Tag Archives: Medicare Prescription Drug

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.