What effect, if any, will Health Care Reform have on you and your Medicare Insurance?
It doesn’t matter if you are pro health care reform or con health care reform. What matters is whether the Affordable Care Act will affect your Medicare Benefits and if so, how?
Basic Medicare benefits will not be eliminated under the new law. The new law will actually add to and improve some benefits. Starting in 2011 an annual wellness exam and health screenings for diabetes and cancer are covered by Medicare at with $0 cost or co-pay.
What about drug coverage? Good news there as well. For those of us on multiple , costly prescription drugs, the Part D donut hole looms large. The law started effecting Medicare Part D in 2010 with the $250 rebate for those who went into the coverage gap on their drug plan. In 2011 you will receive a 50% discount on name brand drugs during the coverage gap. Over the next nine years the donut hole will be closed little by little each year. By 2020 there will be no more coverage gap.
The rate of growth of Medicare spending will be slowed by provisions contained in the new law. Lowering the growth rate from it ’s current 6.8% to a projected 5.5% over the next ten years will save Medicare over 400 billion dollars. Some of these provisions are:
One change will be a reduction in the increase of payments to health care providers, including but not limited to nursing homes and hospitals. Some of these providers have already agreed to these changes, knowing that the greater number of insureds will drive their profits.
Originally seen as a cost saving strategy for Medicare, it turns out that Medicare pays up wards of $1,100 more per beneficiary in an Advantage Plan than for original Medicare. This extra cost is being funded by elevated premiums by people with Medicare. The over payments to the MA plans will be lowered by the new law. The goal being that the MA plans cost Medicare the same per person as original Medicare.
How will the reduced funding to the Medicare Advantage plans impact the 25% of Medicare recipients who are enrolled in them? You may experience a loss of extra benefits that are included in your current plan. The private plans will always have to cover the benefits that Medicare guarantees however, so you will not loose any of your basic benefits. Some plans may just not be offered at all. Should your plan leave the Medicare system, you will have the option to enroll in a new plan or go back to original Medicare.
The reduced spending along with additional revenue from taxes paid by people who make 200K+ per year are anticipated to achieve a $124,000,000,000 deficit reduction over the next decade and extend the life of the Medicare Trust Fund for nine years.
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