While the ACA primarily is designed to provide affordable coverage to people not yet eligible for Medicare and without employer coverage, it also strengthens Medicare in a variety of ways, bringing down out-of-pocket costs for enrollees and extending the life of the Trust Fund:
- It expands coverage under the Medicare Part D drug benefit. In 2017, the ACA ensures that the millions of people with high drug costs–with total drug costs of more than $3,700–are not responsible for the full $1,250 of their drug costs before the Medicare Part D catastrophic cap kicks in at $4,950 in drug costs. Instead, people are only required to pay 40 percent of the cost of their brand-name drugs and 51 percent of the cost of their generic drugs. And, if this ACA protection remains, the amount they pay in the coverage gap or “donut hole” will continue to shrink to 25 percent of their drug costs by 2020.
- It requires that many Medicare preventive care services be covered in full, without a deductible.
- It extends the life of the Medicare Trust Fund by 12 years to 2029.
The Congressional Budget Office estimated in a June 2015 report that if the ACA were repealed, it would add $802 billion to Medicare’s costs over the ten-year period ending in 2025. The ACA reined in payment rates under both traditional Medicare and Medicare Advantage plans. Specifically, it reduced some provider payments in traditional Medicare. And, it reduced overpayments to Medicare Advantage plans so that they are no longer 14 percent higher than average per person costs under traditional Medicare, as they had been.