Obamacare and Medicare Advantage: What You Need to Know

Tamera Jackson by Tamera Jackson | Licensed since 2007

This article was updated on: 09/15/2018

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The Affordable Care Act (ACA), enacted in March 2010, is sometimes nicknamed “Obamacare” for the president who signed it into law, Barack Obama. Obamacare is known for establishing the health insurance marketplace at healthcare.gov. Obamacare is also known for expanding the Medicaid program and preventing most insurance plans from excluding people for pre-existing conditions. Some parts of this comprehensive health care reform law affected Medicare Advantage plans. Here’s what you need to know about Obamacare and Medicare Advantage.

Obamacare and Medicare Advantage plans: some things didn’t change.

The passage of Obamacare allowed Medicare Advantage to function fundamentally as it had before. Medicare Advantage, also called Part C, is another way to way to get your Original Medicare (Part A and Part B) benefits through a private insurance company approved by Medicare. Medicare Advantage plans got their name in 2003 with the passage of the Medicare Modernization Act (MMA). According to the National Institute of Health (NIH) private insurance plans like Medicare Advantage should give beneficiaries a choice of health-care coverage and utilize efficiencies and cost savings achieved in the private sector. Some Medicare beneficiaries choose Medicare Advantage plans because these plans may offer benefits original Medicare doesn’t cover, such as routine dental, routine vision, and prescription drug coverage. Most Medicare Advantage plans are HMOs (health maintenance organizations). Some Medicare Advantage plans may advertise $0 plan premiums but with Medicare Advantage you must continue to pay your Part B premium (and Part A premium if applicable).

Obamacare and Medicare Advantage plans: healthcare.gov Marketplace.

If you want a Medicare Advantage plan, you don’t need to do anything with the Marketplace during Open Enrollment when other people are signing up for Obamacare since Medicare Advantage is not part of healthcare.gov. To get a Medicare Advantage plan you must contact the private insurance company that sells the plan or use a private health insurance exchange like eHealth. You can enroll in Medicare Advantage during your 7-month initial enrollment period for Medicare Advantage. This enrollment period begins three months before you turn 65, includes the month of your 65th birthday, and lasts for three months after your turn 65. If you qualify for Medicare because of a disability, this initial enrollment period begins the first three months before your 25th month of getting Social Security or Rail Road Retirement board disability benefits, includes the 25th month of getting disability benefits, and ends three months after your 25th month of getting disability benefits.

Obamacare and Medicare Advantage plans: cuts to Medicare Advantage plans.

According to the National Institute of Health (NIH), the Affordable Care Act (ACA) included significant cuts to Medicare Advantage plan payments. Over a three to six year phase-in period, the legislation reduced some plan payments while rewarding some plans that provided high-quality care.  Plans are eligible for bonuses and rebates depending on quality performance. In 2011, the NIH predicted that some plans would be forced to shut down as a result of the payment reductions, thereby decreasing beneficiaries’ access to plans. Despite this prediction, Medicare Advantage enrollments have increased. In 2017, 34.6 percent (20.4million) of Medicare beneficiaries were enrolled in Medicare Advantage plans. This is a marked increase since 2009, pre-Obamacare, when Medicare Advantage enrollment was 23 percent (10.5 million) of Medicare beneficiaries.

Medicare Advantage plans may still be affordable despite Obamacare cuts

According to the Kaiser Family Foundation, the average premium for a Medicare Advantage plan with prescription drug coverage was $43.48 a month in 2018. Combined with the mandatory Part B premium cost of $134 in 2018 (which can vary based on income), you could be paying about $177 a month for a Medicare Advantage plan with prescription drug coverage.

Would you like to know more about Medicare Advantage and Obamacare? I’d be happy to help you. I can walk you through your options or email you information; you can request that using the links below. Or take a look at plans by clicking the Compare Plans buttons on this page.

Benefits, premiums and/or copayments/co-insurance may change on January 1 of each year.

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