Impact of Patient Protection and Affordable Care Act on Medicare Programs – Health System Example

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'Impact of Patient Protection and Affordable Care Act on Medicare Programs' is a wonderful example of a paper on the health system.   Medicare is a health insurance cover that offers payment for health services to citizens who are 65 years and above, to persons who are under the age of 65 and are permanently disabled as well as to individuals of all ages who are terminally ill with renal disease (Kaiser family foundation, 2015). It embraces four parts whereby A is Hospital Insurance whereas B medical insurance and eventually Parts C as well as D or the prescription drug coverage (CMS. gov, n.d). This paper will focus on the impact that the Patient Protection and Affordable Care Act (PPACA) will have on Medicare programs as well as other policies that affect the Medicare program.

This is in line with the patient PPACA appended by President Obama in March 2010 (Congressional Research Service, 2010). Impact of PPACA on Medicare programs Largely, the PPACA will affect the Medicare programs financially than in any other way. Since the overall spending of Medicare drops significantly (Kaiser family foundation, 2015). In addition, the act will focus on improving the quality of services offered to the beneficiaries. Effect of PPACA on free-for service method in Medicare programs Prior to this act, Medicare used to offer a fee-for-service basis whereby payment rates offered to practitioners and physicians were set every year factoring the inflation and other factors (Congressional Research Service, 2010). However, according to the act, the setting of these rates should follow the parameters set by Congress (Congressional Research Service, 2010).

This is following the report as well as suggestions, which the congress receives from MedPAC in March every year.

Hence, ensures enhancement of efficiency in line with the hopes of numerous beneficiaries of the Medicare program. Impact of PPACA on Acute care Hospitals The Act ensures that payment rates in acute care Hospitals are regulated so that no payment increases will be made unnecessarily (Congressional Research Service, 2010). The act also seeks to ensure that the payment structure is in line to address the issue of inefficiencies in treatments.   This will greatly ensure the efficiency and fairness of payment in these hospitals. Through PPACA, there is keen interest to reduce Medicare spending in a span of 10 years (Congressional Research Service, 2010).

The realization will be via factoring annual increases in economic productivity especially Part A payments. Hence, in the long-term, the move will see a significant decline in Medicare expenditure in these hospitals, which results in increased savings. Impact of PPACA to Skilled Nursing Facilities (SNFs) According to the CRS (2010), the PPACA will affect the payment structure of the Skilled Nursing Facility updated annually by the Prospective Payment Services (PPS). This payment structure factors the inflation rate, area wages and the location, which is reviewed annually.

The MedPAC through the provisions of the act reviewed this and recommended that further updates to the payment be ceased from the year 2010. This was due to the affirmation the payment of SNFs was receiving was more than adequate (Congressional Research Service, 2010). This will significantly yield to the overall decline in terms of Medicare spending. Impact of PPACA on the rise of the cause of health care Obviously, some of the proposals in the PPACA act aim to reduce the Medicare expenditure at once, but others have a direct impact on the growth rate of expenditure (Foster, 2010).

This is via implementing making alterations in regards to Medicare payment adjustments, which in turn will yield to a large growth rate of Medicare overheads. Furthermore, incorporating an independent payment advisory board serves a critical task in influencing Medicare cost diminution (Foster, 2010). Impact of PPACA on the availability of medical care to low-income earners beneficiaries According to Foster (2010), Part D Medicare policies propose that higher income earners pay much higher premiums than low-income earners.

This way the beneficiaries of Medicare who earn little income will be supplemented by the extra premiums paid up by the higher income earners.   Other policies concerns on Medicare program Medicare Advantage program Another way for Medicare beneficiaries to access the medical benefits is through the utilization of the private health plan. This plan is provided to each person so as to ensure an all-inclusive benefit for persons who enroll in it (Teitelbaum & Wilensky, 2013). Before the act, the amount to be covered by the Medicare advantage its computation encompassed comparing the cost of the plan (Bid) and the maximum Medicare amount one supposed to pay (Benchmark) (Teitelbaum & Wilensky, 2013). In the case of a bid, suppose the plan is lower than the Benchmark, then the bid is paid and what remains is for rebates.

These rebates are used to cover those benefits that are not covered by the original Medicare plan (Teitelbaum & Wilensky, 2013). on the hand if the bid exceeds the benchmark then Medicare covers the maximum care and the balance is paid by the beneficiary. With the emergence of the PPACA, the way the Medicare advantage plan amount was calculated changed increasing the amount of benchmark with respect to the quality of the plan (Teitelbaum & Wilensky, 2013).

This way the benefiting would access better plans and the provider could provide better plans. Medicare prescription drug benefit A previous act had created an outpatient prescription drug benefit on a voluntary basis and is the prescription drug plan also offered through the private prescription plan (Congressional Research Service, 2010). This plan is available under the Medicare advantage plan, which constitutes part C. Under the PPACA, the monthly payment for higher-income beneficiaries under Plan D was increased (Congressional Research Service, 2010).

Also under this act, an agreement freely reached with the pharmaceutical companies where they will offer a 50% discount to plan D beneficiaries. This discount is applicable to brand name drugs and this, however, will be up to a time when the coverage gap is sealed (Congressional Research Service, 2010). Conclusion Medicare programs have been in existence since 1966 and after many years, the population of beneficiaries has tremendously increased. The expenditure costs of Medicare have been on the rise as the years go by.

Hence, being the reason why congress emerged with the PPACA to address the issue of these costs. The Act has gone a long way to reducing the increment of cost as well as ensuring quality care provided to beneficiaries.


(2010). Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline. Congressional Research Service. Retrieved from

(2015). Medicare, Primer. Kaiser Family Foundation. Retrieved from

Foster, R.S. (2010). Estimated Financial Effects of the 'Patient Protection and Affordable Care Act,' as Passed by the U. S. Senate on December 24, 2009.Baltimore: Diane Publishing.

(n.d). Medicare Program-General Information. Centers for Medicare and Medicaid Services. Retrieved from Information/MedicareGenInfo/index.html

Teitelbaum, J. B. & Wilensky S. E. (2013). Essentials of health policy and law. Sudbury, Mass: Jones & Bartlett Leap.

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