The New Health Care Reform: Explaining Changes To Medicare Beneficiaries

On March 23, 2010, President Obama Signed Into Law THE PATIENT PROTECTION AND AFFORDABLE CARE ACT

Followed Closely On Its Heels Was THE HEALTH CARE AND EDUCATION RECONCILATION ACT Signed Into Law March 30, 2010

Taken Together These Pieces of Legislation Represent the Current Health Care Reform

After nearly two years of public debate, demonstration, and intensive lobbying, we now have the most comprehensive change in the American Health Care System since the enactment of Medicare & Medicaid in 1965.

New Legislation Contains Far Reaching Provisions Aimed At: Reducing the number of Americans without health coverage Expanding eligibility for Medicaid Reforming insurance eligibility standards Sponsoring a system of State Based Insurance Exchanges through which individual consumers and small employers can gain access to health insurance at better/reduced rates

Provisions in Effect for 2010 Health insurers cannot eliminate existing coverage based on discovery of a pre-existing condition Health insurers cannot deny new coverage to children because of a pre-existing condition Health insurers are required to permit dependent children to remain on health insurance plans up to age 26 Lifetime caps on health insurance benefits are prohibited Requires emergency services that are out of network be billed at in network rates

Provisions in Effect for 2014 Private insurers will no longer be able to turn away adult individuals with pre-existing conditions or charge higher premium rates based on those conditions Health Insurance Exchanges These are state based insurance markets enabling individuals and small businesses to purchase health insurance Employer Mandated Health Insurance Coverage for Employees Individual Mandated Insurance Coverage Federally Funded Health Insurance Subsidies Small Business Health Care Assistance

High Risk Pools temporary provisions (effective 2010) have been made to provide coverage for adults who have been excluded by insurers due to pre-existing conditions. These pools will expire in 2014 when the pre-existing condition ban goes into effect.

High Risk Pools To qualify: individuals must demonstrate that they: Have been uninsured for at least 6 months Have been denied coverage due to pre-existing conditions Monthly costs: WILL be based on the costs for general health insurance population WILL NOT be able to vary more than 4 to 1 Out of pocket expenses are capped at $5,950 annually for an individual and $11,900 annually for a family

Provisions in Effect for 2014 Health Insurance Exchanges State –based insurance markets based on Massachusetts “Health Connector System” Transparency in benefits and pricing for individuals and small businesses At least one guaranteed low cost selection option

Provisions in Effect for 2014 Employer Mandate Business with 50 employees or more will be required to provide insurance coverage or face a $2,000 penalty per employee not covered Individual Mandate Most Americans will be required to have insurance coverage or face fines $95 annually for 2014 $695 or 25% of (?) whichever is less by 2016 Low income individuals are exempt if lowest insurance plan cost exceeds 8% of individual’s income – these individuals will likely be eligible for Medicaid

Provisions in Effect for 2014 Health Insurance Subsidies Subsidies will be available to help individuals and families afford the mandatory insurance premiums Subsidies will be on a graduated scale – lower incomes receiving larger subsidies Example – family of 4 with a total income of $88,000 or less will be eligible for subsidies

Provisions in Effect for 2014 Small Business Health Care Assistance States will be required to set up Small Business Health Plan Option Programs (SHOP) in which small business will be able to pool together to buy insurance Small business are defined as no more than 100 employees – however states can limit SHOP to employers with 50 employees or less Effective 2010 – Small business are provided with federal tax credit until SHOP is implemented in 2014

Provisions in Effect for 2014 Nursing Home/Long Term Care Facilities Transparency & Improvement Program Expanding existing requirements for Nursing/LTC facilities to provide information to the state government on their operations: Staff levels Operation schedules Wages Organization structure Ownership disclosure

Provisions in Effect for 2014 Nursing Home/Long Term Care Facilities Transparency & Improvement Program Nursing/LTC facilities must include dementia management program following federal guidelines Nursing/LTC facilities must provide dementia care and abuse prevention training for all existing employees and new hires Establishes extended guidelines for national background checks for employees of Nursing/LTC facilities that have direct patient access Nursing/LTC facilities will be required to report incidents of patient abuse

Provisions in Effect for 2014 CLASS Program provides a public, voluntary, long term program that working individuals can purchase. The program would cover home care, respite care, home modifications, transportation, and assistive technologies.

Provisions in Effect for 2014 CLASS Program Buy-in program funded entirely by participants who make voluntary salary withholding from their gross wages Participants are entitled to guaranteed benefit payouts of at least $50 per day for the cost of LTC

How Does the New Law Impact Medicare?

The New Health Care Reform Impacts Medicare in a Number of Ways:

Some Provisions are directed at HEALTH CARE PROVIDERS : how Reimbursements and Subsidies are Determined and Dispersed

Some Provisions affect MEDICARE BENEFICIARIES and the Benefit Services they receive under Medicare

Some Provisions fall within the area of Improving the Quality and Performance of the Health Care System

Changes Effective In 2010 Nursing Home Compare Medicare Website Links to state nursing home survey and certification programs, model complaint forms, summary of complaints and information on criminal violations

Changes Effective In 2010 Hospital Payment Rates Reduces payments to inpatient acute care hospitals, LTC hospitals, psychiatric hospitals and rehabilitation hospitals Therapy Cap Exceptions Extends the process for allowing exceptions to the payment caps for physical speech and occupational therapy until 12/31/2010. Providers must submit claims for an exception.

