Medicare Advantage 101: New policy series explains Medicare Advantage and its role within the Medicare system.
Today marks the thirteenth anniversary of the Affordable Care Act (ACA). The landmark health law introduced significant access and affordability reforms, including new insurance Marketplaces for individuals and critical Medicare and Medicaid modernizations. These policies have improved care and lowered costs for millions of Americans.
In recognition of the anniversary, the Biden administration released a new report highlighting the law’s enrollment gains. It finds that as of early 2023, more than 40 million people have ACA-related coverage, the highest total on record.
Nearly 16 million of these consumers have Marketplace plans, while 19 million (across 38 participating states and the District of Columbia) were enrolled in Medicaid due to the ACA’s eligibility changes, which allow states to cover low-income adults.
A large and growing body of research shows those who gained coverage are healthier and more financially secure as a result. In a review of the literature focused on the ACA’s Medicaid expansion, the Council of Economic Advisors found substantial benefits for individuals, families, and states. In part, they note the evidence “shows that Medicaid expansion improves insurance coverage and overall health. Medicaid expansion also improves the financial outlook for recipients and provides long-term benefits for children that last generations.”
For those who don’t qualify for Medicaid or Medicare but struggle to afford insurance, the ACA’s premium tax credit subsidies for Marketplace coverage have been a lifeline. Recently extended by the Inflation Reduction Act (IRA), this assistance has helped over 80% of older adult Marketplace enrollees find an affordable plan, and saves older consumers $950 a year, on average. The IRA’s continuation ensures even more people will have access to affordable, high-quality plans.
The ACA also improved coverage and benefits across insurance types. For people with Medicare, it made preventive care services available at no cost and prescription drugs more affordable. In addition to the enriching the beneficiary experience, these changes fortified the program, allowing subsequent policies to build upon an even stronger foundation. For example, the ACA restructured Part D to close the donut hole, reducing beneficiary exposure to out-of-pocket costs. This allowed the IRA to go further, by capping beneficiary copayments at $2,000 a year, limiting monthly insulin prescriptions to $35, and expanding eligibility for the full Part D Low-Income Subsidy (LIS). Similarly, the IRA made additional preventive care—Part D vaccines—available without cost-sharing; separate administration proposals would extend no-cost Medicare coverage to other treatments, like PrEP.
Presciently, the ACA also sought to bolster Medicare solvency through Medicare Advantage (MA) payment refinements. Those efforts align with the proposals in the 2024 Advance Notice that aim to curb excessive MA overpayments. As Medicare Rights outlined in our template and own comments, the amounts overpaid to MA plans total billions of dollars each year, costs that are borne by and to the detriment of beneficiaries, taxpayers, and Medicare. While comprehensive reforms are needed to address the full range of MA financing flaws, the modest payment accuracy and insurer accountability improvements in the 2024 Advance Notice represent a critical step forward. We urge the administration to finalize these proposals without delay.
The ACA remains a cornerstone of improved health care access, quality, and affordability. The Medicare Rights Center celebrates its anniversary while also looking to Congress and the administration to continue to advance its aims through improvements in equity and education to ensure that all consumers can access the care and coverage that is right for them.
Read the administration’s enrollment report here.
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