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It's been two years since President Obama signed the landmark Affordable Care Act (ACA) into law on March 23, 2010.[1]  When fully implemented, ACA will provide access to health insurance for virtually all Americans.  Along the way to full implementation, ACA has already helped American families gain access to needed care, while reducing costs and improving care for millions.  Yet, even as this progress continues, the future of ACA is in jeopardy.  The law is threatened by lawsuits, including those currently before the Supreme Court, as well as by myriad bills in Congress that seek its repeal.

This article reviews ways in which ACA is strengthening and improving Medicare. We then consider other significant improvements the law has made – expanding consumer access to health care and promoting policies that improve the health care system in general. All these beneficial provisions would be lost if the law is overturned by the Supreme Court or repealed by Congress.

Improving and Protecting Medicare

ACA is good for Medicare and for the families that depend on the program. It is saving older and disabled Americans thousands of dollars a year on care and strengthening the solvency of the Medicare program.

  • Reducing Costs for Prescription Drugs.  People with Medicare are already benefiting from the phase-out of the "Donut Hole" coverage gap that required Medicare Part D enrollees to pay the full price for their drugs after a certain threshold of coverage has been met and until a catastrophic limit has been met.  Beneficiaries now pay only 50% of the cost of brand name drugs in the Donut Hole and 93% of the cost of generic drugs.  ACA is on track to fully eliminate the Donut Hole by 2020, ensuring people enrolled in Part D plans have better access to the drugs they need.
  • Improving Accountability and Value of Medicare Advantage (MA) Payments.  ACA more fairly reimburses private Medicare plans.  Pursuant to the law, Medicare Advantage payments were restructured to better match payment in traditional Medicare.  Prior to the restructuring, MA payments were, on average, 13% higher than those for traditional Medicare.[2]  Also, MA plans are prohibited from charging higher cost-sharing than traditional Medicare for skilled nursing facility care, chemotherapy and kidney dialysis.  Further, MA plans are required to spend a specific percentage of premiums on actual coverage rather than on administration, marketing or profits.
  • Saving Lives with Preventive Health Services for Medicare Recipients. ACA makes many preventive screenings and services free for people with Medicare.  It also added an annual Wellness Visit, all at no cost to the beneficiary.

The biggest threats to Medicare are attempts to privatize and undermine the community of people who rely on Medicare for their health care.  Ironically,these proposals are generally advanced by the same individuals who decry health care reform and argue that it hurts Medicare, and Medicare beneficiaries.

Expanding Access to Health Care

ACA makes great strides in ensuring that Americans can get and afford the coverage and care they need for themselves and their families. It ends harmful and discriminating practices that left many people uninsured, especially when they needed care most. Policies already, or soon-to-be, in effect include:

  • Better Coverage for Children.  Effective in2010, ACA prohibits plans from refusing coverage to children with pre-existing conditions and increases access under a parent's plan to adult children up to age 26.  The increase in coverage age to 26 is particularly important given the high unemployment rate and the limited number of jobs offering health insurance. Thanks to ACA, the uninsured rate for young adults has dropped over 27% and 2.5 million more young adults have health insurance. [3]
  • Saving Lives with Preventive Health Services.  The law requires new health plans to provide coverage without cost-sharing for preventive services rated as A or B by the U.S. Preventive Services Task Force. Patients can now receive certain services including mammograms, colonoscopy screenings for colon cancer, and some vaccinations at no cost. To date, over 54 million Americans with private insurance have been provided at least one free preventive service thanks to ACA, ensuring that health and wellness is prioritized and helping reduce costs for families and state and federal budgets.[4]
  • Removing Lifetime Limits. ACA outlaws the practice of placing lifetime limits on the dollar value of coverage or rescinding coverage (except in cases of fraud) for consumers.
  • Covering Pre-existing Conditions.  Every state has a plan, operated by either the state or the federal government, to insure individuals who have been uninsured for at least six months due to a pre-existing condition.  In 2011, the federal government eased rules for the plans it operates in 23 states and the District of Columbia, ensuring that even more Americans who have been unjustly denied coverage due to a Pre-Existing Condition now have access to care. More than 50,000 Americans now have coverage through the Pre-existing Condition Insurance Plan (PCIP) program, and will continue to enjoy access to care once ACA is fully implemented in 2014.[5]
  • Making Plans Easier to Understand for Consumers. Starting this September, ACA requires all health plans to provide consumers with concise, easy to understand summaries of coverage and glossaries of terms.  As a tool that enhances informed decision-making, this change will better enable consumers to navigate the confusing process of shopping for and comparing plans. Health plans will also have to provide examples of coverage and estimates of out-of-pocket costs for common situations such as maternity or managing diabetes.
  • Protecting Consumer Dollars, Not Corporate Profits. ACA requires insurance plans to provide real value.  The law establishes a Medical Loss Ratio (MLR) to ensure that consumers' premium money is spent on care, not administrative costs or profits. If insurance companies fail to spend at least 80% of consumers' dollars on medical care and improving quality of care and services provided, they will be required under ACA to issue rebate checks to consumers.[6]
  • Expanding Coverage for Childless Adults through Medicaid.  The law creates a state option to expand coverage to childless adults with incomes up to 133% of the Federal Poverty limits (about $15,000/year for one person).  This coverage will be required beginning in 2014, giving many Americans access to affordable care. It will be paid for by the federal government for three years; after that the federal government will pay approximately 90% of the costs.

