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The Health Care Law and Medicare

The Affordable Care Act provides several new benefits and protections

En español l The health care law — officially the Affordable Care Act — adds a number of benefits and protections to the coverage you already receive with Medicare.

1. Closes the doughnut hole

If you have prescription drug coverage under Medicare Part D and fall into the coverage gap, or doughnut hole, your out-of-pocket drug costs will be greatly reduced in the future. You'll get discounts on brand-name and generic prescription drugs while you are in the doughnut hole. These discounts will continue to increase until 2020, when the doughnut hole will disappear. Here’s how:

The percentage discounts for brand-name drugs, by year:

2013: 52.5% | 2014: 52.5% | 2015: 55% | 2016: 55% | 2017: 60% | 2018: 65% | 2019: 70%

The percentage discounts for generic drugs, by year:

2013: 21% | 2014: 28% | 2015: 35% | 2016: 42% | 2017: 49% | 2018: 56% | 2019: 63%

However, everyone on Medicare Part D will still have out-of-pocket costs for premiums and copayments, just like now before you reach the doughnut hole.

You will still be responsible for paying your premiums and deductible, as well as 25 percent of your prescription drug costs until you reach catastrophic coverage.

If your costs exceed the catastrophic coverage level, you will be responsible for only 5 percent of your prescription drug costs for the rest of the year.

2. Covers more preventive care

If you have Medicare, you can now work with your doctor on a prevention plan to keep you as healthy as possible. The additional preventive benefits include:

  • A yearly wellness visit

  • Screenings for diabetes and certain cancers. This includes mammograms, colonoscopies and other preventive screenings

The yearly wellness visit is different from a physical. A physical is a more extensive exam. You may choose to have a physical at another visit with your doctor, but Medicare generally will not pay for this service.

If you have a Medicare Advantage plan, you will need to see if your plan pays for a physical exam; otherwise, you will be responsible for payment.

3. Helps improve access to primary care

To ensure that primary care providers are available to give you quality care, the law:

  • Gives primary care providers who treat people with Medicare bonus payments for providing quality care

  • Gives incentives to physicians and nurses who provide primary care in areas with doctor shortages

4. Cracks down on waste, fraud and inefficiency

You are probably concerned about health care fraud. Scams and fraud take money from the Medicare program. The health care law:

  • Provides extra resources to fight fraud and abuse in Medicare

  • Puts in place more tools to catch those who fraudulently bill Medicare

Next page: What changes with Medicare Advantage plans? »

5. Changes to Medicare Advantage Plans

The health care law makes a number of changes in how Medicare Advantage plans work. If you have a Medicare Advantage plan, it is important to know about these changes.

Medicare Advantage plans are an alternative to Original Medicare. These plans are offered by private insurance companies and pay for the same health care services as Original Medicare. They also might pay for additional health care services that aren’t covered by Original Medicare. With most Medicare Advantage plans, you need to see the doctors and use the hospitals that are part of the plan’s network.

The law rewards Medicare Advantage plans that provide high quality care.

  • Medicare Advantage plans that rate at least three out of five stars by Medicare will receive bonus payments for providing better quality care. You can review your plan's rating at any time on Medicare's website or call Medicare at 800-633-4227.

  • Plans must now limit how much they spend each year on administrative costs. For each dollar you pay in premiums, Medicare Advantage plans must spend at least 85 cents on care.

6. If your Medicare Advantage plan changes

Every year, even before the health care law, insurance companies that offer Medicare Advantage plans make business decisions about what they cover and what they charge. As usual, you have the option to stay with your current plan or switch to a new one.

If your Medicare Advantage plan changes, you will receive a notice from your plan during Medicare’s open enrollment, which takes place from Oct. 15 to Dec. 7.

The notice will tell you what changes, if any, will take place in your Medicare plan for the upcoming plan year. This is the time for you to look at your options and make the best choice for you.

If you have questions about the notice, you can contact your Medicare Advantage plan directly. You can also call 800-633-4227.

  • You can compare your options at Medicare Plan Finder. This Web page identifies the Medicare Advantage plans offered in your area.

  • If your plan is changed or dropped, you can switch to a different Medicare Advantage plan or to Original Medicare.

7. Income-related Medicare premiums

The law includes two important changes in the premiums for people with higher incomes.

Currently, you pay a higher premium for Medicare Part B if your income is above a certain level. The income level starts at $85,000 for a single person or $170,000 for married couples filing joint tax returns.

Income-related premiums now also apply to people who have Part D prescription drug coverage. The income levels are the same as for Part B. These income levels will stay the same until 2020.

8. Medicare and the health insurance marketplace

You may have heard about the health insurance marketplace, where many Americans will now shop for health insurance.

Because you have Medicare, you already have coverage and don’t need to shop in the marketplace. You should continue to use to find or change your Medicare plan.

9. Medicare’s open enrollment is Oct. 15 to Dec. 7

Open enrollment is the time when you see what new benefits Medicare has to offer and can make changes to your coverage. In most cases, you are only able to find or change your Medicare plan between Oct. 15 and Dec. 7. Visit for information about special enrollment options.

(Medicare’s open enrollment period is different from the one for the health insurance marketplace, noted above. If you have Medicare, you won’t use the health insurance marketplace to find a new plan.) 

10. Make your choices wisely

If you are thinking about changing your Medicare or Medigap coverage, be sure to find out all the facts first.

Review all your options before you switch from one Medicare plan to another. If you have other health coverage, such as Medicaid or retiree health insurance from an employer or a union, find out how these plans work with each Medicare plan you are considering.

11. Get more information

By staying informed, you will be better able to make the decisions that are right for you.

  • Your State Health Insurance Assistance Program (SHIP) can help you navigate these changes so you can get the coverage you need. To contact your local SHIP, call 800-677-1116.

  • Medicare has a toll-free help line you can call to get your Medicare questions answered. Call Medicare at 800-633-4227.

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