Patient Protection and Affordable

Care Act

What’s New For Older Americans

&
How It Will Affect Medicare Benefits
Aging Services of Washington - Resident’s Forum
September 16, 2010
 Presentation Outline

• Impacts to Medicare

• Paying for Long Term Care – the CLASS Act

• New Opportunities

1
Medicare – What Remains the Same
• The guaranteed Medicare benefits you currently receive
will remain the same.

• Medicare will continue to cover your health costs the way

it always has, and there are no changes in eligibility.

• During open enrollment this fall, you will continue to

have a choice between Original Medicare and a Medicare
Advantage plan.

• Look for more details in your Medicare and You

Handbook.

2
 Medicare:
More Affordable Prescription Drugs

• If you enter the Part D “donut hole” anytime

in 2010, you will receive a one-time, $250
rebate check if you are not already receiving
Medicare Extra Help.
• These checks began mailing in June, 2010
and will continue monthly throughout the
year as beneficiaries enter the coverage gap.

3
 Medicare:
Brand-Name Prescription Drugs
• In 2011, if you reach the coverage gap, you will receive a
50% discount when buying Part D-covered
brand-name prescription drugs (dependent upon agreements reached with
pharmaceutical companies).

• By 2020, Part D enrollees will receive the 50 % discount

from pharmaceutical manufacturers AND a 25% federal
subsidy.

• The federal subsidy percentage will be phased in, beginning

in 2013.

• By 2020, Part D enrollees will have to pay out-of-pocket for

25 % of the total cost of the drug coverage gap.

4
Exhibit 6

Standard Medicare Prescription Drug Benefit, 2010

Enrollee
15% paid by plan; 80% paid by Medicare
pays 5%
Catastrophic coverage limit:
$6,440 in total drug costs
($4,550 out-of-pocket)

100% paid by enrollee Coverage gap:

Beneficiaries with spending in the $3,610 Coverage Gap
(“Doughnut Hole”)
doughnut hole get $250 rebate in 2010

Initial coverage limit:

$2,830 in total drug costs
($940 out-of-pocket)
25% 75%
paid by paid by
enrollee plan

100% paid by enrollee Deductible:

$310

SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit in 2020 under the Patient Protection and Affordable Care Act, as
amended by the Health Care and Education Reconciliation Act of 2010.
Exhibit 7

Standard Medicare Prescription Drug Benefit, 2020

Before and After Health Reform

Before: After:
5% paid by Catastrophic
enrollee 15% paid by plan; 80% paid by Medicare coverage 15% paid by plan; 80% paid by Medicare

Brands:
50% discount
25%
100% paid by enrollee Coverage gap
25% paid by plan
paid by
enrollee Generics:
75% paid by plan

Initial
coverage
limit

25% 75% 25% 75%

paid by paid by paid by paid by
enrollee plan enrollee plan

100% paid by enrollee Deductible 100% paid by enrollee

SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit in 2020 under the Patient Protection and Affordable Care Act, as
amended by the Health Care and Education Reconciliation Act of 2010.
 Medicare:
Generic Prescription Drugs

• By 2020, 75 percent of the cost of generic drugs

in the gap will be subsidized by Medicare.
• The federal subsidy percentage will be phased in,
beginning in 2011.
• By 2020, Part D enrollees will have to pay out-of-
pocket for 25 % of the total cost of the drug
coverage gap.

5
 Medicare:
Catastrophic Coverage

• Between 2014 and 2019, the catastrophic

coverage threshold is reduced to provide
additional support for those with relatively
high drug costs.

6
 Medicare:
Helping You Stay Healthy

• Beginning in 2011, no coinsurance or

deductibles will be charged in traditional
Medicare for preventive services like
colorectal cancer screening and
mammograms.
• Medicare will cover a free annual
comprehensive wellness visit and
personalized prevention plan.

7
 Changes to
Medicare Advantage plans
• If you are in a Medicare Advantage plan, you will still receive guaranteed
Medicare benefits.

• Medicare Advantage plans receive payments from the federal government

to provide Medicare-covered benefits based on a predetermined formula.

• 77% of seniors are NOT enrolled in a Medicare Advantage plan.

