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Medicare
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Insurance Costs

Learn About the Affordable Care Act

Highlights

  • Beginning in 2011, you will have no out-of-pocket costs for preventive services services such as annual physicals, colorectal cancer screenings, and mammograms.

Changes that Reduce Out-of-Pocket Costs for Seniors

Reducing out-of-pocket costs for seniors

Offering new prescription drugs

Starting in 2014, the Medicare prescription program (Part D) will cover new drugs that improve your health such as those to stop smoking. This will keep you healthier and save Medicare money.

Covering prescription drug costs

If you are in Medicare Part D for prescription drugs, your costs for prescriptions may have looked like this before the ACA:

  • 100% of your first $310 in prescription drug costs.
  • 25% of your costs between $311 and $2,830.
  • 100% of your costs between $2,831 and $6,440.
  • Medicare pays the rest of the cost of all prescription drugs past $6,440.

The coverage gap in your Medicare prescription drug coverage between $311 and $2,830 is commonly called the 'donut hole.' The Affordable Care Act takes several steps to close this gap. You will pay only 25% of the cost of all your prescription drugs by 2020.

Step 1: 2010

You received a $250 rebate check in the mail if this happened:

  • You fell into the gap, and
  • You did not receive any other help paying for prescriptions through programs such as Medicare Extra Help or your state's Medicare Savings Program

Step 2: 2011

In 2011, while in the gap, you paid:

  • 50% of the cost of brand-name prescription drugs
  • 93% of the cost of generic drugs

The percent you pay while in the gap will decrease every year as follows:

Year % You Pay for Brand-Name Drugs % You Pay for Generic Drugs
2012 50 86
2013 47.5 79
2014 47.5 72
2015 45 65
2016 45 58
2017 40 51
2018 35 44
2019 30 37

In 2020, the payment levels will be dropped, and instead you will pay 25% of the cost of all your drugs, with no donut hole.

Step 3: Between 2014 and 2019

The amount you must spend on prescription drugs before your Medicare coverage kicks back in will be lowered annually.

Free preventive services

You no longer have out-of-pocket costs for preventive services. These include:

  • Annual physicals
  • Colorectal cancer screenings
  • Mammograms

No-cost to you preventive services includes everything that the U.S. Preventive Services Task Force has given an A or B rating. The complete list can be found here.

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