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Older Adults and Health Care Reform
On Sunday, March 21, 2010, the U.S. House of Representatives passed the Patient Protection and Affordable Care Act (H.R. 3590), which President Barack Obama signed into law on Tuesday, March 23. This comprehensive health care reform bill previously was passed by the Senate on December 24, 2009, and contains a number of provisions which affect older adults. These provisions are listed below. (GSA also offers a downloadable version in PDF format.)
- Payments to Medicare Advantage (MA) (Part C) plans will be reduced to make them equal (on average, per beneficiary) to payments through traditional Medicare. Medicare Advantage plans provide Medicare benefits through private insurance plans rather than through traditional fee-for-service Medicare run by the federal government. On average, MA plans have received $135 more per beneficiary per month than the traditional fee-for-service Medicare. Although the bill will cut MA payments, there are no provisions for cuts to mandated benefits; as a result of the payment reductions, MA plans may cut extra, optional benefits such as vision and dental. The provisions for equalizing payments between MA plans and traditional Medicare are based on a recommendation by the non-partisan Medicare Payment Advisory Commission (MedPAC), and supported by advocates for Medicare beneficiaries such as the Center for Medicare Advocacy. One purpose of these provisions is to extend the life of the Medicare Trust Fund which, without some intervention, is projected to be depleted in 2017. These provisions will result in approximately $118 billion in savings. H.R. 3590 contains provisions for a 2 percent bonus for plans which offer specified care coordination benefits. In addition, plans will be allowed up to an additional 4 percent bonus if their quality is highly rated according to the Centers for Medicare and Medicaid Services (CMS) star-rating system.*
- H.R. 3590 contains provisions for an “Independent Medicare Advisory Board,” which will have authority to make recommendations for Medicare cost-savings. The recommendations will take effect if Congress does not enact an alternative proposal that achieves the same cost savings. The board cannot not make any recommendations that will impact premiums or benefits. Also, the board will not be allowed to make any recommendations for cuts in a year when national health expenditures grow at a higher rate than Medicare costs. The board is required to make recommendations with beneficiary access in mind. A Government Accountability Office study on beneficiary access is required in 2014. Congress is required to reexamine the board in 2017 and will have the option to terminate it.
- The Board is required to produce a public report on system-wide (not just Medicare) health care costs, patient access to care, utilization, and quality of care. It also is required to submit to Congress and the President recommendations to slow the growth of national health expenditures, while preserving or enhancing quality of care.H.R. 3590 contains several beneficial Medicare provisions. It will:
- Provide a 50 percent discount on brand-name drugs and biologics filled in the Medicare Part D coverage gap (doughnut hole) for enrollees with incomes below $85,000 per individual and $170,000 per couple;*
- Eliminate Part D cost-sharing for full-benefit dual eligible beneficiaries receiving home- and community-based services;
- Reduce the Medicare Part D coverage gap (doughnut hole) by $500 in 2010 (2010 only);*
- Cover, with no co-payment or deductible, an annual wellness visit and creation of a personalized prevention assessment and plan. Prevention services include referrals to education and preventive counseling or community-based interventions to address risk factors.
- Tie Medicare Part D premiums to income, and will move more Part B and Part D beneficiaries into higher-income categories — meaning higher premiums —due to a freeze on thresholds.*
* NOTE: Medicare Part D (e.g. closure of the Medicare Part D doughnut hole) and Medicare Advantage payment provisions will be modified by the Reconciliation Act of 2010 (H.R. 4872) if passed by the Senate.