If you’ve been frightened by all the gloom and doom talk in Washington about the future of Medicare, the good news is that the Affordable Care Act (ACA) actually strengthens the health care program for seniors and offers preventive services that should boost your health. The act also starts to close the so-called and much maligned “donut hole” for prescription drug costs, which should boost your pocketbook.
By pledging to reduce waste, fraud and abuse, and slow Medicare cost increases, the ACA also extends the life of the Medicare Trust Fund, which manages Medicare, from 2016 to 2024. The ACA makes other promises to ease fears about Medicare. Traditional Medicare-covered benefits cannot be reduced or taken away, and Medicare Advantage Plans, which are private insurance plans, must continue to provide traditional Medicare benefits. Further, Medicare spending reductions should not result in rationing care, reducing or changing benefits or eligibility, or increasing co-pays or premiums.
Among other reforms, the ACA intends to provide hospitals with new incentives to improve the quality of care and, starting in 2014, to offer additional protections for Medicare Advantage plan members by taking steps that limit the amount these private plans spend on administrative costs, insurance company profits and services other than health care.
Closing the Drug “Donut Hole”
Before the ACA, as a result of the infamous Medicare Part D “donut hole,” or coverage gap, Medicare recipients received assistance paying for medications only up until a certain dollar amount and then had to pay for drugs out of pocket until they reached another dollar amount. The ACA closes the donut hole over the next 10 years and provides financial help until the gap is fully closed. In June 2010, the government mailed $250 rebate checks to help seniors pay for their medications, and in 2011, seniors received a 50 percent discount on approved brand-name prescription drugs. While in the donut hole, seniors also get a 7 percent discount on generic drugs. In 2013, the Part D coverage gap starts at $2,970 and extends to the catastrophic coverage threshold of $4,750.
While in the coverage gap here’s what you’ll pay for drugs up until 2020, when the gap is closed.
• 2013: 47.5% for brand-names and 79% for generics
• 2014: 47.5% for brand-names and 72% for generics
• 2015: 45% for brand-names and 65% for generics
• 2016: 45% for brand-names and 58% for generics
• 2017: 40% for brand-names and 51% for generics
• 2018: 35% for brand-names and 44% for generics
• 2019: 30% for brand-names and 37% for generics
• 2020: 25% for brand-names and 25% for generics
To improve seniors’ overall health, under the ACA, Medicare allows a free annual wellness exam and covers certain preventive services, such as nutrition therapy, without charging the Part B coinsurance or deductible.
As of 2012, the annual wellness visit benefit includes the following services:
• Routine measurements, such as height, weight, blood pressure, and body mass index
• Review of individual medical and family history
• Review of the beneficiary’s medications, supplements and vitamins
• Discussion of care from other health care providers
• Review of functional ability and level of safety (for example, risk of falling at home), including any cognitive impairment, as well as a screening for depression
• Personalized health advice that takes into account risk factors and specific health conditions or needs, including weight loss, physical activity, smoking cessation, fall prevention and nutrition
• Referrals to other appropriate health education or preventive counseling services that may help minimize or treat potential health risks
Under the ACA, Medicare covers many preventive services, including counseling for tobacco-use cessation, whether or not you have been diagnosed with an illness caused or complicated by tobacco use. (However, if you have been diagnosed with a tobacco-related illness, the co-insurance and deductible will apply.) See sidebar for a list of services and screenings that Medicare covers.
You may have to pay co-insurance for the office visit when you get these services. If you’re in a Medicare Advantage Plan, check with your plan to see if these benefits will also be free for you.
Other Provisions of the ACA
Medicare fraud, including billing seniors for services that weren’t performed, can cost billions of dollars each year. To fight this waste of money, the ACA allocates $350 million to fight fraud as well as provisions that go after those who defraud the system.
The ACA also protects the society’s most vulnerable. The Elder Justice Act, part of the ACA, provides approximately $500 million (of $770 million for the act) from 2010 to 2014 for adult protective services. The federal government provides previously unavailable support and resources for state-based adult protective services and prosecution of crimes against the elderly. The act also addresses nursing home care, requiring skilled nursing facilities under Medicare and nursing facilities under Medicaid to disclose information regarding ownership, accountability requirements and expenditures. Such information will be standardized and published on a website so that Medicare enrollees can compare nursing facilities.
Future of Medicare
While Medicare seems secure for now, the future could bring serious conflicts: the government’s attempt to rein in the budget, rising health care costs, baby boomers reaching Medicare age and a dwindling pool of younger people to pay for Social Security and Medicare.
Some options to maintain Medicare include raising Medicare premiums and co-pays for higher income beneficiaries and/or raising premiums for everyone. Other ideas under consideration are requiring drug companies to give rebates or discounts to Medicare, increasing co-pays and out-of-pocket costs for home health care and nursing homes and generating new revenue by increasing payroll taxes.
However, Harry (Rick) Moody, director of academic affairs for AARP in Washington, D.C., says the question is, “What is your goal? To save money or make people healthier?”
AARP’s view is that it’s possible to save money in the Medicare system. “We can do that in ways that don’t harm beneficiaries but benefit them,” for example, reduce “revolving door” hospital discharge plans, where people are prematurely discharged, get sick and are readmitted again.
Other ways to decrease Medicare costs are to reduce medical errors and eliminate procedures such as surgeries and screenings that have no benefit, he says. By reducing costs, health care can also improve.
In the United States, two of the biggest problems with health care are overtreatment and wrongful treatment, Moody says. “The harm caused by overtreatment is endemic in the health care system.” For example, many heart patients are advised to take aspirin to prevent strokes, but aspirin can cause macular degeneration, and some biopsy procedures have risks. “People are not adequately apprised of risk potential.”
At the same time, the ACA takes a big step toward preventing serious and costly illnesses, such as breast cancer or diabetes, by including preventive measures in its coverage. In fact, the Independent Payment Advisory Board created by the ACA, consisting of 15 medical experts (nominated by the president and approved by the Senate), could be part of the discussion. If Medicare spending exceeds the growth rate of the economy plus one-half percent, the board must make recommendations to reduce spending.
Whatever happens with the budget discussion, Medicare, at 21 percent of the budget in 2011 (along with Medicaid and the Children’s Insurance Program), will be part of the debate.
“Seniors and the Affordable Care Act,” webinar for Society for Certified Senior Advisors,® Jan. 24, 2013, by Robert Semro, policy analyst for Bell Policy Center, http://www.csa.us/AffordableCareAct
How Stuff Works: http://people.howstuffworks.com/5-ways-seniors-benefit-from-affordable-care-act.htm