• Medicare payments to Medicare Advantage plans are currently higher, on

average, than local fee-for-service costs.

• Beginning in 2012, payments to Medicare Advantage plans will be set

closer to the costs of enrollees in traditional Medicare in each county.

8
 Changes to
Medicare Advantage plans
• Medicare Advantage plans will be receiving payment incentives
for quality and program performance.

• Changes the annual enrollment period from October 15 to

December 7 of each year, beginning in 2011 for plan year 2012.

• Beneficiaries enrolled in a Medicare Advantage plan as of January

1 will be allowed 46 days after the beginning of the calendar year
to dis-enroll from the plan and return to original Medicare,
beginning in 2011; they will not be allowed to switch from one
Medicare Advantage plan to another during this time period.

9
 Medicare – Better Access to Care

• Your choice of doctor will be preserved.

• The law will increase the number of primary care doctors, nurses, and
physician assistants through training grants, etc.

• Community health centers will be able to serve 20 million new patients.

• Provides a 10 percent bonus payment for primary care services furnished by

primary care physicians, nurse practitioners, clinical nurse specialists and
physician assistants if at least 60 percent of their Medicare -allowed charges
have been for primary care services, effective 2011-2015.

• Provides a 10 percent bonus payment to general surgeons practicing in health

professional shortage areas, from 2011 through 2015.

10
 Medicare – Chronic Care

• Community health teams will provide

patient-centered care so you won’t have to see
multiple doctors who don’t work together.

• If you’re hospitalized, the new law also helps

you return home successfully—and avoid going
back—by helping to coordinate your care and
connecting you to services and supports in your
community.
11
 Medicare:
Keeping It Strong & Solvent

• Over the next 20 years, Medicare spending is

expected to grow at a slower rate as a result
of reductions in waste, fraud, and abuse.
• The new law contains important new tools
to help crack down on criminals seeking to
scam seniors and steal taxpayer dollars.
• This will extend the life of the Medicare Trust
Fund by 12 years.
12
 Medicare:
Expected Consumer Savings

In 2018, seniors can expect to save on

average almost $200 per year in premiums
and over $200 per year in co-insurance,
compared to what they would have paid
without the new law.

13
 Medicare: Premium Changes
• The income thresholds for the Part B income-related
premium are frozen at 2010 levels ($85,000/individual,
$170,000/couple) through 2019.
• Establishes a new income-related monthly Part D
premium, requiring higher-income Part D enrollees
(those with incomes greater than $85,000/individual,
$170,000/couple) to pay a higher income-related Part D
premium, beginning in 2011.
• Freezes the income thresholds for the income-related
Part D premium at $85,000/individual, $170,000/couple
through 2019.

14
 On-line Resources PPACA &
Medicare
• Medicare and you 2010:
• http://www.medicare.gov/Publications/Pubs/pdf/10050.pdf

• Washington State Health Insurance Benefits Advisors (SHIBA) office:

• http://www.insurance.wa.gov/shiba/index.shtml

• Federal Agency website on PPACA regards seniors:

• http://www.healthcare.gov/foryou/seniors/index.html

• Medicare and the New Health Care Law — what it Means for You:
• http://www.medicare.gov/Publications/Pubs/pdf/11467.pdf

• A tutorial offered by Kaiser Family Foundation on PPACA and Medicare:

• http://www.kff.org/medicare/med072810oth.cfm

• An issue brief offered by Kaiser Family Foundation on PPACA and Medicare:

• http://www.kff.org/healthreform/upload/7948-02.pdf
 Health Care Reform:
Paying for Long Term Care
The CLASS Act ~ Community Living Assistance Services and Support Act:

• Voluntary for both the employer and employee;

• Federally administered;

• Consumer-financed;

• Insurance plan;

• Provides Cash to Help Pay for Needed Assistance;

• Promotes Personal Responsibility and Choice.

