How does the healthcare law change how Medicare Advantage plans are paid?

Currently, Medicare pays subsidies to the private companies that offer Medicare Advantage plans. This means that these plans cost the Medicare program more than Original Medicare.

In 2012, Medicare started to reduce these subsidies so payments will be more in line with Original Medicare. The changes in Medicare Advantage payments will save the Medicare program money. Some of the savings will be used to close the Medicare prescription drug coverage gap, or "doughnut hole," and to provide more preventive care to people with Medicare.

Medicare Advantage plans will differ in how they respond to the lower subsidies. This will depend partly on the state and county where the plan is located and how much quality bonus money the plan receives.

The lower subsidies could mean that some plans may drop extra services such as eyeglasses and gym memberships. Some plans may raise their premiums and copayments. Others may even decide to leave the Medicare program.

Continue Learning about Healthcare Reform

How do I know if domestic partners are covered under my plan?
To find out if domestic partners are covered under your plan, check directly with your health insure...
More Answers
Does ACA cover acupuncture and other alternative medical therapies?
Joane GoodroeJoane Goodroe
The Affordable Care Act (referred to as Obamacare) include sections where acupuncture and alternativ...
More Answers
How does the Affordable Care Act help improve long-term care?
AARP Health EducationAARP Health Education
Consumers now have more information about nursing home inspections, complaints against facilities, a...
More Answers
Can I get tax credits to help me pay for health insurance?
AARP Health EducationAARP Health Education
You may be able to get tax credits to help you pay for the health insurance you buy in the exchange....
More Answers

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.