care has also changed for 2015. The following rates apply:
- For days 61 through 90, you’ll pay $315 per day for covered hospital stays.
- For 91 or more days at the hospital, your coinsurance rate jumps to $630 per covered day.
- At a skilled nursing facility, you’ll pay $157.50 per day for days 21 through 100.
- After and including day 101, you’re responsible for all costs.
Covered hospital stays up to 60 days and skilled nursing stays up to 20 days are covered under Medicare Part A without the need for coinsurance. Part D costs will also increase for most enrollees, and you may see increased premiums if you sign up for a Medicare Advantage plan. Check with your insurer to see if your rates will be affected.
Transforming Medicare Part D
Some of the biggest changes happening to Medicare will take place in Medicare Part D, the prescription drug coverage portion. Prescription drug coverage is optional and will remain that way. If you enroll in a Part D plan, then you gain certain advantages such as being able to pay for monthly prescriptions without the costly retail price tag. This year, beneficiaries will have fewer options when it comes to Part D plans as there are now about 1,001 plans to choose from, which is the lowest amount since the program started. However, there are still plenty of options for enrollees nationwide.
Until the ACA was passed, there were some downsides to the Part D plan. You may have heard about the Part D coverage gap, which is also called the “donut hole.” Medicare Part D works by covering prescriptions up to a certain dollar amount. Once you reach that amount, you have to pay the retail price of the drugs until you reach the out-of-pocket spending amount. When the ACA took effect, Part D beneficiaries found that they had access to better government assistance while they were trapped in the “donut hole.” Discounts made it possible to pay for prescriptions again.
In 2015, the gap is closing even further and will continue to narrow over the next few years until it eventually closes for good for most enrollees by 2020. While you’re in the Part D coverage gap, you now get up to 35 percent off the cost of generic drugs and 55 percent off the cost of brand name prescriptions until you reach the other side.
Cutting Down on the Excess
The ACA wants to make the American healthcare industry run more efficiently, which includes changing aspects of government-sponsored programs like Medicare. According to ObamacareFacts.org, the ACA has already accomplished a portion of its goal to reduce wasteful spending by implementing the following measures and programs:
- Cutting Medicare funding by about $716 billion total and redistributing funds more effectively throughout the program
- A concentrated effort to reduce Medicare fraud conducted by the Department of Justice, including fraud prevention techniques and tools
- Accountable Care Organizations, which are responsible for helping about five million Medicare beneficiaries make the most of their care
- Better patient safety efforts to reduce costly readmission to hospitals
- Closing the Part D “donut hole” via cost-saving measures and increased government support
Some people have argued that cutting Medicare spending hurts beneficiaries, but that argument looks only at the short term. Cost-saving efforts by the government have already strengthened the Medicare program and increased its lifespan to at least 2030. That means that more seniors will be able to take advantage of the program in the long run. The ACA is designed to limit unnecessary spending and make healthcare better and more affordable for more people. The changes made to Medicare support this goal.