Medicare and the New Health Care Law

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1 Promoting the independence, health, and dignity of older adults through compassion, education, and advocacy. Mission The Council on Aging - Orange County promotes the independence, health, and dignity of older adults through compassion, education, and advocacy. Vision Through the efforts of the Council on Aging - Orange County, our community will realize a better aging experience in which older adults are treasured, and everyone can find solutions to the aging issues they face. Medicare and the New Health Care Law Presented by HICAP Health Insurance Counseling & Advocacy Program Values Compassion Integrity Quality Responsibility

2 Programs & Services OMBUDSMAN SERVICES [Advocates for Long Term Care Residents] FAST CARE MANAGEMENT HICAP CARING CONNECTIONS EDUCATION [Financial Abuse Prevention] [Aging in Place] [Health Insurance Counseling] [Friendly Visitors] [Professional Continuing Education Credits] 2

3 Our Goal Today Just the Facts About The A-B-C-D s of Medicare Health Reform Changes to Medicare Finances How Health Reform Changes Affect YOU

4 Medicare is Difficult to Understand!

5 Eligibility for Medicare U.S. Citizen or Legal Resident In U.S. 5 Consecutive Years Age 65 +; or Getting Disability Benefits for at Least 24 Months; or Have Kidney Failure, End Stage Renal Disease (ESRD); or Approved for Social Security Disability with a Diagnosis of ALS (Lou Gehrig s Disease) 11/10/2011 5

6 Original Medicare: 2011 Premiums, Coinsurance & Deductibles Go to any Provider that Accepts Medicare Part A: $0 Monthly Premium with - 40 Social Security Quarters - Up to $450/month with fewer than 40 quarters $1,132 deductible for hospital stay up to 60 days - Additional Costs After 60 days Part B: $ Monthly Premium - Hold Harmless Provision = Part B: $96.40/$ $162 Deductible Per Year 20 % Coinsurance for Most Part B Services 11/10/2011 6

7 What Does Medicare Cover? Part A Inpatient Hospital Inpatient Skilled Nursing Facility Home Health Care Hospice Care Part B Doctor Services Durable Medical Equipment Home Health Care X-rays, Lab Services Outpatient Services Preventive Services Part D Rx Medications 11/10/2011 7

8 Medicare Does Not Cover Annual Physical Exam Except One Time Welcome to Medicare Physical 2011 Annual Wellness Visit added Routine Dental Care Routine Vision Care 11/10/ Routine Hearing Care Routine Foot Care Custodial Care In Home Nursing Home

9 The A-B-C-D s of Medicare Part A Hospital Insurance Inpatient care, including skilled nursing Paid for by payroll taxes Concerns about future solvency

10 The A-B-C-D s of Medicare Part B - Outpatient Health Insurance Pays for additional medical services (like doctors visits, diagnostic tests, and outpatient care) Financed 75% by general revenues, 25% by monthly premiums ($115.40)

11 The A-B-C-D s of Medicare C Part C - Medicare Advantage (MA) Private health plans (e.g. HMOs and PPOs) that deliver Medicare services 24% of Medicare recipients are in MA; many are unaware if they are in an MA plan 11

12 The A-B-C-D s of Medicare Part D - Prescription Drug Coverage You choose your plan Includes a coverage gap or donut hole Paid for by general revenues

13 Part D Medicare Rx Standard Benefit Design What Beneficiary Pays Average Monthly Premium (CA) $32.35 Approved Plans Must Meet/Exceed Following Deductible $310 Initial Coverage: After Deductible - 25% of Drug Costs up to $2,840 $ Coverage Gap: 100% of next $3, drug costs (Minus Discounts) $3, Out of Pocket Threshold $4,550 Catastrophic Coverage 5% of Costs Over $4,550 Benefits Subject to Annual Changes 11/10/

14 Health Reform and Medicare Overall, health spending continues to spiral upwards with little/no connection to better health outcomes 14% of federal budget currently spent on Medicare If not controlled, Medicare would face deep cuts in the future 14

15 Health Care Reform Bills Health Care Reform (HCR) accomplished through two bills: Patient Protection and Affordability Care Act of 2010 (PPACA) (Public Law ) signed into law March 23, 2010 Health Care and Education Reconciliation Act of 2010 (HCERA) (Pub. L ) signed into law March 30,

16 No Cuts in Guaranteed Benefits What does that mean? Core benefits remain intact, Part A, Part B, Part D Some benefit improvements Cuts to MA plan funding may cause loss of Extras 16

