Many seniors and their families are concerned that Medicare changes in the new health reform legislation – the Patient Protection and Affordable Care Act signed into law on March 23, 2010 by President Obama – will decrease their benefits or somehow weaken the program.
Medicare provides health insurance coverage for more than 45 million Americans – about 38 million seniors (age 65 and older) and an additional seven million younger people with certain types of disabilities, including end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant).
The new law makes several changes to Medicare that most likely will improve your benefits and, depending on where you live, your access to primary care services. These changes will start this year (2010) and be fully phased in by 2020.
Medicare Part D Prescription Drug Plan
The health reform bill makes several significant changes to the Medicare Part D drug benefit to reduce your out-of-pocket costs when you reach the Part D coverage gap, or “donut hole.”
If you have a Medicare Part D prescription drug plan, the coverage gap is when Medicare temporarily stops paying for your prescriptions. If you are in the coverage gap, you have to pay 100% of the costs of your medications.
For example, in 2010, if you have a Medicare Part D drug plan, your initial drug coverage limit is $2,830. Once you reach $2,830 in total drug costs, you will be in the coverage gap (donut hole) and you must pay the full cost of prescription drugs until your total out-of-pocket cost reaches $4,550. The amount you are responsible for in the donut hole increases each year.
If you are enrolled in a Part D plan, the health reform law will reduce the amount that you must pay for your prescription drugs when you reach the donut hole.
What you can except if you are enrolled in Medicare Part D:
- This year (2010), if you have expenses in the coverage gap, you will receive a $250 rebate check from Medicare.
- Beginning in 2011, if you reach the donut hole, you will be given a 50% discount on the total cost of brand name drugs while in the gap. This has been agreed to by pharmaceutical companies.
- Over time, Medicare will phase in additional discounts on the cost of both brand name and generic drugs while you are in the donut hole.
By 2020, these changes will effectively close the coverage gap and rather than paying 100% of the costs, your responsibility will be 25% of the costs.
Medicare Advantage Plans
Almost one out of four people eligible for Medicare are enrolled in Medicare Advantage, a type of health plan offered by a private insurance company that is approved by Medicare. Medicare Advantage plans receive payments from Medicare to provide you with the benefits covered by traditional Medicare, including Part A (hospital) and Part B (physician and outpatient services).
Most Medicare Advantage plans include Part D coverage (prescription drug benefits) and many offer extra coverage, such as vision and hearing care, dental services, and health and wellness programs. When you join one of these plans you pay a monthly premium in addition to your Medicare Part B premium, which is usually deducted from your Social Security check.
Medicare Advantage Premiums May Increase
Medicare Advantage plans cost the federal government more than traditional Medicare and some in Congress have concerns that private insurance companies that offer these plans make too large of a profit. In 2012, Medicare will start to decrease the subsidies to these plans.
If you are enrolled in a Medicare Advantage plan, you may have to pay a higher premium or deal with reduced benefits. However, these plans cannot reduce any of the benefits that you would normally receive from traditional Medicare.
Your Medicare Advantage Plan Can Get a Bonus
Medicare maintains a 5-star quality rating system for health plans, which you can review online or in Medicare & You – the yearly benefit booklet you get from Medicare. Beginning in 2012, Medicare will provide bonuses to Medicare Advantage plans receiving four or more stars. This is important information for you to know; you can be assured that your plan is well run and provides high quality service, and the bonus may help hold down premium increases or the elimination of benefits.
Preventive Care
Medicare currently pays for a “Welcome to Medicare” checkup, which includes a review of your health, and counseling about preventive services. Medicare will only cover this initial preventive health service if you get it within the first 12 months of enrolling in Medicare. Additionally, prevention services including glaucoma tests, mammograms, and prostate cancer screening are subject to cost-sharing expenses such as deductibles, copayments, and coinsurance.
Beginning in 2011, Medicare will pay for an annual checkup, including a physical examination and a total elimination of cost sharing for appropriate preventive services and screenings.
Access to a Primary Care Physicians
Depending on where you live, you may either have a more difficult time or an easier time finding a primary care physician (PCP). There is currently a shortage of PCPs in many areas of the U.S., especially in rural areas and in communities with a higher percent of seniors. When the health reform bill is fully implemented more than 32 million additional Americans will have health insurance, which will place an added burden on PCPs.
To help improve this problem, Medicare will provide a payment bonus of 10% to primary care physicians and to general surgeons practicing in areas with a significant shortage of physicians. This will be in effect from 2011 through 2015.
