The purpose of the Affordable Care Act (ACA) was to make healthcare more affordable. It has had various effects on Medicare, including eliminating the drug coverage gap (donut hole) and improving coverage.
According to the Centers for Medicare and Medicaid Services (CMS), more than 68 million people in the United States are enrolled in Medicare.
The main goal of the Affordable Care Act (ACA) has been to provide affordable healthcare to everyone in the United States. To that end, the ACA made various changes and improvements to the Medicare program.
In 2010, President Barack Obama signed the ACA (also known as Obamacare) into law. This marked an overhaul of the U.S. healthcare system. Before the ACA, many people were uninsured due to exclusions based on preexisting conditions, a lack of affordability, high out-of-pocket costs, and coverage limits.
The ACA affects nearly every aspect of the U.S. healthcare system, including:
Read more about the Affordable Care Act.
The ACA has various provisions that are designed to improve and strengthen Medicare. The ACA aims to sustain Medicare for years to come by:
The ACA also aims to improve coverage in various ways, including:
As of 2025, the donut hole has been replaced with an out-of-pocket spending cap due to both the ACA and the Inflation Reduction Act (IRA).
When someone with Medicare Part D reaches $2,000 of out-of-pocket expenses, they automatically enter catastrophic coverage. This means they pay nothing for their prescriptions for the rest of the year.
Previously, when a person with Part D coverage reached a certain amount of out-of-pocket costs, they would enter the coverage gap or donut hole. While in the donut hole, they were responsible for 100% of the costs of their prescription drugs until they reached the set limit and entered catastrophic coverage.
The ACA also made another change to Medicare that involved providing each enrollee with an annual wellness visit. During this visit, individuals can update or develop a personalized plan to help prevent disability or disease based on their current health or risk factors.
During the first year a person has Medicare Part B, they can get a free “Welcome to Medicare” preventive visit. They can then use the annual wellness visit each year.
The ACA also aims to encourage prevention by making it less expensive for people to keep healthy. As part of this goal, the ACA eliminated the coinsurance (the percentage of treatment a person must self-fund) for preventive services such as:
Preventive services also include shots and vaccines such as those for:
Learn more about what Medicare covers.
To be eligible for Medicare, you must meet the following requirements:
If a person does not have Medicare, is not eligible for Medicare, or does not have health coverage through another means, the Healthcare Marketplace can help them find insurance coverage that fits their budget and needs.
Individuals are eligible to enroll in coverage through the Marketplace if they:
People cannot buy a Marketplace plan if they already have Medicare. It may be possible for them to choose a Marketplace plan instead of Medicare, but generally, this is not the case.
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
The ACA has made various changes and improvements to the Medicare system. For example, it eliminated the prescription drug donut hole, provides free annual wellness exams, and eliminated coinsurance on preventive services.
If a person is not eligible for Medicare, the Health Insurance Marketplace can help them find health coverage that meets their needs and budget.
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