Let’s begin by discussing Medicare. In particular let’s look at the changes under comprehensive health care reform signed by President Obama in March of this year.
1. First, the act provides a rebate of $250.00 to Medicare beneficiaries who reach the Part D coverage gap (the donut hole) in 2010. This provision is effective as of January 1, 2010. Most Medicare drug plans have a coverage gap. This means that after you and your plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your drugs. (up to a limit). If you reach the Part D “donut hole” this year you will receive a one-time $250.00 rebate check from Medicare. You don’t have to do anything about it. There are no forms to fill out. Medicare will automatically send you this one-time only rebate check.
2. In 2011 if you reach the coverage gap you will receive a 50% discount when buying Part D covered brand name prescriptions drugs. The Medicare Part D doughnut hole will be eliminated by 2020.
3. Starting in 2011, Medicare will provide with no co-payment or deductible an annual wellness visit to develop and update your personal prevention plan based on current health needs.
4. The Medicare Advantage (MA) program is significantly restructured. Today Medicare Advantage receives over $1,000 more per person than original Medicare. These additional payments under MA will be reduced and gradually eliminated. If you receive your Medicare under a MA plan you will still receive Medicare benefits but the optional benefits such as vision and dental care under MA plans will probably be also eliminated.
5. The law establishes an Independent Payment Advisory Board (IPAB), which will have authority to make recommendations for Medicare cost-savings. The recommendations will take effect if Congress does not enact an alternative proposal that achieves the same cost savings. The board cannot make any recommendations that will impact premiums or benefits.
6. The law also ties Medicare Part D premiums to income, and will move more Part B and Part D beneficiaries into higher-income categories – meaning higher premiums.
There are additional matters under the new law to discuss with regard to Medicaid, Long-Term Care, and Nursing Homes but we will save that for future blogs.