The Affordable Care Act Is Changing Medicare. Here Are The Highlights.


February 3, 2015

The Affordable Care Act attempts to revolutionize all aspects of the American healthcare

industry, including Medicare. According to the Centers for Medicare & Medicaid Service, the new

healthcare law will save Medicare beneficiaries about $4,200 over the next decade thanks in part to better

access to preventive care and lower drug costs. The ACA hopes to reduce the cost of Medicare on

taxpayers while making the program viable for future generations of beneficiaries.

As part of this endeavor, there will be some significant changes to Medicare Advantage and the Part D

portion of Medicare in the coming year. Seniors and others who participate in these programs should

consider different options during the annual enrollment period to make sure that their plans still address

their needs. Below, we’ll talk about some of the major changes being implemented for 2015.

Fewer Medicare Part D Plans

Part D beneficiaries will have to take a closer look at their policy options in 2015. The Kaiser Family

Foundation reports that enrollees will have just 1,001 plans to choose from next year, which amounts to a

net loss of 68 plans since last year. Plan options have decreased since 2006 as insurers combine elements of

existing policies into new consolidated plans or eliminate outdated plans altogether. In 2015, Medicare Part

D enrollees will see a reduction in plan availability nationwide that represents the lowest number of plan

options since the program started in 1965.

Likewise, low-income seniors will have fewer options for subsidized Part D plans. In 2016, LIS

participants can choose from just 283 plans nationwide. Kaiser points out that despite the decrease in the

number of plans available for next year, beneficiaries in each state can still choose from “at least two dozen

stand-alone” Part D drug plans and several Medicare Advantage drug plans next year.

Increased Costs for Part D

The ACA seeks to make Medicare more financially sound, which means that beneficiaries will have to take

up a greater portion of the cost of the program via premiums, deductibles and copayments. In 2015,

beneficiaries will experience premium hikes worth between 11 and 52 percent depending on policy. Not

everyone will face a premium increase. Some Part D plans will actually lower premium rates next year.

Sixty percent of the nation’s 10 largest Part D plans will raise prices next year, but three of the top 10 plans

will reduce premiums by up to 31 percent. This is why it’s important for Medicare beneficiaries to reassess

their needs during the annual enrollment period.

Part D enrollees will also likely face a $10 increase on the yearly deductible for drug costs. Though a

negligible amount, the increase does indicate that insurers will be adjusting their rates going forward in an

effort to implement ACA changes into the program. Co-payments may also increase in 2015 depending on

carrier and plan type. To save on increasing costs, seniors are encouraged to check with their doctors about

free drug samples and to make sure to request generic prescriptions when possible.

Shrinking of the Part D “Donut Hole”

Spending cuts, rising premium costs and other changes may seem tough, but there are some positives on the

horizon for Medicare beneficiaries. One of the major goals of the ACA is to close the Medicare Part D

coverage gap or “donut hole” by 2020. This gap is created when beneficiaries hit their yearly payout limit

on drug coverage but have not yet met their out-of-pocket spending threshold for the year. In the interim,

Medicare Part D won’t pay for prescription drug coverage. This situation prevents a lot of seniors from

getting the medicine that they need at an affordable price.

Under the ACA, Part D beneficiaries will get help with the cost of prescriptions while they’re in the gap,

and the amount varies by year. In 2015, beneficiaries will pay just 45 percent of the cost for brand-name

drugs and 65 percent for generic drugs. Cost assistance changes each year in an effort to close the gap

completely by 2020. Once it’s closed, millions of seniors will be able to afford their prescriptions on a

continual basis without hitting the dreaded donut hole.