Got Medicare? Health care reform and you
WASHINGTON (6/2/10)--If you're retired or getting close, you may wonder how the new health care law will affect your Medicare coverage. The complex plan has a long phase-in, but you'll see at least two changes immediately.
Starting Jan. 1, 2011 you no longer will have co-pays for certain preventive services. And if you fall into the prescription drug coverage gap called the "doughnut hole" in 2010, you'll get some help (NPR May 18).
Your existing basic traditional Medicare or private Medicare Advantage benefits will not change, some benefits will improve, and, contrary to rumor, your health care won't be rationed (The Daily Star May 1). Beyond the basics, the new law, called the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act, will affect you in these ways over the long haul:
- Bye-bye Part D prescription-drug doughnut hole. Medicare recipients now pay 25% of prescription-drug costs, up to $2,830 a year. After that, recipients pay 100% of prescription-drug costs until out-of-pocket spending reaches $4,550. At that point, Medicare recipients again pay only 25% of the drug costs. The gap between $2,830 and $4,550 is the doughnut hole. If your expenses fall in the doughnut hole in 2010, you will receive a one-time payment of $250. Starting in 2011, you'll be able to buy brand-name drugs in the coverage gap at 50% of the current price. The doughnut hole will gradually phase out and be eliminated by 2020. The new law also improves the Extra Help program that reduces drug costs for lower-income Medicare enrollees.
- Hello preventive care. Once you're a recipient of traditional Medicare, you won't have a co-pay for annual physicals, preventive services, and most screenings. If you're in Medicare Advantage, you'll have to check with your plan to see if these services are free.
- Hmm...early retirement? Starting 90 days after it is enacted, until Jan. 1, 2014, the act creates a temporary reinsurance program for employers. The program provides retiree health insurance coverage to former employees age 55 and older who are not yet eligible for Medicare. You most likely will see reduced premiums or deductibles.
- Warning on Part B and Part D premiums. The new law freezes income thresholds for income-related Part B health-insurance premiums from 2011 to 2019. That means if you are high income ($85,000 for a single person or $170,000 for married couples filing joint tax returns), you could see a Part B premium surcharge. You'll also pay higher premiums for drug coverage, starting in 2011 (income thresholds same as for Part B).
- Watch Medicare Advantage. Medicare Advantage costs the government 14% more than traditional Medicare and provides more generous benefits. This is where the government intends to find about $135 billion of the $455 billion the reform purports to save over the next 10 years. If you're covered by Medicare Advantage, your costs could go up or your benefits could be reduced--or both. Your plan may even choose to leave Medicare.
Of course this list is not complete. If you have a chronic medical condition such as heart disease, high blood pressure, or diabetes, the law will help you get the patient-centered care you want and need. If you need long-term care, the new law will make it easier to get and pay for your care at home. There will be no changes to Medigap supplemental insurance and you won't be required to buy a private Medigap policy.