Obamacare and Medicare

The Affordable Care Act (ACA), also called “Obamacare,” goes fully into effect January 1. You’ve probably heard about the clunky federal website and some people complaining of higher premiums (although other people will enjoy lower premiums).

But if you are a Medicare recipient, will any of this affect you? And do you have to do anything different this year to be in compliance with the law?

We know that Medicare is vital to America’s seniors. We know that seniors face unique health care challenges, from the usual aches and pains to life-threatening diseases such as mesothelioma cancer, which is nearly always diagnosed in people over the age of 50. So the worries are understandable.

The short answer to the second question — do you have to do anything different this year — is no, you don’t. “Signing up for Obamacare” online or by phone is only for people who don’t have other insurance. If you are already on or eligible for Medicare, you wouldn’t be allowed to purchase a policy through the “Obamacare” insurance exchanges even if you tried. And if someone calls you or comes to your door to get you to “sign up for Obamacare,” it’s a scam. Don’t fall for it.

So, if you are enrolled in Medicare, you are square with the ACA. If you are happy with your current plan, you don’t have to do anything. If you want to make changes, you may do so during the annual enrollment period, just like any other year. This year, the enrollment period ends December 7.

What About My Benefits?

Most of the benefit changes have already happened. If you hadn’t noticed, that’s because you haven’t lost any benefits. A few benefits have been added over the past couple of years, including free cancer screenings. Further, for regular Medicare, your out-of-pocket costs for 2014 are not expected to be much different from 2013. This may or may not be true of Medicare Advantage plans, however, as discussed below.

What’s left? The dreaded “doughnut hole” in prescription drug coverage has been shrinking, and will continue to shrink. It’s supposed to be completely closed by 2020.

Wait a minute — just last year, politicians were saying that the ACA had cut $700 billion from Medicare. That’s true, but much of that $700 billion came from reducing waste and fraud. The ACA also made changes in the way Medicare health care providers are compensated, and it reduced overpayments to Medicare Advantage, which we’ll look at in a moment. But no benefits have been cut.

What About My Doctor?

Because Medicare reimbursements are getting stingier, there was real concern that doctors would drop their Medicare patients. That doesn’t appear to be happening with regular Medicare. According to a study released this year by the Department of Health and Human Services, the percentage of doctors accepting new Medicare patients is slightly higher now than it was in 2005.

Medicare Advantage

The picture for Medicare Advantage plans is murkier. Some Medicare Advantage customers are seeing substantial increases in premiums and co-pays. Others are finding that their doctors are no longer participating in their plans. It’s not clear whether the doctors are dropping the plans or the plans dropping the doctors.

However, this is not true of all Medicare Advantage plans. If you have a Medicare Advantage plan, it may be that nothing will change much from last year. It depends on the plan.

Medicare Advantage plans are partly subsidized by taxpayer dollars but purchased from private health insurance companies. The original idea behind Medicare Advantage was that competing private insurers would provide better service for less money than regular Medicare, run by the government.

However, that’s not how things worked out. The taxpayer subsidies paid to the private insurers were costing taxpayers as much as 12 percent more per policy than a regular Medicare plan.

The ACA provides that the subsidies to the private Medicare Advantage insurers will be gradually reduced, so that eventually taxpayers will be paying the same to subsidize a Medicare Advantage plan as for a regular Medicare plan. This is a big part of the $700 billion cut from Medicare, explained above. It seems some insurers are having trouble adjusting to these changes.

If you have a Medicare Advantage plan, by now you should have heard from your insurance provider about changes for 2014. If you aren’t happy, you can find out what other plans are available to you through the Medicare Plan Finder.