Straight Talk for Seniors: How Will Health Care Reform Change Your Health Care? June 2013

National Council on Aging (NCOA) Improving the lives of older Americans since 1950 Enhancing Economic Security Improving Health Strengthening Community Organizations

Just the Facts About…. The A-B-C-D’s of Medicare Health Reform Changes to Medicare Finances How Health Reform Changes Affect YOU

1 Section 1 - How Medicare’s 4 sections are financed The ABCD’s of Medicare

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

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 ($104.90 in 2013)

The A-B-C-D’s of Medicare Part C - Medicare Advantage (MA) Private health plans (e.g. HMOs and PPOs) that deliver Medicare services 24% of Medicare recipients are in MA C

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

The A-B-C-D’s of Medicare Many believe that rate of spending on Medicare cannot be sustained The number of people with Medicare will grow rapidly as Boomers age. Medicare spending is increasing faster than the rest of the economy.

Health Reform Changes to Medicare Finances 2 Health Reform Changes to Medicare Finances

Financial Changes to Medicare Increased Revenues Higher payroll taxes for wealthy workers ($200/$250,000) Higher Part D premiums for 5% of higher-income Medicare beneficiaries ($85/$170,000) Reduced Spending Slower growth in payments to providers (not doctors) Reduction in over-payments to Medicare Advantage plans Average yearly Medicare spending increases down overall and down per person

Health Reform Financial Changes to Medicare Medicare solvency extended for 12 more years Increased funding to improve some Medicare benefits

What About the Federal Budget Deficit? Congressional Budget Offices estimates health reform will save $124 billion over 10 years. !

How Health Reform Changes Affect You 3 How Health Reform Changes Affect You

How These Changes Affect YOU Changes in Doctor Payments The law provides a 10% bonus for primary care doctors The law did not address the long-standing problem of future cuts in doctor fees, which has been a problem for more than 10 years, but that Congress consistently delays in separate bills.

How These Changes Affect YOU Improvements in Medicare Prescription Drug Coverage 2010: $250 Rebate check for those who hit donut hole 2013 & 2014: 52.5% discount on brand name Rx 2020: Coverage gap completely closed

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

How These Changes Affect YOU Better Chronic Care New quality improvements Pilot projects and demonstrations to test better coordination among doctors, specialists, other providers Incentives to reduce hospital readmissions Help so you can manage your own care

How These Changes Affect YOU Other Improvements Incentive to 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 +

How These Changes Affect YOU Greater Access to Medicaid Home and Community Long-Term Care Services Help to stay at home – if your state adopts these important options Financial protections for spouses Program to leave nursing homes Voluntary public long-term care insurance program for full and part-time workers (CLASS)

How These Changes Affect YOU What about Medicare Advantage Plans?

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

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

If you have a Medicare Advantage plan Don’t panic, but get informed. Shop around – research your options at www.MyMedicareMatters.org. Learn if you are eligible for Medicare Savings Programs, Extra Help for Prescription Drugs and/or other benefits (go to www.benefitscheckup.org). You can always return to Original Medicare.

What’s New with Medicare in 2013: Free preventive services to improve health and well-being Easier-to-read summary of benefits Save more when you reach the prescription drug coverage gap Pay less for outpatient mental health treatment Pay slightly higher premiums for Medicare

How Health Reform Affects Your Children and Grandchildren Insurance Protections Children up to age 26 will be covered under their parent’s policies (2010) No one will be denied coverage because of pre-existing conditions or dropped because they get sick (2011)

How Health Reform Affects Your Children and Grandchildren CBO estimates that 32 million currently uninsured Americans will have health insurance. New tax credits and tools will help contain costs and improve quality – so we all get better VALUE.

Five Facts – The New Law Will: Not cut basic Medicare benefits — and it will make some benefits better. Reduce Medicare spending and the federal deficit, and extend Medicare’s solvency by twelve years. Help people find and pay for long-term care at home. Improve health care for seniors in other ways. Improve coverage and protections for younger Americans with and without health insurance.

Straight Talk for Seniors: Will Health Care Reform Change Your Health Care? For more information: North Central Texas Area Agency on Aging Mary Jane Douglas and Melinda Gardner www.nctcog.org/cs/aing 1-800-272-3921 Provide your local SHIP counselor information.

Straight Talk for Seniors: Will Health Care Reform Change Your Health Care? For more information: www.NCOA.org/StraightTalk www.medicare.gov 1-800-MEDICARE