Medicare Glossary

Definitions for common Medicare terms

patient protection and affordable care act (PPACA)

DEFINITION: The Patient Protection and Affordable Care Act (PPACA) – also known as the Affordable Care Act (ACA) – is the landmark health reform legislation signed into law by President Barack Obama in 2010. Key provisions extended coverage to millions of uninsured Americans, implemented measures to lower health care costs and improve system efficiency, and eliminated insurance industry practices that included rescission and denial of coverage due to pre-existing conditions.

The bulk of the ACA’s insurance provisions applied to the individual market and small group market, but the law also imposed some new regulations on the large group market, and on large employers. And some provisions directly affected Medicare.

Like the implementation of Medicare in 1965, the Affordable Care Act represented a major shift in US health care regulation. Learn about the similarities (and differences) between LBJ’s landmark Medicare legislation and the ACA.

The ACA imposed funding cuts on Medicare Advantage plans, to bring federal spending on those plans into line with what the government would spend if those enrollees were in Original Medicare instead. There was speculation that Medicare Advantage enrollment would drop as a result, but enrollment had been steadily increasing every year since 2004, and that trend continued after the ACA was enacted.

For seniors who have Medicare Part D prescription coverage, the ACA included a provision to close the donut hole by 2020, so seniors have been seeing increasingly large discounts on medications purchased while in the donut hole.

Before the ACA was implemented, seniors who were recent immigrants — and thus not eligible to purchase Medicare — had few options for health insurance coverage. But the ACA made it possible for recent immigrants over the age of 64 to purchase individual market coverage, with premium subsidies based on income.