Health reform changes in the air for Medicare
When health reform passed, it included provisions targeting nearly everyone. In 2011, seniors will get their first taste of significant changes to the Medicare program as a result of health reform. While most changes are beneficial, some might find rising health insurance costs.
Medicare reforms save seniors money
The highest profile changes to Medicare health insurance are those that will put more money in seniors' pockets. Most notably, Medicare beneficiaries who find themselves in the so-called 'donut hole' can expect to receive 50 percent discounts on many brand name prescriptions beginning this year.
The donut hole demystified
The donut hole refers to the gap in coverage currently found in Medicare Prescription Drug Plans. When Medicare beneficiaries reach the donut hole, they must pay for the entire cost of their prescriptions out of pocket until the plan's catastrophic coverage begins. Health reform will phase in additional savings during the next decade until the donut hole is eventually closed in 2020.
An ounce of prevention...
For seniors, another main benefit of health reform is free preventive care. Starting Jan. 1, health insurance companies were prohibited from applying deductibles or co-payments to approved wellness services and programs, including:
- Personalized prevention plans
- Smoking cessation counseling
- Some cancer screenings
- Health risk assessments
- Obesity screenings
Saving government money with Medicare reforms
Health reform isn't just about saving seniors' money. Saving federal dollars in an already cash-strapped system is also high priority.
For instance, the reform looks to clip the wings of increasingly-popular Medicare Advantage programs. These programs offer an alternative to original Medicare and operate most often as PPOs and HMOs. Many seniors like Medicare Advantage health plans since they offer benefits not included in original Medicare, such as vision and dental.
In the past, the government has reimbursed Medicare Advantage plans with a higher amount than it pays for the care of original Medicare beneficiaries. To equalize the two forms of Medicare, payments for Medicare Advantage are being frozen at 2010 levels. While the change saves the government money, it may also mean plan premiums will be increased to compensate.
Income-based premiums to increase
The government also plans to reduce its costs by increasing the number of people charged income-based premiums in 2011. Those households with incomes greater than $170,000 for a couple or $85,000 for an individual may pay additional premiums on their Medicare Part B coverage ranging from an extra $115.40 to $253.70 per month. In addition, they will be required in many cases to pay an additional prescription drug coverage premium.
An Independent Payment Advisory Board will be convened to suggest ways to extend the life of the Medicare Trust Fund so additional changes may be forthcoming. But for now, it appears that Medicare beneficiaries can expect to see the greatest changes this year.