Prescription Drug Plan Cost Changes
The new health care law includes a significant number of changes that will affect Medicare over the next few years. Some of these changes go into effect on January 1, 2011. The most important changes that will affect people with Medicare coverage in 2011 involve prescription drug costs and out-of-pocket payments for preventive services.
If you already have Medicare benefits, you know that Medicare is health insurance for people 65 years of age or older, people under 65 with certain disabilities, and any person with permanent kidney failure that requires dialysis or a kidney transplant. There are different Medicare programs: Part A (Hospital Insurance), Part B (Medical Insurance), Part C (also known as a Medicare Advantage Plan), and Part D (Medicare Prescription Drug Coverage). The different parts provide Medicare coverage for different services. There are various Medicare premiums associated with the different parts of Medicare. Some people will qualify to get Part A Medicare benefits for free.
A Medicare Advantage Plan (i.e. Part C) functions like a PPO or HMO. It is a health plan run by a Medicare approved private insurance company. Medicare Advantage Plans typically include Parts A and B, and may offer other coverage options (such as Part D) for an additional cost. You may enroll in a Medicare Advantage Plan if you have Medicare Part A and Part B, live in the plan’s service area, and do not have permanent kidney failure. Enrollment in a Medicare Advantage Plan means you do not need to buy supplemental insurance such as a Medigap/Medicare Supplemental Plan.
Since Medicare Advantage Plans include Part A and Part B Medicare benefits, people with Part C benefits have Medicare coverage for the following services:
- Inpatient Hospital care
- Inpatient care in a skilled nursing facility or Religious Non-medical Health Care Institution (this does not include custodial or long-term care)
- Hospice care
- Medically necessary, part-time, home health care services
- Medically necessary outpatient care, including: doctor visits, lab tests, durable medical equipment, and other medical services
- Some preventive care services, including cardiovascular screenings, diabetes screenings, mammograms, screening for colon cancer, prostate cancer screenings, Pap tests, pelvic exams, and counseling to stop smoking for people who have not been diagnosed with a tobacco or smoking-related illness
- Emergency ambulance services
- Ambulatory Surgical Center services
- Clinical laboratory services
- Flu shots
- Glaucoma tests for people considered high-risk
- Wellness Exams
Other Medicare benefits do apply. Visit www.Medicare.gov to learn more about the particular services covered under Medicare Parts A and B, or for information on Medicare coverage under specific Medicare Advantage Plans.
There are several types of Medicare Advantage Plans. Different plans will have different Medicare benefits and premiums. All Medicare Advantage Plans are required to cover emergency medical and urgent care services. Medicare Advantage Plans also must provide all of the Medicare coverage options available under Original Medicare, except for hospice care. Many Part C plans will offer extra coverage for an additional cost. These extra options may include vision, hearing, dental, and wellness Medicare programs.
Under the new law, neither your eligibility nor your guaranteed Medicare benefits will change, and you do not have to change doctors. The law does provide, however, for additional Medicare benefits under many Medicare plans. For anyone with Original Medicare, starting January 1, 2011, most preventive care services will be provided at no cost and a free wellness check-up will be provided every year. This change does not apply to Medicare Advantage Plans, though many of these plans already offer free preventive services. The Centers for Medicare & Medicaid Services recommends you review your plan during the Annual Election Period (November 15 – December 31, 2010) to make sure your plan is still the best plan for you in light of the 2011 changes.
One of the biggest changes to Medicare brought about by the health care law is the gradual reduction of Part D’s “doughnut hole.” (The “doughnut hole” is a term that refers to the period each year when you have to pay the entire cost for your prescription drugs out of your own pocket.) In 2010, many people on Medicare received (or will receive) a $250 rebate check that was meant to help cover some of their out-of-pocket, drug-related expenses. In 2011, people on Medicare will receive a 50% discount on the price of their brand-name prescription drugs and a 7% discount on the price of generics during the doughnut hole period. After 2011, the discounts available during this period will grow larger until 2020, by which time your cost will be 25% of the full-price for all of your drugs.
The new law also provides for specific changes to Medicare coverage and Medicare benefits under Medicare Advantage Plans. Under the Affordable Care Act:
- Medicare Advantage Plans will be prevented from charging more than Original Medicare for chemotherapy, dialysis, and skilled nursing facility care.
- Costs to participate in a clinical research study may be lower than in previous years, and some costs may be covered that were not covered prior to 2011.
- A new annual cap applies to how much your Medicare Advantage Plan can charge you for Part A and Part B services. The annual out-of-pocket maximum may vary between Medicare Advantage Plans.
Due to the 2011 changes, you may want to review your plan during the Annual Election Period to make sure it is still the best plan for you. For additional information, visit www.Medicare.gov or call 1-800-MEDICARE.