Three million Medicare beneficiaries receive checks from the government

Maryalene LaPonsie | January 20, 2011

When it comes to the discussion on health reform, the spotlight has been firmly planted on the health insurance mandate scheduled for 2014. While the mandate may be considered the 'main event' of the Patient Protection and Affordable Care Act (PPACA), it is only part of a comprehensive overhaul of the U.S. health insurance system. Among other reforms, the legislation included plenty of perks for seniors and Medicare beneficiaries.

Closing the "donut hole"

The changes to Medicare health insurance include some provisions that might never be noticed by seniors, including bonus payments to health care providers offering primary care services to Medicare health insurance recipients. However, one benefit that certainly won't be overlooked by seniors is reduced prescription drug costs.

Currently, Medicare beneficiaries with high prescription drug needs hit a coverage gap. The gap occurs after they have exhausted their regular benefits but before catastrophic coverage kicks in. For some, that translates into thousands of dollars in out-of-pocket costs.The coverage gap, also known as the "donut hole," was identified as a problem almost immediately after Medicare Part D was enacted in 2003 to provide prescription drug coverage. It wasn't until the PPACA was passed that legislators found the political will to make a change, however.

Starting in 2011, seniors and other Medicare beneficiaries who hit the donut hole will receive a 50 percent discount on certain brand name prescriptions. The discounts will be expanded to generics in the future and gradually increased until the donut hole is closed entirely in 2020.

The check is in the mail for U.S. seniors

For those who hit the donut hole in 2010, the government is mailing $250 checks to offset some of the out-of-pocket costs. The rebate check is a flat amount, and everyone who hit the donut hole receives the same amount regardless of how much they spent on prescriptions last year.

According to the Department of Health and Human Services (HHS), three million checks have been mailed so far. The money is being automatically sent to eligible individuals; there is no application or paperwork to complete to receive the rebate.

More Medicare health insurance changes on the way

Of course, the lowered prescription drug costs are just one of many changes that will impact Medicare health insurance in the coming years. Seniors and other Medicare beneficiaries can also look for these four key developments:

  1. Free annual wellness visits
  2. Free preventive care such as certain cancer screenings
  3. Improved coordination of care to prevent repeat hospitalizations
  4. Limitations on Medicare Advantage plans that will reduce administrative costs and increase spending on direct patient care
The HHS estimates that these changes will save those enrolled in original Medicare health insurance an average of $3,500 during the next ten years. Seniors with high prescription drug costs can expect to save an estimated $12,300 during the next decade.

Overall, the PPACA has been hailed by such organizations as the AARP as a step forward in the quality of care for seniors and vulnerable populations. As politicians and American citizens continue to debate the virtues of health reform, it seems certain that seniors will enjoy reduced costs for at least the time being.

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