When Obamacare was designed, it had aspirations that all Americans would have health insurance coverage, regardless of age, income level or health. As we know, the act has been hotly contested and challenged all the way to the U.S. Supreme Court. But there have been some casualties. The health-law coverage gap, an unfortunate consequence of amends to PPACA, is one such casualty.

Before we move into how and why, let’s first understand what we mean by the health-law coverage gap. Rewinding back to 2010, Obamacare was designed to provide health insurance to the underprivileged through a two-pronged approach – new federal subsidies and expanded Medicaid program. For people earning up to 138 percent of the federal poverty line, Medicaid was to be expanded for covering their health insurance requirements. For people in 138 – 400 percent of the poverty line, the law proposed federal subsidies that could be attained while enrolling through federally facilitated marketplaces.

State Exchange

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Insurance companies, which had once spent millions to repeal the Healthcare Act fearing that the Affordable Care Act will adversely affect their businesses subject to increase in healthcare costs and reduced coverage, witnessed a surprising upturn in their profit margins. From a report released in October 2011 by the Government Accountability Office (GAO) we infer that contrary to popular reservations, healthcare law aided insurers in garnering increased Medicare revenues and appreciable profit margins.

The report collected and compared financial performances – 18 months before and after the healthcare proposal was signed into a law – of some of the top health insurers in the U.S., such as UnitedHealth Group, WellPoint, Aetna, Humana and Cigna.

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The Affordable Care Act (ACA) has introduced new measures to further fortify the Medicare health care plan for senior citizens.  The revised Medicare health plan provides preventive medical care benefits, offers discounts on prescribed drugs, and improves the controversial ‘Donut-hole’ coverage gap.

How the new plan benefits you?

Since January 1, 2011, Medicare has seen the introduction of many preventive care policies and benefits that include yearly wellness visit, counseling sessions for tobacco discontinuation and various free medical screenings.

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The Patient Protection and Affordable Care Act (PPACA) was passed amidst a lot of fanfare on one hand and a lot of fear and dismay on the other. The folks from the latter half feared, amongst other things, that these new health reforms would take away or reduce their Medicare benefits. However, if one examines the Act, you will find that to be far from the truth.

Let’s address 2 critical issues that have been worrying a lot of people.

1. The reforms will adversely affect my prescription drug coverage
Incorrect. The reforms will positively impact the beneficiaries of the Medicare prescription drug plan or the Medicare Advantage plan who hit the coverage gap. In 2011, when the beneficiaries hit the dreaded ‘donut hole’, they are eligible for discounts of about 50% on brand name drugs and about 7% on generic drugs. As a matter of fact, these discounts will keep increasing until the coverage gap is closed in 2020.

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