How the Health Care Law Affects Your Medicare Benefits
The health care law overhauls the entire health care system. If you’re a Medicare beneficiary, it’s important for you to know that the health care law doesn't cut or eliminate any of your Medicare benefits. In fact, the law enhances your benefits in several key areas, and it establishes a new Centers for Medicare & Medicaid Innovation to find new methods of improving services, outcomes, costs, and more.
There have been some changes in the past three years. More changes will take effect in 2013 and 2014. Here are some of the ways the health care law affects your Medicare coverage:
The “Donut Hole”
The law shrinks and eventually eliminates the coverage gap known as the donut hole for Medicare and Medicare Advantage beneficiaries enrolled in Medicare Part D prescription drug plans. This coverage gap occurred during the period of time when Part D medication costs for a person enrolled in a Medicare Part D prescription plan in a specific calendar year go over $2,830; it continued in that same specific calendar year until your out-of-pocket costs reached $4,550.
As originally approved, the cost of drugs acquired in a Medicare Part D prescription plan were entirely on the beneficiary while in the donut hole. Once you were out of the donut hole, Medicare picked up the remainder of your prescription drug costs for the remainder of that specific calendar year.
As part of the health care law, significant savings have been introduced to lower your costs. If you do not receive Medicare Extra Help, your medications are now discounted by these amounts when you are in the donut hole:
- Brand-name and biologic drugs — 52.5 percent
- Generic drugs — 21 percent
Over the next few years, additional discounts will further reduce the amount you will pay in the coverage gap, or donut hole. By 2020, the donut hole will be eliminated; you will then pay 25 percent of the cost of all your prescription drugs, no matter when you purchase them.
The amount this provision of the health care law saves you increases each year. By 2020, the average amount you will save will reach $3,000 per year.
The health care law makes preventives services more affordable. If you have Medicare, you no longer have to pay any cost-sharing fees, such as copays, for most preventive services. That means you do not pay for routine physical exams, certain cancer screenings (such as breast, prostate, cervical, and colon cancer screenings), bone mass measurements, and more.
Medicare Advantage Changes
Some provisions in the health care law affect Medicare Advantage (MA) — a type of health plan offered by private companies that contract with Medicare. Here are some of the changes that affect MA:
- The enrollment period for MA (with or without Part D prescription drug coverage) or a stand alone Part D plan changed under the health care law. Now you can only enroll in these plans each year during the six-week annual election period (AEP) from October 15 through December 7. That means you may no longer switch plans during the annual open enrollment period (January 1 through March 31).
- The health care law reduces funding to MA plans. This could eventually affect the benefits and number of plans available.
- CMS established new maximum out-of-pocket (MOOP) limits for Medicare Advantage HMO and PPO members. Once you reach this limit, you are not liable for any additional costs for services covered by Medicare parts A and B for the remainder of the calendar year. Here are the current MOOP amounts:
- HMO members: $6,700.
- PPO members: $6,700 for in-network services, and $10,000 for in-network and out-of-network services combined.
The amount you pay in out-of-pocket costs for medical (Medicare Part A and B) services, mental health services, and Part B drugs are applied to your MOOP. Part D drugs costs do not count toward the MOOP.
Let Us Help
Independence Blue Cross has a full array of health plans, including Medicare Advantage and Medigap plans, to meet your health care needs. We also have a dedicated website to help you navigate the changing health care environment. Our site — www.ibxmedicare.com — will help you compare plan options, find a pharmacy, learn about Medicare, understand how the health care law affects you, and more.
Also, each year, the Centers for Medicare & Medicaid Services (CMS) rates these health plans based on information gathered from members, health care providers, and health insurers. The ratings consider 50 different areas of health and drug coverage services, including:
- how well members rate a plan’s services and care;
- how well doctors detect illnesses and keep members healthy;
- how well a plan helps members use recommended and safe prescription medications.
A plan can get a rating from one to five stars. The stars show how well a plan performs and are designed to help you to easily compare one Medicare Advantage plan to another.
CMS has awarded our Keystone 65 Select HMO and Keystone 65 Preferred HMO plans a 4 Star rating, making them some of the highest quality plans in the five-county area.
Fewer than 25 full-time employees and average annual wages of less than $50,000.
The prescription drug coverage program offered under Medicare.
A Medicare program to help people with limited income and resources pay Medicare prescription drug program costs, such as premiums, deductibles, and coinsurance.
