President Obama signed a Comprehensive Health Care Reform Bill (H.R. 3590) into law on March 23, 2010. Congress then passed the Reconciliation Act of 2010 (H.R. 4872), which modified H.R. 3590, on March 25, 2010. This is what is commonly referred to as the Health Care Reform package.
Many clients have been asking us how this Health Care Reform will affect the elderly and those with special needs. I thought it might be helpful in this and upcoming blogs to highlight the significant provisions of H.R. 3590 and H.R. 4872, which together constitute the Health Care Reform approved as law on March 25, 2010.
First, let’s talk about Medicare under this legislation. The law gradually eliminates the Medicare Part D donut hole by 2020. Changes include the following:
- Pharmaceutical manufacturers must provide 40% discount on brand name prescriptions filled in the Medicare Part D gap beginning in 2011; Federal subsidies of 25% of the cost also will be phased in between 2013 and 2020.
- Federal subsidies of 75% for generic drugs prescribed in the Medicare Part D coverage gap will be phased in during the period 2011 to 2020.
- A $250.00 rebate will be available to Medicare beneficiaries who reach the Part D coverage gap in 2010.
- Medicare will cover an annual wellness visit and creation of a personalized prevention assessment and plan with no co-payment.
- There is no Part D cost-sharing for full benefit dual eligible beneficiaries receiving home- and community-based services.
- Medicare advantage plans had been restructured to provide higher payments in areas with low Medicare fee-for-service (FFS) rates and lower payments (95% of FFS) for areas with high FFS rates.
- It will suspend Medicare Advantage (MA) plan enrollment for 3 years if the medical loss ratio is less than 85% for two consecutive years beginning in 2011 and will terminate the plan contract if the medical loss ratio is less than 85% for 5 consecutive years.
- There will be no cuts to mandated benefits, but MA plans may cut extra benefits, such as vision and dental.
- The Act strengths Medicare and extends the life of the Medicare Trust Fund by 9 years to approximately 2026.
In future blogs, I will address some of the other consequences of this new law.
Jerry Shiles
Attorney at Law
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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