Unless you've been isolated from all forms of media for the last few weeks -and months, you're probably aware of the heated debate underway regarding the Patient Portability and Affordable Care Act (PPACA), often abbreviated ACA or Affordable Care Act. With some of the provisions of the law going into effect on January 1, 2014, people started to investigate their health care options available through state and federal health insurance exchanges and learn the fate of the individual insurance policies they had previously. It's sparked a national controversy, with members from both the far right and far left, along with many, many in between and those outside of party affiliations at all, expressing their views about the ACA.
Proponents and critics of the ACA each have strong reasons for their opinions, and there's a lot of discussion about people from different demographic groups -- one being the senior population, particularly Medicare beneficiaries. With all the speculation and opinions being reported in the news, it's no wonder seniors are confused about what they should be doing and what to expect. Here's a look at the major changes impacting Medicare, as well as opinions on the potential impacts from both viewpoints.
Is Medicare Losing Funding or Cutting Provider Payments?
The ACA includes $716 billion in cuts from Medicare payments between 2013 and 2022. Critics say this could be devastating to an essential healthcare program for our elderly citizens -- and one that was already on shaky ground. However, the Obama Administration says at last some of these funds are actually being reinvested into the Medicare program. For instance, the funds will be used to close the current "donut hole" that exists in the Medicare Part D prescription drug program, which has caused financial duress for many seniors since Part D was implemented.
Once a senior reaches the donut hole dollar amount in prescription drug payments, she is responsible for paying 100 percent of drug costs out-of-pocket until the upper threshold is reached. The current plan gradually closes this gap and the out-of-pocket costs for seniors, with a goal of eliminating it completely by 2020. In 2014, for instance, Medicare recipients reaching the donut hole will get a 47.5 percent discount on brand-name medications and a 21 percent discount on generic drugs. Those discounts will gradually increase until the coverage gap is minimized. However, U.S. News confirms that Medicare recipients earning more than $85,000 for an individual or $170,000 for a married couple -- about 5 percent of Medicare recipients -- will pay more for their Medicare Part D coverage.
Will Seniors be able to Keep Their Doctors?
The Medicare payment cuts impact payments to providers under the Medicare Advantage program, a program that has been experiencing steady enrollment growth for the past several years. Insurers providing these plans say that funding cuts have forced them to tighten networks, reduce benefits and increase the out-of-pocket costs for beneficiaries. This is one of the primary concerns noted by those who oppose further cuts to the Medicare program -- that more providers will withdraw from the program.
Opinions are split on whether doctors will pull out of the Medicare program. While reduced payments could certainly push some in that direction, the ACA includes other provisions as provider incentives. For instance, new programs will be implemented to help reduce hospital re-admissions through coordinated transitional care, as well as bonus payments to primary care physicians for certain services that will improve the quality of care. So while the ACA doesn't intentionally force physicians out of Medicare provider networks, some providers may make that choice on their own.
Will Medicare Premiums Increase?
A central point of the current heated debate is the cost of health insurance policies under the Affordable Care Act. When the ACA was introduced, one of the main motivators to implementing the law was to reduce healthcare costs while expanding coverage to millions of additional Americans. Now that the healthcare exchanges are open, some are finding the new plans to be more affordable while others have been hit with significantly higher out-of-pocket costs. The National Committee to Preserve Social Security and Medicare says Medicare recipients will actually save an average of $4,200 over the next 10 years in the form of lower prescription costs, free preventative care and reductions in healthcare spending across the board.
Since the ACA was implemented in 2010, premiums for Medicare Advantage plans have actually decreased by an average of 9.8 percent, according to the NCPSSM. But the Henry J. Kaiser Family Foundation paints a different picture, with 2014 premium projections showing a 14 percent increase over the 2013 rates.
Medicare Now Includes ACA Required Minimum Coverage
One of the most-discussed features of the ACA is that it requires everyone in the U.S. to have the same minimum amount of covered services, including those on Medicare plans. Seniors on Medicare will now have health insurance coverage for preventative care, such as wellness visits, without the former Medicare Part B co-payment. With open enrollment for the health insurance exchanges and Medicare happening around the same time, many Medicare beneficiaries were confused about whether they were required to choose a new health insurance plan.
All existing Medicare Part A beneficiaries are considered to meet the ACA's minimum coverage requirements, meaning they didn't have to select a new plan. In fact, Medicare beneficiaries shouldn't use the ACA healthcare exchange website at all. Instead, they should use the Medicare Plan Finder. Through February 14, 2014, Medicare Advantage beneficiaries may review their current plans, prescription drug coverage, premiums and deductibles and opt to switch to Original Medicare coverage. Anyone choosing to do so must select a Medicare Prescription Drug Plan by February 14th in order to receive Medicare Part D prescription drug benefits.
Medicare beneficiaries will now receive an annual wellness exam, most standard health screenings, such as those for diabetes and high cholesterol, as well as mammograms and colonoscopies, with no out-of-pocket costs. However, the free preventative coverage under Medicare Advantage plans may vary from plan to plan, as these are private plans sold from health insurance companies as alternatives to the original Medicare benefit.
Medicare Advantage Faces Most Uncertainty
There's a lot of information floating around the web about the ACA, littered with opinions, speculation, data and a mix of myths and facts. Even the same statistics and figures from the same study can look vastly different when analyzed from different views. But there is one thing the majority seems to agree on, and that is that among the senior population, those on Medicare Advantage plans face the most uncertainty. With no clear answer on how things will really shake out in terms of increased out-of-pocket costs, coverage and provider networks, Medicare Advantage beneficiaries could land on either end of the scale.
Much of these changes will depend on how the individual insurance company interprets the law and makes changes to those plans. Seniors on Medicare Advantage plans should review their benefits and costs carefully, and seek expert help if needed. No one wants to receive a surprise health care bill for thousands of dollars, especially seniors who are already on limited incomes.
President Obama is set to deliver his State of the Union Address tomorrow evening. His advisors have indicated that he'll focus on issues like income inequality, gun control and immigration. Some political commentators tend to think health care reform will be minimized in the President's speech this year due to the rocky rollout and ongoing controversy. Others, however, think he'd be ignoring the elephant in the room and must devote at least some time to discussing his signature legislative achievement and what Americans can expect in the coming months.
Do you think seniors will be heavily impacted by the Affordable Care Act? Share your opinions with us in the comments below.
Post by Angela Stringfellow