Medicare and the Affordable Care Act

Abstract

The recently enacted Patient Protection and Affordable Care Act made modest changes to improve Medicare and obtained a substantial share of funding for the Act's broader reforms from future spending reductions in the program. Drug benefits and preventive services were improved. While painful, the spending reductions will have only moderate impacts on beneficiaries and should help achieve the goals of health care reform: encouraging better primary and preventive care, making providers conscious of finding ways to increase the productivity of care delivered and changing the relative levels of payment across certain providers. Additional costs to beneficiaries will arise from changes in private plan payments and increasing income-related premiums.