The Impact of Repealing PPACA on Savings Needed for Health Expenses for Persons Eligible for Medicare THE “DONUT HOLE”: In 2003, the Medicare Prescription Drug, Improvement, and Modernization Act

of 2003 (MMA) added outpatient prescription drugs as an optional benefit. When the program was originally enacted, it included a controversial feature: a coverage gap, more commonly known as the “donut hole. ” The Patient Protection and Affordable Care Act of 2010 (PPACA) included provisions to reduce this coverage gap. REPEALING PPACA: This article examines the impact that repealing PPACA would have on savings targets for health care expenses in retirement. The estimates suggest that retirees with high levels of prescription drug use throughout retirement would see their savings targets increase roughly 30‒40 percent were the coverage gap reduction in PPACA repealed. Individuals at the median (midpoint) level of prescription drug use throughout retirement would not see any change in savings targets. The Importance of Defined Benefit Plans for Retirement Income Adequacy VALUE OF DB PLANS: This article shows the tremendous importance of defined benefit plans in achieving retirement income adequacy for Baby Boomers and Gen Xers. Overall, the presence of a defined benefit accrual at age 65 reduces the “at-risk ” percentage by 11.6 percentage points. LOW- AND MIDDLE-CLASS IMPACT: The defined benefit plan advantage (as measured by the gap between the two at-risk percentages) is particularly valuable for the lowest-income quartile but also ha