Changes Effective In 2010 Medicare Part B Premiums Freezes the income threshold for beneficiaries who pay a higher Part B premium. Will be frozen at the 2010 income levels through 2019 Special Needs Plans (SNP) Extends the SNP program until CMS will apply “frailty payment adjustments” for dual SNP beneficiaries

Changes Effective In 2010 Closing the Part D Prescription Drug Coverage Gap (the Donut Hole) For 2010, the new law creates a one time $250 rebate for beneficiaries whose costs for Part D prescription drugs exceeds the coverage gap threshold

Eventual Elimination of the “Donut Hole” 2010 – New law provides $250 rebate for individuals in the “Donut Hole” 2011 – 50% rebate will apply to brand name prescription drugs for individuals in the “Donut Hole” 2020 – complete elimination of the coverage gap

What is the “Donut Hole” and How do I Know If I’ve Reached It?

Typical Medicare Prescription Drug Plan Plan Pays 95% Beneficiary Pays 5% Plan Pays 75% Beneficiary pays 25% Coverage Gap: Beneficiary Pays 100% No Coverage “DOUGHNUT HOLE” Catastrophic Coverage $4, $2,830,00 Partial Coverage

Coverage Gap Medicare Prescription Drug Plans (Medicare D Plans) have a gap in coverage sometimes called the “Donut Hole” During the Coverage Gap a beneficiary is responsible for paying 100% of their drug costs. For (2010) the Coverage Gap begins when the total cost for prescription drugs purchased through the plan reaches $2,830. The coverage gap ends when the individual’s own expenditures reaches $4, About 390,00 Medicare Beneficiaries in Pennsylvania hit the “Donut Hole” each year – the annual cost to individuals that reach the “donut hole “ averages over $4,000.

2010 Coverage Gap Rebate

$250 REBATE For Individuals that reach the “Donut hole” during 2010 One time payment only And only for 2010 year

Approximately three months after the end of the quarter in which an individual reaches the “Donut Hole” Medicare will automatically send out the rebate check Quarter # 1 Ends March 31 – Check will be mailed in June Quarter #2 ends June 30 – Check will be mailed in September Quarter #3 ends September 30 – Check will be mailed in December Quarter #4 ends December 31 – Check will be mailed in March

What does a qualified individual need to do to get this Rebate Check? Nothing… Qualied individuals will automatically receive their check from Medicare

How will Medicare know an individual reached the “Donut Hole”? At the end of each quarter, all insurance companies that provide Prescription Drug plans will submit a report to Medicare listing every individual that has entered the Coverage Gap during that quarter

What if I Don’t Get the Rebate Check When I Should? Contact Medicare Or Visit the US government web site Managed by the Department Of Health & Human Services

Coming in 2011……

Continues to close the coverage gap by reducing the percentage of cost for beneficiaries.

2011 New Health Care Legislation will require Pharmaceutical Manufacturers to provide a 50% discount on prescriptions filled for individuals in the Coverage Gap. (federal government will provide a 7% discount on generics for individuals in the coverage gap) The % amount of the discount will gradually increase each year until… 2020 Complete elimination of the Coverage Gap

Changes Effective In 2011 Annual Enrollment Period (AEP) Changes the AEP to October 15 – December 7 Change begins October 15, 2011 Medicare Advantage Disenrollment Period Provides a 45 day period (1/1 – 2/15) to Medicare Advantage enrollees, during which time they can disenroll from Medicare Advantage plan and return to Original Medicare.

Changes Effective In 2011 Physician Compare Website Requires the Secretary of HHS to develop a “Physician Compare” website by 1/1/2011. Preventative Benefits Eliminate all cost sharing for certain preventative screening services.

Changes Effective In 2011 Payment Rates to Medicare Advantage Plans Freezes payment rates for 2011 at the 2010 payment levels Cost Sharing Requirements Requires Medicare Advantage plans that provide extra benefits to give priority to cost Sharing reductions

Changes Effective In 2011 Cost Sharing Restrictions Prohibits Medicare Advantage plans from imposing higher cost sharing for some Medicare covered benefits such as chemotherapy, dialysis, and skilled nursing care. Can not charge more than Original Medicare

Changes Effective In 2011 Higher Premiums Medicare beneficiaries with annual incomes will pay higher Part D plan premiums $85,000 + single $170,000 + married Less than 5% of the Medicare population is subject to income-related premium adjustments

Changes for 2012 and Beyond Exceptions and Appeals PDPs and MA-PDs are required to utilize a single uniform exceptions/appeals process. Plans are to provide instant access to the process via the web or toll free number Medicare Advantage Payment Rates Reductions in payments to MA plans will be phased in over 3 to 7 years. Plans must still provide all benefits guaranteed by Medicare

Changes for 2012 and Beyond Medicare Part D Cost Sharing Eliminates Part D cost sharing for dual eligible beneficiaries receiving services under a Home and Community Based Waiver Medicare Part D Formulary By 2014 Part D will cover Benzodiazepines and Barbiturates

Changes for 2012 and Beyond Nursing Home/Long Term Care Facilities Transparency & Improvement Program Expanding existing requirements for Nursing/LTC facilities to provide information to the state government on their operations: Staff levels Operation schedules Wages Organization structure Ownership disclosure

Changes for 2012 and Beyond Nursing Home/Long Term Care Facilities Transparency & Improvement Program Nursing/LTC facilities must include dementia management program following federal guidelines Nursing/LTC facilities must provide dementia care and abuse prevention training for all existing employees and new hires Establishes extended guidelines for national background checks for employees of Nursing/LTC facilities that have direct patient access Nursing/LTC facilities will be required to report incidents of patient abuse