The Affordable Care Act (ACA), signed into law in 2010 by President Barack Obama, includes new regulations for most Americans. Patricia Barry, senior editor of the AARP Bulletin and author of the upcoming Medicare for Dummies, explains what seniors should know about—and can expect from—the health care legislation.
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How does the ACA affect seniors’ prescription costs?
“The law gradually closes the dreaded coverage gap—the ‘doughnut hole’—in which [before 2011] people with Medicare Part D drug coverage had to pay 100 percent of their drug costs out of pocket,” explains Barry. “That percentage has already been cut to less than 50 percent and will continue to decrease until 2020, when people will no longer pay more than 25 percent.”
How does the law affect seniors’ taxes?
With the ACA, individuals earning more than $200,000 a year or married couples filing jointly earning more than $250,000 already saw a 0.9 percent increase in the Medicare payroll tax beginning in 2013. Barry explains that seniors who elect to work beyond age 65 and who earn above these levels are liable to that extra tax. “Starting in 2016, taxpayers age 65 and older who file itemized tax returns can take deductions for medical expenses only if the expenses exceed 10 percent of income [up from 7.5 percent today], which brings them into line with younger taxpayers, for whom this threshold was raised Jan. 1, 2013.”
What about the ACA don’t most seniors know but should?
“To a large extent, the health plans available through the exchanges are modeled on the health plans available to all federal workers,” says Barry, “including the president and members of Congress.”
To learn more about how the Affordable Care Act affects the senior populations, please visit AARP.org.