16
 CLASS ACT

• Enrollment Begins After October 1, 2012;

• Eligibility for Enrollment:

 All Americans “Actively at Work”, Including Part Time or Self Employed;

 Age 18 and Older;

 Not Living In a Nursing Home (or other institution) at the Time of

Enrollment

17
 CLASS ACT
• Cash Benefit Not Less than $50/Day On Average;

• Benefit Amount Based on Assessment of Need Due to Physical or Cognitive Limitation:

 Higher Cash Benefit for People with Greater Need for Help with Activities of Daily Living
(bathing, eating, dressing, and mobility).

• Benefit Amount Increases Annually;

• No Lifetime Limit ~ Benefit Continues Until Person No Longer Has Qualifying Disability;

• A Qualifying Disability Will Be Either:

 Loss of Ability to Perform 2 ADLs (Activities of Daily Living); or
 Loss of Ability to Perform 3 ADLs

• Disability Continues or Expected to Continue for At Least 90 Days;

• Rules Must Be Written for Assessment Process Used to Determine Benefit Eligibility.

18
 CLASS ACT
• After Enrolling, Participant Must Pay Premiums for Five Years
and Be Actively at Work for 3 of These Years Before Receiving
Benefits.

• Example: Person Retires After 3 Years is Eligible for Benefits as

Long as They Pay For 5 Years and Subsequently Has a
Qualifying Disability.

• Special Rules will Apply for People Who Enroll For a Time, Drop
Out, but Then Sign Up Again.

19
 CLASS ACT
• Premiums may be lower for younger people than for older people when
they sign up.

• Premiums Remain the Same From the Time the Person Signs.

• Persons with Health Issues or a Disability May Not be Charged Higher

Premiums.

• Working Students and People with Low Income (up to the federal poverty
level) Charged a Special Low Premium ~ $5/month.

• Initial Premium Estimates ~ Average $123/month (lower for younger

people, higher for older people).

20
 CLASS ACT
• Allows Cash Benefits to Be Used to Purchase Non-Medical Services and
Supports to Maintain Independence at Home or In Another Community
Residential Setting, Including (but not limited to):

 Home Modifications,
 Assistive Technology,
 Accessible Transportation,
 Homemaker Services,
 Respite Care,
 Personal Assistance Services,
 Home Care Aides, and
 Nursing Support.

21
 CLASS ACT
• Authorizes States to Develop a New Method of Providing
Home Care for Enrollees With Chronic Conditions;

• Use of Health Information Technology in Providing Home

Health Services Including Use of Wireless Patient Technology
to Improve Coordination and Management of Care and
Patient Compliance;

• A Team of Health Care Providers can be ‘Virtual’.

22
Health Care Reform: New Opportunities
The Independence at Home Demonstration

• Incentive For Physicians or Nurse Practitioners to be Paid for Care

Coordination and Must Provide Home-Based Primary Care;

• Medicare Beneficiary has 2 or More Chronic Illnesses ~ Congestive Heart

Failure, Diabetes, COPD, Stroke, Alzheimer’s Disease and Others
Designated by HHS That Result in High Costs;

• Demonstration would begin on January 1, 2012;

• Goals: Reduce Preventable Hospitalizations, Prevent Hospital Readmissions,

Reduce ER Visits, Improve Health Outcomes.

23
 Health Care Reform: New Opportunities
Healthy Aging, Living Well Evaluation

• 5 Year Pilot between 2010-2014 and $50 Million Total Funding;

• Evaluate Community-based Prevention and Wellness Programs

for Medicare Beneficiaries, 55-64 in Age;

• Focus on Nutrition, Physical Activity, Reduction of Tobacco Use,

Substance Abuse, Screenings and Referrals for Treatment of
Chronic Diseases;

24
 Health Care Reform: New Opportunities
Medication Management in the Treatment of Chronic Disease
Grants

• Began May 1, 2010.

• Licensed Pharmacist, as a Part of an Interdisciplinary Team, Work

with Targeted Individuals Taking 4 or More Prescription Medications
for the Treatment of Chronic Diseases.

• Assessment, Initial Medication Review, Formulation of a Medication

Treatment Plan, Monitoring Safety and Effectiveness and Providing
Education and Training on Appropriate Use of Medication.

25
Patient Protection and Affordable Care Act
What’s New For Older Americans
&
How It Will Affect Medicare Benefits

Presented

September 16, 2010