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Far-reaching changes to Medicare are on the way. Details are still emerging on the provisions of the mammoth healthcare reform legislation, and TSCL is still reviewing it to learn how Medicare beneficiaries will be affected. The law contains some new benefits for seniors, but TSCL is concerned that they could be outweighed by new costs and taxes. Healthcare reform cuts more than $450 billion from Medicare over the next ten years and it remains to be seen just how many seniors will actually benefit and by how much. Here are just a few of the key provisions that will affect your benefits:
• “Closes” the “doughnut hole” coverage gap: The legislation gradually closes the “doughnut hole” that seniors fall into once they have spent $2,830. Seniors who hit the gap this year would receive a $250 rebate, but filling the hole will take ten years. To learn more, see “How Will Closing the Medicare Part D Doughnut Hole Work?”
• Raises Part D premiums for seniors with incomes exceeding $85,000: Seniors with modified adjusted gross incomes exceeding $85,000(individual) and $170,000 (couples) already pay higher Part B premiums for their doctor’s visits. Starting next year, they will also pay higher Part D premiums as well. In addition, the legislation fixes the income levels for both Part B and Part D for the period of 2011 through 2019. That means more seniors will pay the higher premiums over time as incomes gradually go up. A senior with a modified adjusted gross income as low as $65,000 for tax year 2009, and whose income increases as little as 3.2% per year, is at risk of paying the higher Medicare Part B and D premiums by 2019.
• Cuts payments to Medicare Advantage Plans: Some 10 million beneficiaries enrolled in Medicare Advantage plans face reduced benefits, higher premiums and co-pays. The legislation gradually reduces subsidies to the plans to provide benefits. To learn more, see “Social Security & Medicare Questions” on the back page.
• Drops co-insurance for certain preventive services: Starting in 2011, beneficiaries will pay no co-insurance for new annual wellness exams and a personalized treatment plan. The new plans will set up a screening schedule for the next 5 to 10 years and cover recommended services like mammograms and colonoscopies with no co-pay. However, in order to qualify for zero co-pay, preventive services must meet new government established guidelines, and the screenings must also receive a certain “grade” assigned by the U.S.
Preventive Services Task Force. Recently that same Task Force created a firestorm of controversy, saying that women over 40 with no family history of breast cancer did not need to get annual mammogram screenings until they turned fifty, and women 50 and over only require mammograms every other year.
TSCL believes it’s simply too early to say whether healthcare reform will help the majority seniors and people with Medicare. Implementing the new law will be a monumental task. Ineffective cost controls, loopholes and weak enforcement could turn the new law into a Pandora’s box of higher costs for seniors and taxpayers.
Sources: “Companies Say Health Care Costs Hard to Swallow,” Josh Funk, The Associated Press, March 26, 2010. Summary of Provisions, The Patient Protection and Affordable Care Act, Congressional Budget Office, March 24, 2010.
