Senior Healthcare and the ACA: A Medicare Analysis
In our work with seniors and their families, we assist with Medicare analysis and advice, navigating the medical system and keeping families aware of vital issues regarding their senior healthcare and Medicare. As the Affordable Care Act (also known as Obamacare or healthcare reform) passed and provisions have been rolling out, we have written various articles on some of the key aspects of the bills for seniors. Recently we did a presentation reviewing the key provisions and realized this continues to be a "hot topic" on the minds of seniors, their families and their professional advisors.
Here is our analysis and summary of the Affordable Care Act's effects on Medicare recipients and important recent senior healthcare-related changes:
Current changes to Medicare (in effect now)
Medicare Home Health Face-to-Face Requirement: In order to qualify for Medicare to pay for home health care services (such as physical, occupational and speech therapy or intermittent skilled nursing), recipients must meet a number of criteria. In April 2011, CMS implemented a new requirement which states recipients must be seen by their doctor (or other designated healthcare professional such as a ARNP) for the reason the care is needed in order for the doctor to order the care (whereas before the doctor might not have seen the patient recently but might order the care based on history and information provided by the patient and family). This was designed as a fraud-reducing measure and many home health companies have developed processes to work with doctors on meeting the requirements; however, it can be burdensome for homebound patients and their care providers and may create a barrier for some to get care.
Senior Preventative Care: All preventative care is now provided at 100% under Medicare (no copays/deductibles), such as screenings and an annual wellness visit.
Medicare Income-Adjusted Premiums: Both Medicare Part B (doctor's visits, services) and Part D (prescription drugs) carry higher premiums for upper-income seniors. This applies to individuals with incomes above $85,000 and couples above $170,000 (for example, Part B's premium begins at $115.40 and could range up to $369 for someone in the $214,000 bracket).
Medicare Advantage Out-of-Pocket Limits: This provision required Medicare Advantage plans to limit enrollees' maximum out-of-pocket responsibility to $6700 per year.
Medicare Part D-Closing the "Doughnut Hole": The doughnut hole (coverage gap) in Medicare's prescription drug benefit is being phased out, until it goes away all together in 2020. This will mean that eventually, the prescription drug coverage that Medicare recipients receive will be more similar to what traditional insurance offers, with copays for share of costs that are similar over time. Currently, seniors get discounts during the gap period and the discounts will increase until they are standard throughout coverage.
Five Star Medicare Advantage Plan Exception: We have listed this as "ongoing" because these ratings contine to be updated and it is projected that more plans will work to gain five-star ratings because of this and other incentives (and penalties). This provision allows Medicare recipients to switch to any five-star rated Advantage plan in their area at any time during the year, not just during the usual enrollment periods. Right now, there are very few five-star plans and none in Florida as of this date.
Future changes and variables
Reimbursement changes for Medicare Advantage Plans: The Affordable Care Act targeted numerous changes to the ways these private Medicare plans are reimbursed. Plans that receive high quality-of-care scores will receive bonuses. And, starting in 2014, plans must spend between 80 and 85 percent of the money they receive on improving health care quality or delivering health care services to beneficiaries (and get penalties if not). Overall, there is going to be a gradual decrease in payments to these plans and many predict that less plans will therefore be offered. In 2012, the Medicare Advantare market remained remarkably stable/similar to 2011 but most of these changes have yet to begin.
Program savings/cuts?: Changes such as the cuts to Medicare Advantage payments mentioned above, accountable care penalties and structural changes are supposed to provide the savings needed to cover the additional costs under healthcare reform, but there are many variables in this equation. If savings do not materialize, the Independent Payment Advisory Board is authorized to make program cuts. There are a lot of variables and unknowns in this and other healthcare reform provisions.
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