17 MA Election Periods 2011 Annual Coordinated Election Period Timeframe changes to: October 15 December 7 No changes to rules Annual Disenrollment Period Replaces MAPD Open Enrollment Period Timeframe changes to: January 1 February 14 More restrictive only allows individual in an MA plan to return to Original Medicare - Special Enrollment Period (SEP): right to join a Stand Alone Part D Rx Plan if enrolled in an MA-PD 17

18 Preventive Services 2011 No out of pocket cost sharing for most Medicare covered preventive and screening services Annual Wellness Visit Every 12 months, starting 12 months after the Welcome to Medicare Exam No cost-sharing for this visit (or Welcome Exam) Covers a range of personal risk assessment and prevention plan services 18

19 Better Preventive Care How These Changes Affect Free annual wellness visit and prevention plan No more cost sharing free preventive benefits More funding for prevention services YOU 19

20 Part D Coverage Gap Gradually Closes Gap decreases in phases through 2019 In 2020 enrollees will pay only 25% after deductible Different formulas for brand and generic drugs 20

21 Part D Other Changes Starting in 2011 payments made by AIDS Drug Assistance Program (ADAP) and Indian Health Services (IHS) will count towards TrOOP (True Out of Pocket costs) Uniform exceptions and appeals process by 2012 Accessible by phone and internet Uniform coverage determination forms Both Medicare and Medicaid will cover benzodiazepines and barbiturates (2014) 21

22 Improvements in Medicare Prescription Drug Coverage How These Changes Affect YOU 2010: $250 Rebate Check for those who hit donut hole 2011: 50% discounts on brand, 7% on generics 2020: Coverage gap completely closed 7

23 How These Changes Affect Other Improvements Incentives for companies to help keep premiums down for early retirees New protections against elder abuse, neglect, financial exploitation Better training for workers caring for seniors Nursing home quality improvements + YOU 11

24 Preserve and Strengthen Medicare Goal is for greater fiscal stability Higher income individuals will pay more for some things (approx. 5% of beneficiaries) Extends life of Part A Trust Fund Potential for greater care coordination, increased quality and lower costs 24

25 Higher Part B and D Premiums for Higher Income Individuals Income Related Monthly Adjustment Amount (IRMAA) Part B premiums (already in effect) threshold frozen between 2011 and 2019 Meaning more people will reach threshold requiring them to pay a higher portion of their Part B premium Those with higher income ($85,000/individual and $170,000/couple) will have to pay a higher portion of their Part D premium, effective January 1,

26 Medicare Advantage (2011) MA plans must establish a mandatory maximum out-of-pocket (MOOP) liability amount inclusive of all Medicare Parts A and B services MOOP will be $6,700 in 2011 Voluntary MOOP may be lower Maximum allowable cost-sharing cannot exceed levels established by CMS for specified A and B services Also PPACA limits cost-sharing for certain services to no more than in Original Medicare - Chemotherapy, kidney dialysis, Skilled Nursing Facility (SNF) stays 26

27 MA plans are paid about $1,100 more per person than people in original Medicare (13% higher) Reduced Payments to Medicare Advantage Plans Payments frozen in 2011 Beginning in 2012, these overpayments will be gradually reduced 27

28 Changes in Medicare Advantage (MA) Plans How These Changes Affect Some plans may eventually reduce extra benefits, increase premiums or even leave the program New bonuses to reward high quality care YOU New consumer protections to limit out-ofpocket costs 28

29 Low Income Subsidy (LIS) 2011 and 2012 LIS enrollees who will be reassigned to new benchmark plans in the Fall of 2011 for the 2012 plan year Will receive a personalized notice from CMS comparing the cost of their 2011 plan to their cost in the plan to which they will be reassigned LIS eligibility for widow(er)s if death of spouse would affect LIS eligibility, extends such eligibility for one year beyond date eligibility would otherwise end (starting 2011) Starting 2012, full dual eligibles who receive certain Medi-Cal home-based care, including home and community based services (HCBS) will be exempt from Part D cost-sharing Similar to those now in institutional settings 29

30 More Information and Help HICAP or Social Security Administration Medicare MEDICARE ( ) Medicare & You 2011 Handbook 30

31 Support We are a private, 501(c)(3) nonprofit Funded by federal and state programs, private foundation grants, corporate and individual contributions Partnering with us is one of the best ways to provide lasting support for older adults in our community. Ways to help Volunteer Contribute Tell others

32 THANK YOU! 32