During the past year, we had to practically make daily revisions to this section due to the continuing debate on health care reform. However, in the spring of 2010, major new health care legislation became a reality and will affect all of our lives, hopefully in a positive manner.
LEGISLATION AND REFORM
Even though two-thirds of seniors disagree, some reform of our health care system is needed. The United States pays twice as much per capita for health care than any other industrialized nation and Medicare consumes 13% of the federal budget.
2010 HEALTH CARE REFORM ACT--HIGHLIGHTS
• DOUGHNUT HOLE
The closing of the infamous Doughnut Hole was a main legislative goal and progress was definitely made. Beginning in 2010, any Medicare Recipient who spends $2,830 on drugs throughout the year will receive a one time reimbursement of $250.
In 201l, anyone reaching this threshold will receive 50% off brand name drugs while they are in the Hole. After they spend a total of $6,440, they will pay only 5% of their drug costs. This discount will increase every year until 2020 when the total co-insurance percentage becomes a flat 25%.
• WELLNESS PHYSICALS & PREVENTATIVE TESTING
In 2010, all new Medicare enrollees receive a free one time “welcome” physical. Starting in 2011, the new law provides for a free “wellness” physical on an annual basis. Additionally in 20ll, annual preventative screenings for areas such as diabetes, blood pressure and specific cancers are free.
• MEDICARE ADVANTAGE PLANS
A reduction of $130 billion in subsidies to Medicare Advantage plans will be instituted over the next ten years. This action could potentially result in a reduction of benefits and an increase in premiums and co-pays. Furthermore, beginning in 2014 Medicare Advantage plans must spend 85% of all premium dollars on health care and cannot charge higher co-pays than regular Medicare on most services.
While your first impression could quite possibly be that Medicare Advantage plans will fall out of favor due to less governmental support, there are mitigating factors. The most important of these is that the government is going to assign “quality points” to Medicare Advantage plans based upon their performance. Those plans with governmental ratings of 3½ to 5 stars will receive increased reimbursements and this action could easily result in a higher quality of service.
It is too early to determine the effect this legislation will have upon the Advantage plans, but you would be well advised to carefully monitor changes to your plan in the coming year.
• SOLVENCY
Without the passage of the Health Care Reform Act, funding for Medicare would be insufficient as of 2017. However, this legislation provides for adequate funding through 2027.
The bottom line is that this legislation is certainly not the complete answer to health care problems, but it certainly is an initial step in the right direction.
LEGISLATION NEEDED
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There has been much consternation considering the voluminous changes brought about by the new legislation. However, there are several sections that concern Medicare and they are actually easy to comprehend.
