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The Affordable Care Act (Obamacare): If You Have Health Insurance


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The Affordable Care Act Improves Medicare Part D coverage (the drug benefit) by doing the following:

Doughnut hole: The beneficiary coinsurance rate in the doughnut hole for brand name drugs is gradually reduced over time from 100% to 25% by 2020. (At that point, cost sharing for both brand and generic prescription drugs will be the same during the “donut hole” as during the initial coverage period. Consequently, in 2020, individuals will pay 25 percent of drug costs, and the Part D plan will pay 75 percent. 

For a schedule of the reductions while the hole remains open, click here offsite link.

Brand-name drugs: The Act requires pharmaceutical manufacturers to provide a 50% discount on prescriptions filled in the Medicare Part D coverage gap (the so-called doughnut hole). This is in addition to federal subsidies of 25% of the brand-name drug cost by 2020 which is being phased in. 

Generic drugs:  The Act provides federal subsidies of 75% of the generic drug cost by 2020 for prescriptions filled in the Medicare Part D doughnut hole. The subsidies are being phased in.  

Preventive Services: Medicare recipients arel not charged co-pays or deductibles for basic preventive care such as immunizations.

Dual eligible beneficiaries (people who qualify for both Medicare and Medicaid):

  • The Act makes Medicare Part D cost-sharing for full-benefit dual eligible beneficiaries receiving home and community-based care services equal to the cost-sharing for those who receive institutional care. 
  • The Act aims to improve care coordination for people who are eligible for both Medicare and Medicaid by creating a new office in Centers for Medicare and Medicaid Services, known as the Federal Coordinated Health Care Office.

Catastrophic coverage: Between 2014 and 2019, the Act reduces the out-of-pocket amount that qualifies an enrollee for catastrophic coverage in Medicare Part D.

Income-related Medicare Part B premiums: The Act freezes the threshold for such premiums for 2011 through 2019 at 2009 levels.

Medicare Part D premium: The Act reduces the subsidy for people with incomes above $85,000/individual and $170,000/couple.

Personalization: The Act provides Medicare beneficiaries access to a comprehensive health risk assessment and creation of a personalized prevention plan. (The health risk assessment model is to be developed within 18 months following enactment).

Environmental Health Hazards: The Act expands Medicare coverage to individuals who have been exposed to environmental health hazards from living in an area subject to an emergency declaration made as of June 17, 2009 and have developed certain health conditions as a result. 

Medicare Advantage (MA) plans: For individuals making more than $85,000 or couples making more than $170,000, subsidies are being reduced.

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