Many Americans are still waiting with bated breath to see how Obama health care reform, termed the Affordable Care Act, is going to shake out for everyone in the country. Seniors are probably holding their breath a little harder than the rest though. For one, the information on how health care reform is going to or may affect Medicare coverage is confusing. It's time to demystify how reform may affect Medicare and get down to the truth.
For the most part, only two groups of seniors will see much of a change at all. The first group is seniors filing jointly who have a modified adjusted gross income of more than $170,000. The second group is any other filing status that has a modified adjusted gross income of more than $85,000. The primary changes these groups of seniors will see are changes in enrollment, medication coverage and Medigap coverage:
For seniors who are enrolling for 2011, the enrollment period runs from November 15 to December 31, 2010. While in previous years, seniors could make switches after enrolling between the months of January and March, this option is no longer available. In other words, once seniors enroll in the Medicare Advantage plan, they are locked in until the 2012 enrollment period. The only way to get around this is to switch back to traditional Medicare coverage between January 1 and February 15, 2011.
In the past, there has been a gaping hole in medication coverage after a senior pays $2,700 in prescription drug costs in a one-year period. The gap occurs because prescription medication coverage does not pick back up again until prescription medication costs go over $6,154 in the same year. Health care reform is changing this medication coverage gap by reducing the percentage that seniors enrolled in the program are responsible for paying, including:
- Seniors will receive a 50 percent discount on name brand prescriptions;
- Federal government will offer a 7 percent discount to seniors on generic prescriptions.
While there are changes coming in 2011 to Medigap coverage, health experts say it has nothing to do with new health care reform. Two new plan types are being added to the 14 Medigap policies that currently exist. The new plan types (M and N) offer lower monthly premiums than plans A to L. In addition, the new plans have lower deductibles and lower co-payments.
New health care reform has its benefits and drawbacks. As far as Medicare is concerned, the good changes come along with the not-so-good changes. If you're a senior depending on Medicare, make sure you know what changes may affect you so you can plan accordingly. And time is of the essence; the new enrollment period is only about a month away.
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