A method of cost-sharing in a health insurance policy that requires a group member to pay a stated percentage of all remaining eligible medical expenses after the deductible amount has been paid.
These services are covered under reform at 100 percent meaning without copayment, and they are valued as helping to improve overall health and reduce health care expenses. They include child immunizations, breast/prostate/cervical/colon cancer screening, bone mass measurement, and routine physical exams.
A retroactive cancellation that treats the coverage as void from the time of enrollment or a cancellation that voids benefits previously paid before the cancellation.
Any condition, illness, or injury for which medical advice or treatment was recommended or received before a person obtains health insurance. Examples include diabetes, heart disease, and cancer. Most health plans, even grandfathered ones, already may not deny coverage of or benefits to children under age 19 who have a pre-existing health condition; this extends to adults in 2014. Certain enrollment period limitations apply.
Part of traditional Medicare but offered through private insurance companies. MA plans can include a variety of health plans such as HMO or PPO, prescription drug plans, as well as wellness and prevention benefits. Approximately 10 million, or 25 percent of Medicare-eligible seniors are enrolled in Medicare Advantage plans.
A set of health care service categories that must be covered by certain plans, starting in 2014, including doctor office visits, hospitalizations, and prescriptions. Insurance policies must cover these benefits to be certified and offered in exchanges, and all Medicaid plans must cover these services by 2014.
An account that withholds pre-taxed income in reserve for health-related expenses. Expenses for over-the-counter medications and drugs (excluding insulin and doctor-prescribed medications) will no longer be a distribution used for qualified medical expenses, eligible for tax-free payment or reimbursement, effective January 2011.
An account that withholds pre-taxed income in reserve for health-related expenses. A tax penalty on distributions from HSAs that are not used for qualified medical expenses increases from 10 percent to 20 percent in 2011. Expenses for over-the-counter medications and drugs (excluding insulin and doctor-prescribed medications) will no longer be a distribution used for qualified medical expenses, eligible for tax-free payment or reimbursement.
An account that withholds pre-taxed income in reserve for health-related expenses. Expenses for over-the-counter medications and drugs (excluding insulin and doctor-prescribed medications) will no longer be a distribution used for qualified medical expenses, eligible for tax-free payment or reimbursement from any of these accounts, effective January 2011. A tax penalty on distributions from MSAs that are not used for qualified medical expenses increases from 15 to 20 percent of the amount includable in gross income.
An employee health spending account funded and owned by the employer. HRAs can be used to reimburse employees for certain qualified health services and expenses not covered by the company's health plan, including copayment, coinsurance, and deductibles. Funds remaining in the account at year-end go back to the employer. . Expenses for over-the-counter medications and drugs (excluding insulin and doctor-prescribed medications) will no longer be a distribution used for qualified medical expenses, eligible for tax-free payment or reimbursement.
A health plan under which an employer or group sponsor is financially responsible for paying plan expenses, including claims made by group plan members.
A gap in Medicare Part D prescription drug coverage that, under reform, provides recipients not already receiving Medicare Extra Help who reach the gap, with a one-time rebate for biologic drug expenses at varying rates: $250 in 2010, 50 percent of gap expense coverage in 2011, and additional discounts in successive years, until the gap coverage phases down to 25% in 2020.
The reform law establishes financial assistance, on a sliding scale for individuals and families with incomes from 133 to 400 percent of the federal poverty level, to help people buy coverage through the exchanges.
A national or state-by-state marketplace where consumers and small businesses can shop simply and quickly for health insurance, comparing products and prices. Exchanges would work with state insurance departments to set and enforce insurance reforms and protections. If a public plan is offered, it would be included in the health exchange, along with private insurance plans.
Individual and group health plans issued on or before March 23, 2010 are “grandfathered” and do not have to comply with some of the provisions of the new law. If an existing health plan changes, however, it my lose its grandfathered status.
Generally determined by the Internal Revenue Service as one of 5 highest paid officers, a 10 percent stakeholders in a business, or among the top 25 percent of employees ranked by compensation within a business. Fully insured group plans are prohibited from establishing eligibility rules for coverage that favor highly compensated individuals. The benefits under such plans may not discriminate in favor of this group either. Grandfathered plans are exempt.
A substance made from a living organism or its products and is used in the prevention, diagnosis, or treatment of disease. Biological drugs include antibodies, interleukins, and vaccines.