Two Sets of Hands Filling Out Paperwork


Charles Kennedy Sept. 15, 2010

The short answer is that the changes to Medicare are mostly fringe changes. Even so, since so many of us live on tight budgets the changes made may well be important to you. Mostly the changes should extend coverage and make health care more affordable, unless you have a high income.

Some things are too big or too new to get a handle on easily.   This statute is one of those things. There are lots of good news articles about the bill. The biggest expectation I have is that there are going to be lots of issues to work out. Anytime substantial change is made to the law, there will be parts of it that are contested in court until we learn how the law will actually apply.

Many parts of the statute are going to be filled in by regulations prepared by Federal agencies. It is going to take time for the administrative structure to be built so the changes can be put into effect.

I expect that the statute will extend the time that Medicare is solvent.  Due to the many disagreements about the statute, no one will know what will result until all the regulations are published and the court fights settled–and I suppose the political ones too. Your guess is just as good as mine when it comes to politics.

First, each Medicare insured who reaches the Part D coverage gap will receive $250.00 this year to apply to the costs of prescriptions.

Next year, 2011, the drug manufacturers must discount every prescription for a brand name drug by half that is filled while you are in the coverage gap. This coverage gap is commonly called the Donut Hole.

Beginning in 2013 there will be a subsidy on brand-name drugs purchased in the coverage gap. The subsidy will be phased in over the period 2013 to 2020 so that by 2020 the subsidy will be 25% of the cost in addition to the manufacturer discount.

On the other hand, the discount on generic prescriptions purchased while in the coverage gap of 75% will be phased in beginning next year.

Medicare will cover an annual wellness exam in full, no co-payment or deductible.

A new Medicare tax will be applied to persons with an income of more than $200,000.00, and married couples with incomes of more than $250,000.00.

The Part D premium will be tied to income. More beneficiaries of both Part B and Part D will be moved into higher income categories, and will thus have to pay higher premiums.

Medicare Advantage is a program Congress started to get the insurance companies to provide more services for people with chronic conditions or illnesses. It has been very popular. These policies received a large subsidy that was about $135.00 per month per beneficiary more than standard Medicare. Under the new statute, that subsidy will be eliminated over a period of time. Enough for now I will blog soon on other changes to Medicaid, long-term care and the health system in general.