October is a critical month in health care. On 10/1, the Health Insurance Marketplace officially opened to consumers. And 10/15 will mark the start of Medicare’s annual open enrollment period. If you currently have Medicare, the government-funded health insurance program for people with certain disabilities or who are 65-years of age or older, or are looking to enroll this year, you may be wondering what to do this month.
Will you still be able to receive Medicare coverage in 2014, once health care reform goes into full effect? Will Medicare coverage change? Do you need to buy insurance on the Marketplace instead?
You’ve got questions, we’ve got answers. Here are five must-knows about the impact of health care reform on Medicare.
1) Your Medicare coverage is not a part of the Marketplace.
The Health Insurance Marketplace, established by the Affordable Care Act (ACA), does not include Medicare. This means you will not have to replace your Medicare coverage with a plan offered on the Marketplace. Whether you have Original Medicare or Medicare Advantage, you will be able to continue your current plan without interruption.
2) Lower prescription costs.
Medicare Part D helps cover the cost of prescription medications. Most Medicare Part D plans have a coverage gap, referred to as the donut hole, which puts a temporary limit on how much the plan will cover for your prescription medications.
For example, in 2014, once you reach $2,850 in prescription drug costs, you will be in the donut hole. When you enter the donut hole, you will have to pay for prescription drugs out of pocket; however, you will receive a 50 percent discount on all Part D-covered brand-name prescription drugs.
Once you’ve spent $4,700 out-of-pocket on prescription medications for the year, you will be out of the donut hole, in which case you will automatically get catastrophic coverage, which ensures you only pay a small coinsurance or copayment for prescription drugs for the remainder of the year.
This will help reduce out-of-pocket costs for Medicare recipients and potentially help close the donut hole.
3) Part D premiums may increase for some.
The ACA will help reduce out-of-pocket costs for Medicare beneficiaries by lowering prescription drug costs for those in the donut hole. However, as a result, Part D premiums may increase for some recipients, depending on their annual income and the plan in which they’re enrolled.
4) The future of Medicare is safe.
The ACA extends the life of the Medicare Trust fund until at least 2029. This 12-year extension is the result of stringent reductions in waste, fraud and abuse, which have lowered Medicare costs and enabled the government to set up a more stable future for the program.
5) Greater access to preventive services, for less.
Under the ACA, Medicare has eliminated out-of-pocket costs for many preventive services, such as mammograms and blood pressure screenings. You are already able to receive these services without having to pay the cost of a co-pay, coinsurance or deductible, and this will continue in 2014.
Want to learn more about health care reform and how it may impact you? Check out Health Care Reform Basics.
Photo Credit: Squidish