How the Affordable Care Act Affects Medicare Beneficiaries

The Affordable Care Act (commonly called “Obamacare”) requires that all Americans have health insurance that meets minimum essential coverage standards, such as through an employer, veterans benefits, or other source. If you're already enrolled in Original Medicare (Part A and Part B) or a Medicare Advantage plan (also called Medicare Part C), you meet the law's coverage requirements. You also don't need to take any action if you're enrolled in just Medicare Part A.

The exception is if you're only enrolled in Medicare Part B. Having only Medicare Part B doesn't meet the minimum essential coverage requirement, and you may have to pay a penalty under Obamacare. The penalty in 2016 is either (i) 2.5% of your annual household income or (ii) $ 695 per adult ($347.50 per child under 18) up to $ 2,085 per household, whichever amount is greater. This penalty doesn't apply in certain cases. For example, if you cannot afford to purchase any of the coverage available to you (based on the Affordable Care Act’s affordability guidelines), you may qualify for an income-related exemption to the penalty.

If you're only enrolled in Medicare Part B, you might consider signing up for Medicare Part A to avoid paying the Affordable Care Act penalty. However, you shouldn't sign up for a Marketplace plan if you already have Medicare coverage. In fact, the government tries to prevent the sale of Marketplace plans to anyone who is a Medicare beneficiary.

Keep in mind that if you need to pay a premium for Medicare Part A and didn't enroll when you were first eligible, you may also have to pay a separate late-enrollment penalty for Part A when you do sign up.

How Obamacare affects Medicare coverage

Although the Obamacare tax penalty doesn't affect you if you're already enrolled in Medicare Part A and Part B, the health-care reform law does expand Medicare coverage in a few important ways:

Costs in the Medicare Part D coverage gap

The Medicare Part D coverage gap is the temporary limit on what your Medicare Part D Prescription Drug Plan pays for prescription drugs. Beneficiaries enter the coverage gap once they and their plans have spent a certain combined amount on covered drugs. While beneficiaries were previously responsible for 100% of prescription drug costs in the coverage gap, the Affordable Care Act reduces these costs through manufacturer discounts and government subsidies. Beneficiaries who enter the coverage gap will be responsible for a smaller portion of covered drug costs every year until the coverage gap, also known as the donut hole, is closed in 2020.

Medicare preventive services

The Affordable Care Act also expands Medicare preventive benefits. Certain services may now be completely covered for Medicare beneficiaries; this includes, but isn't limited to:

  • Abdominal aortic aneurysm screenings

  • Alcohol misuse screenings and counseling

  • Cardiovascular disease screenings for cholesterol, triglyceride, and lipid levels

  • Cervical and vaginal cancer screenings

  • Certain colorectal cancer screenings

  • HIV screenings

  • Depression screenings

  • Diabetes type 2 screenings

  • Nutrition counseling services

  • Obesity screenings and counseling

  • Certain vaccines, such as the flu shot, pneumococcal shot, and hepatitis B shot

  • Sexually transmitted infections screenings and counseling

  • One-time 'Welcome to Medicare' visit

  • Annual 'Wellness' preventive visits

Confirm the details of coverage with your Medicare plan and your doctor or health-care provider. Some benefits may have additional eligibility requirements to be covered by Medicare. Make sure your doctor or health-care provider accepts Medicare assignment, or the benefit may not be fully covered.

Obamacare's expanded Medicare preventive coverage applies to all Medicare beneficiaries, whether they have Original Medicare or a Medicare Advantage plan. However, if you're interested in broader health coverage, many Medicare Advantage plans cover benefits beyond Original Medicare, such as routine vision and dental benefits, wellness programs, or prescription drug coverage.

For more information

Healthcare.gov, "Medicare and the Marketplace"

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