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How does U.S. healthcare reform affect Medicare?

Strengthening and improving Medicare is a major goal of the Affordable Care Act, passed in March 2010. According to Kathleen Sebelius, U.S. Secretary of Health and Human Services, rather than change or diminish your current Medicare benefits, the Affordable Care Act attempts to improve Medicare by introducing new benefits and savings with an emphasis on delivering quality care.

Some key areas of Medicare targeted by the Affordable Care Act include -

  • Eliminating waste, fraud, and inefficiency. It is hoped that provisions of the new law will extend the solvency of the underlying trusts that fund Medicare until 2029 by slowing the rate of spending and reducing payment errors, waste, fraud, and inefficiency.
  • Reducing annual payment increases to insurance companies, hospitals, and nursing homes. In addition to attempting to save billions of dollars by eliminating waste, fraud, and inefficiency, the Act also extends the life of Medicare by reducing annual payment increases to insurance companies, hospitals, and nursing homes from Medicare.
  • Changing Medicare Advantage plans offered by private insurers. A series of changes will reduce Medicare payments to Medicare Advantage plans, which currently cost, on average, $1,000 more per insured person per year.
  • Improving coverage. The cost of healthcare takes a particularly heavy toll on Americans who have fixed and in many cases limited income, as is often the case for retirees and anyone suffering from a debilitating disease that makes it difficult to work. The Act provides some relief by
    • eliminating the “doughnut hole” in prescription coverage – a gap in coverage in which the patient is responsible for 100% of prescription drug costs,
    • eliminating coinsurance for preventive services, and
    • providing a comprehensive “Welcome to Medicare” physical and annual wellness exam, without cost to you if you are a Medicare beneficiary.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.