Improving Care and Reducing Costs

ACA works to improve and explore new delivery systems and policies that will improve quality, make the system more efficient, and reduce costs. Among these efforts are:

  • Comparative Effectiveness Research.  The law authorized a Patient-Centered Outcomes Research Institute to conduct research into the comparative effectiveness of various medical interventions.
  • The Office for Dual Eligibles.  This office, now called the Medicare and Medicaid Coordinating Office, was established to improve care for those Medicare beneficiaries who also have Medicaid and to promote more efficient and cost-effective methods for the provision of care.  In its two years of operation, the MMCO has launched an alignment initiative to identify and address those areas where differences in Medicare and Medicaid law create problems for beneficiaries.  It has also promoted the development of integrated care initiatives by states, to more effectively coordinate and manage care for dual eligibles.  More than 20 states are engaged in the initiative at various levels of development.
  • Center for Medicare and Medicaid Innovation.  The law established the Center, with authority to test innovative payment and delivery systems that improve outcomes and decrease costs, or improve outcomes without increasing costs, or decrease costs without worsening outcomes.  The Innovation Center has collaborated closely with the Medicare and Medicaid Coordinating Office (mentioned above) to test models for improving care for dual eligibles.
  • Accountable Care Organizations (ACOs) in Medicare.  This provision, applicable to the traditional Medicare program, allows physicians and hospitals to organize with other health care professionals into voluntary organizations that can share with Medicare in savings generated from caring for certain Medicare beneficiaries if the ACOs meet designated quality standards. 
  • Medicare Value-Based Purchasing.  Beginning October 1, 2012, Medicare will pay hospitals based on their performance on certain quality measures and will move toward making such payments applicable to skilled nursing facilities, home health agencies, and ambulatory surgical centers.
  • Data Collection to Reduce Health Care Disparities.  Effective March 23, 2012, ACA requires the collection and reporting of certain data on race, ethnicity, sex, primary language, and disability status. The data collection and disaggregation will help address and reduce disparities faced by communities including lesbian, gay, bisexual and transgender (LGBT) Americans.

Conclusion

The Affordable Care Act expanded access to health care and improved the lives of the millions of Americans and their families who count on Medicare. The law ensures that future generations will have access to benefits by strengthening the Medicare Trust Fund and by supporting delivery system reforms that will help reduce the growth in health care costs.  ACA promotes health and wellness for beneficiaries by emphasizing prevention, quality, and care coordination.  Health care reform also benefits the families of Medicare beneficiaries by extending access to health insurance coverage to millions of uninsured individuals, and by protecting everyone against insurance company practices that deny health insurance coverage to people when they need it.

Efforts to eliminate ACA and to privatize Medicare endanger the lives of many, particularly in the current environment of fragmented health care delivery, ever-rising health care costs, and increased unemployment and job insecurities.  Further proposals to shift more costs to Medicare beneficiaries through privatization would leave more people vulnerable and eliminate a true community Medicare program.

Health Care Reform is good for Medicare, consumers, families, and taxpayers.  Medicare beneficiaries and their families should celebrate the Affordable Care Act, and should work hard to ensure that its provisions are fully implemented.



[1]  Health Care Reform consists of two separate laws, the Patient Protection and Affordability Care Act of 2010 (PPACA), Pub.L. 111-148  (March 23, 2010),  and the Health Care and Education Reconciliation Act of 2010 (HCERA), Pub. L. 111-152 (March 30, 2010).  The laws often are collectively referred to as the Affordable Care Act (ACA).
[2] See, e.g., MedPAC Report to Congress: Medicare Payment Policy (March 2010) noting that in 2010, overall payments to plans average an estimated 113 percent of original Medicare fee-for-service (FFS) spending; available at:  http://www.medpac.gov/documents/Mar10_EntireReport.pdf.
[3] Department of Health and Human Services report, available at http://aspe.hhs.gov/health/reports/2011/YoungAdultsACA/ib.pdf.
[4] Department of Health and Human services, News Release: Affordable Care Act Extended free preventive services to 54 million Americans with private insurance, available at http://www.hhs.gov/news/press/2012pres/02/20120215a.html.
[5] Center for Consumer Information and Insurance Oversight report, available at http://www.cciio.cms.gov/resources/files/Files2/02242012/pcip-annual-report.pdf.
[6] Healthcare.gov, http://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html

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