Medicare is a federal program that provides health care to eligible older Americans. It’s funded through payroll taxes, beneficiary premiums and surtaxes from beneficiaries as well as general U.S. Treasury revenue.
Part A covers hospital inpatient services (formally admitted only) and skilled nursing facilities (after being formally admitted for three days and not for custodial care). Meanwhile, Part B covers outpatient services like most provider office visits even if they take place “in a hospital”, along with durable medical equipment.
The Affordable Care Act
On March 23, 2010, President Obama signed the Affordable Care Act into law, intended to expand coverage, control health care costs and enhance patient quality of care.
The Affordable Care Act (ACA) obliges insurers to cover a range of preventive services without charging deductibles or copays. Furthermore, it makes individual health insurance more accessible by providing subsidies for lower-income people to purchase a policy.
The Affordable Care Act (ACA) also extended Medicaid eligibility to millions of Americans, as mandated by the law and now adopted by three-quarters of states.
Part A of the Affordable Care Act (ACA) contains several critical elements, including:
Making Health Care More Affordable
The Affordable Health Care Act helps lower-income people purchase coverage by offering tax credits to pay their premiums. These credits are advanceable and refundable, available for incomes between 100 percent and 400% of the federal poverty level.
Protecting Americans with Preexisting Conditions
The Affordable Care Act (ACA) requires that all individual and family plans provide at least essential benefits, such as prescription drugs, maternity care and mental health services. It also prohibits insurers from setting annual or lifetime limits on benefits and canceling or limiting coverage for those with preexisting conditions.
Furthermore, the law creates incentives to motivate primary care physicians and other medical professionals to work in areas with a shortage of doctors or nurses. These financial benefits include scholarships and loan repayments for those employed in rural or underserved communities.
Part B of the Affordable Care Act amends Medicare in a number of ways, such as eliminating lifetime and annual limits on benefits, protecting guaranteed benefits from cancellation, decreasing out-of-pocket expenses for insureds and increasing preventive healthcare coverage. It also contains a provision that provides for temporary adjustments in premium calculations for part B plans and setting up an independent Medicare advisory board – all designed to bring down insurance costs while improving quality of care for all Americans.
Part D of the Affordable Care Act seeks to expand access to health insurance. It requires insurance companies to offer comparable policies at low rates to all, cover preexisting conditions and limit rate increases. Furthermore, it strives to prevent discrimination in accessing essential health services and increase coverage of essential medicines. It contains various subsidies and incentives like grants to states for setting up Exchanges as well as outreach and assistance for lower income populations.
The ACA also plays a significant role in correcting market failures, where one party or group of actors has an advantage due to asymmetric information. This can occur in the physician-patient relationship and advertising for prescription drugs that creates demand for products which are not necessary.