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Affordable Care Act (ACA) Facts: Follow this Series

There is a lot of speculation and discussion about what affect health care reform legislation, the Affordable Care Act (ACA), will have on seniors and more specifically, Medicare. We decided to do a series of blog posts about the facts; this is our second post, so please see Fact # 1 in a post dated, Feb 8, 2011.

Fact # 2 The ACA will reduce Medicare spending growth, extend Medicare solvency and is projected to reduce the budget deficit.

While Medicare spending will continue to grow, over the next 10 years the healthcare law will slow the overall rate of growth. Average spending per person will grow at about 2% per year, according to the Congressional Budget Office (CBO) this is compared to the current rate of 4% per person per year. This slight decrease will be a result of reductions in waste, fraud and abuse. ¬†The CBO also projects that the ACA will save Medicare about $400 billion over 10 years and will extend the solvency of the Medicare Trust Fund until 2026.

What you need to know:

In 2011, the ACA will slow payment increases that are made to Medicare providers such as, hospitals, nursing homes and home health agencies. Please note that doctors are not included in that group. The ACA does not reduce payments to your primary care doctor.

Also in 2011, payments to Medicare Advantage (MA) will be reduced. Approximately 25% of seniors are enrolled in MA plans, HMOs or PPOs offered by private insurance companies, the other 75% have traditional Medicare. The ACA will gradually lower payments made to MA plans, which on average cost 13% more than original Medicare. Another change that ACA makes to Medicare Advantage (MA) plans is that those plans will not be able to charge you more than what you would pay if you were on original Medicare for services such as kidney dialysis, chemotherapy, or skilled nursing home care.

Because of these laid out in the Law, MA plans may cut some of the extra benefits they offer that are not covered by traditional Medicare and some may increase their premiums. Please note that MA plans cannot cut any basic benefits under Medicare, such as doctor visits and hospital care. You will also have the same right to switch out of your MA plan to original Medicare, the new law will not affect your right to Medicare benefits.

Another way that Medicare savings will occur according to statements in the Affordable¬†Care¬†Act,¬†is for higher income individuals to pay higher prescription drug premiums. This will affect about 5% of Medicare recipients in 2011, single people with incomes above $85,000 and couples with adjusted gross incomes above $170,000.

The ACA states that in 2014 a Payment Advisory Board will be created. This board of experts will recommend specific ways to reduce Medicare costs without cutting benefits or increasing out-of-pocket costs.

Information in this blog was gathered from the Affordable Care Act,¬†¬†Congressional Budget Office, Centers for Medicaid and Medicare and the National Council on Aging.

For more information check out the following links:

A brochure from Medicare:

http://www.medicare.gov/Publications/Pubs/pdf/11467.pdf

Webpage from the National Association of States United for Aging and Disabilities (NASUAD):

http://www.nasuad.org/affordable_care_act/nasuad_materials.html

Answers from the National Association of Area Agencies on Aging (n4a):

http://www.n4a.org/advocacy/health-care-reform/

Straight Talk for Seniors from the National Council on Aging:

http://www.ncoa.org/public-policy/health-care-reform/straight-talk/

There is a lot of speculation and discussion about what affect health care reform legislation, the Affordable Care Act (ACA), will have on seniors and more specifically, Medicare.

Fact # 1 ACA will not cut your basic Medicare benefits.

There are actually some improvements to Medicare benefits as a result of ACA. One immediate improvement, according¬†to the Law,¬†is more help with prescription drug coverage. In Medicare prescription drug coverage there is something commonly referred to as ‚Äúthe donut hole‚Äù which refers to a coverage gap where seniors end up paying 100% of prescription drug costs. The new law helps you pay these costs right away. If you enter the donut hole this year, Medicare will send you a check for $250. You don’t have to do anything to get the check. It will arrive around 45 days after you reach the gap. In 2011, if you enter the donut hole, you’ll pay only half of what your plan charges for brand-name drugs‚Äîa 50% discount. By 2020, the donut hole will be slowly phased out and completely eliminated because of the Affordable Care Act.

Also as a result of ACA, a free annual well visit is now available in 2011. The free annual wellness checkup will allow you and your doctor to develop a prevention plan to keep you healthy. And a range of prevention services, such as cancer and diabetes screenings, will be provided free, no more cost sharing.

Another improvement related to the ACA, better care when you get sick! 80% of older Americans, have at least one chronic medical condition such as heart disease, high blood pressure, or diabetes. If you are one of them, you probably see several doctors, who may not always work together. The law will invest in testing new models of care for people with chronic conditions in order to provide better care, better coordination, and more patient-centered services. If you must be hospitalized, the law also will help you return home successfully, and avoid going re-hospitalization, by providing incentives for hospitals to make sure that you get the services you need in your community and by teaching you ways to take good care of yourself.

There are more facts that seniors need to know about how the new healthcare legislation will impact you and your Medicare coverage, stay tuned for more information from NJFA.

The information in this blog was gathered from language in the Affordable Care Act, the Center for Medicare and Medicaid and the National Council on Aging.