Tag Archives: Medicare Plans

How Healthcare Reform Will Affect Medicare

How Healthcare Reform Will Affect Medicare

On March 23, 2010 the Patient Protection and Affordable Care Act, better known as healthcare reform, was signed into law. Medicare beneficiaries have had many questions about how their benefits will be affected by the new legislation. For most people on Medicare, the changes will be transparent, and their benefits will continue to be delivered as they always have. The cost of the improvements in healthcare will be largely covered by reductions in fraud and waste in the system and by the elimination of the Medicare Advantage subsidies that have been in place up to this point. Below are some specific changes that Medicare beneficiaries can expect to see with the new law.

Medicare Part D

Currently, Medicare prescription drug plans have a coverage limit of $2,850. When drug costs reach that limit, consumers enter the "donut hole" and are obligated to pay 100% of the cost of their prescription medications. Customers stay in the donut hole until they have paid $3,610 in out-of-pocket costs, at which point they qualify for catastrophic coverage. Under the new law, the donut hole will gradually be eliminated between now and 2020. Starting in 2010, anyone entering the donut hole will receive a $250 rebate. In 2011, there will be a 50% discount on name-brand drugs while in the donut hole and a 7% discount on generics. The discounts will increase annually until the donut hole is gone.

Medicare Part B

Under Medicare right now, seniors pay a $155 annual deductible for Medicare Part B, which is the medical insurance part of Medicare. Beneficiaries also pay 20% of the cost for preventive care, including any tests or screenings, and annual physical exams not covered. In 2011, the 20% co-pay for preventative screenings for things such as cancer and diabetes will be eliminated. Also starting in 2011, an annual physical will be covered at no cost to the patient.

Medicare Advantage

Medicare Advantage plans were put into place in an attempt to privatize Medicare and have Medicare benefits provided by private insurers rather than the government. Medicare has been paying insurers a 10% subsidy which will be eliminated in 2012. Since this will result in greater costs for the insurance companies, it is likely that some plans will disappear, some will have higher premiums and others will have reduced benefits. Plans that are determined to be high quality by Medicare will receive bonus payments, however, that will offset the loss of the subsidy.

There are other changes to Medicare resulting from the new healthcare legislation, but these are the ones that seniors are most likely to be affected by. It is important for anyone aging into Medicare to read up on the benefits they are entitled to and to know what to expect. Detailed information on all aspects of Medicare can be found online at Medicare.gov.

What to Expect with New Medicare Supplement Changes

What to Expect with New Medicare Supplement Changes

With the Medicare Prescription Drug Improvement and Modernization Act of 2003 taking effect June 2010, Medicare supplement plans will undergo several major changes. This will include the elimination of four current plans for new enrollments and the addition of two new plans. The new plans are designed to lower out-of-pocket expenses for consumers and provide for additional benefits.

Medicare supplement plans, which are also known as Medigap plans, are meant to cover the out-of-pocket costs associated with Medicare Parts A and B. Individuals qualify for Medicare health insurance if they are 65 years of age or older, or if they are eligible to receive benefits due to a disability.

Currently, there are twelve different supplement plans, which are labeled Plans A through L. While the plans all share the same benefits, premiums for the plans vary according to the issuing insurer.

Medicare Supplement Plan Additions And Changes

The two additional plans that will be added are labeled as Plans M and N.

Plan M is also similar to the current Plan F in terms of benefits with several important changes. Plan M will cover only half of the Part A annual deductible ($1,100 for 2010) and none of the Part B annual deductible ($155 for 2010). Also, it will not cover any Part B excess charges. Plan M is expected to cost around 15% less than Plan F.

Plan N will offer a similar benefit structure to the current Plan F. Differences include a $20 co-payment for visits to the doctor and a $50 co-payment for emergency room visits. Like Plan M, it will not cover the Part B deductible nor offer Part B excess coverage, but will cover 100% of the Part A deductible. With these benefit changes, Plan N will cost approximately 25% less than Plan F.

All Medicare supplement plans will now include a hospice care benefit. In addition, Plan G will now cover 100% of Part B excess charges versus its current 80% coverage.

Eliminated Medicare Supplement Plans

Plans E, H, I and J will no longer be offered. Also, preventative care and at-home-recovery benefits will also be removed from Plan G. According to government studies these benefits were seldom used and deemed unnecessary.

All seniors are strongly encouraged to review their current plans. Specifically, they should check with an agent to learn about lower rate options and whether or not their current plans will be affected by the change.

It’s important to note that if you have a Medicare supplement plan currently, you can stay enrolled on it due to a grandfathering clause and your benefits won’t change. However, since these plans will no longer be offered to the public, future rates are likely to be higher than with the new modernized plans.

Have a Medicare Supplement Here is What You Need to Know

Have a Medicare Supplement Here is What You Need to Know

Most likely if you are Medicare aged (65 or older) you have received something in the mail talking about the “changes to Medicare supplements” and “the need for immediate action”.  I want to clear the air as to what is happening and what you do and don’t need to do.

Medicare supplements are changing, as part of the MMA 2003 (Medicare Modernization Act of 2003).  The current Medicare supplement that you may have is what is referred to as “standardized” plans.  They were designed by Medicare and have been basically the same since 1992.  Medicare has changed a lot in the past 18 years, but the supplements have remained virtually the same.  The new design was approved in 2008 and all supplements applied for and issued with effective dates of 6/1/10 or later will be of the “modernized” design.

A question that I have been getting asked is is this part of the new health care reform law that was signed into law by President Obama.  The short and long answer is no.

As a part of this modernization of the Medicare supplement plans, there are some plans that will not be offered for new sales after 6/1/2010 due to them being identical to other plans and there is no sense in two plans looking alike.  Plans E, J, H, and I will not be sold after 6/1/10 since they will look just like other plans.

If you want to keep your current plan, you can choose this route, and in some circumstances it may be more beneficial for you to do that. Medicare supplements are “guarantee renewable” which means that YOU are the only person that can cancel it and once it was issued to you it can’t be changed in any way.

The two new plans that are being added to the lineup of Medicare supplements are plans M and N.

The new lineup will be A, B, C, D, F, High Deductible F, G, K, L, M, and N. In addition some of the plans will lose benefits.  For example, plans D and G lose at-home-recovery since it is a benefit under Medicare it did not need to be covered as an “extra” item under Medicare supplements.  Plan G’s benefit for excess charges will go to 100% from 80%.  All plans gain Hospice as a core benefit.  Not all carriers will offer all Medicare supplement plans.

So there are the facts. Now, what do you need to do?

  • Be careful when talking to someone who says you need to act immediately.
  • You can stay right where you are at, or you can change plans or carriers.
  • If you invite an agent in to show you the new plans listen carefully and then take a day or two to think it over.

Making a decision to change plans or companies is a mathematical decision when taking into account the premiums paid vs. the benefits gained or lost.  It is also a personal decision and should not wholly rely on the “plan that your neighbor or friend has”.  Each individual is unique and has a unique situation.  You should seek the advice of a competent insurance professional.