Ask most Medicare beneficiaries and they will likely not be able to explain how the Patient Protection and Affordable Care Act (known as the ACA) affects the Medicare program.
“There has been so much controversy swirling around the ACA that it can be difficult to wrap your arms around its impact on Medicare,” suggests Alan Weinstock an insurance broker at MedicareSupplementPlans.com.
While there is no single solution that will reduce the rate of growth in health care costs, the ACA employs a wide range of strategies to achieve a greater value, including provisions to:
1. Improve the quality of care
2. Reform our health care delivery system
3. Appropriately price services and modernize financing systems
4. Fight waste, fraud and abuse
ACA Impact to Medicare Program
While the ACA will impact health care in America in many ways, here are the major impacts it is expected to have on the Medicare program:
5. Extension of Medicare Trust Fund. Every year the trustees of the Medicare trust fund have to provide a report on the status of the fund. Because of the ACA it is now projected that the life of the fund will be extended to at least 2029. This is a 12-year extension over previous estimates. The extension is attributed to the reduction of waste, fraud and abuse along with a slowing cost growth in Medicare.
6. Reduction of Waste and Fraud. The Center for Medicare and Medicaid Services (CMS) has already taken a stance on reducing payment errors, waste, fraud, and abuse in the Medicare program with new programs such as the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program. The goal of this Administration is to reduce Medicare fraud by 50% by 2012. And the ACA includes a $350 million investment to prevent, detect and fight fraud.
7. Closing the Donut Hole. For Medicare beneficiaries hit hardest by the nefarious donut hole – the gap in Medicare Part D coverage – they will now get a 50% discount on brand name drugs. In addition, every year the cost of prescriptions drugs in the donut will decrease until the donut hole closes in 2020.
8. Coordination of Care. The overall quality and coordination of care is expected to improve in order to reduce preventable and harmful re-admissions to the hospital for the same condition.
9. Hospital Quality of Care. New, strong incentives will be implemented to improve the quality of hospital care by promoting Accountable Care Organizations.
10 Medicare Advantage Plans. Beginning in 2014 the ACA will limit the amount Medicare Advantage plans may spend on administrative costs, insurance company profits, and items other than health care.
The purpose of the ACA is to reform the Medicare program’s payment and delivery systems to incentivize high-quality care, appropriately price services, modernize the health care sector and fight waste, fraud, and abuse. As with any change, it may not be perfect, but for many it is a step in the right direction.
Medigap insurance can give what the original Medicare Supplement cannot and this is a very effective advantage of the Medigap insurance California.
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