With much recent discussion and confusion over Medicare policy, it is important to get a refresher on where the program is headed and what has been changed under health reform. The Affordable Care Act set up new ways for health care to be administered to Medicare beneficiaries, including Accountable Care Organizations (ACOs) and their correspondent medical homes. With a managed care approach, ACOs were formed in order to streamline Medicare, so that services are delivered at a higher quality, more efficiently, and more cost effectively for both the patient and the government.
Medicare Part D Changes
Some Medicare recipients have already experienced some of the benefits of health reform on the program, especially if they take prescription medications. Health reform eliminates the coverage gap, also known as the “doughnut hole” in Medicare Part D coverage by phasing it out by 2019. By eventually eliminating the doughnut hole, where members have to pay the full price of prescription drugs, it will avoid individuals not receiving the treatment they need. The laws also requires brand-name drug manufacturers to offer a 50 percent discount during the coverage gap, and authorizing Medicare to negotiate for lower drug costs.
Any Medicare benficiary who hit the initial limit for Medicare Part D spending was issued a $250 rebate check in 2011, in an effort to begin solving the coverage gap problem. By 2013, subsidies will be offered for prescription drugs, which will increase over the years to fill the doughnut hole entirely by 2020, making sure that Medicare members never pay over 25 percent of drug prices out-of-pocket.
Copays for Some Preventive Care Eliminated
Prior to the ACA, Medicare beneficiaries were required to pay an annual deductible for physician services, in addition to 20 percent of the cost of service. After health reform, certain preventive care such as wellness visits, cancer screenings, immunizations, and colonoscopies have not required a copayment for the past year and a half. The HHS’s Preventive Services Task Force makes preventive care mandatory for all types of insurance coverage, including Medicare, which is a positive result of the health care bill.
Independent Payment Advisory Board (IPAB)
Highly scrutinized by those against health reform, IPAB was set up to recommend ways to reduce Medicare spending if Medicare per capita growth rates go over certain targets. This board of individuals will submit their proposals to the HHS, who will implement their measures unless Congress is opposed. Though accused of being a rationing board, the IPAB is not legally permitted to make changes that involve rationing care, or modifying benefits, eligibility, premiums, or taxes, or from suggesting payment reductions for specific providers before 2020.
Payment and Health Delivery System Changes
Several overhauls have taken place in how Medicare members receive their care. ACOs, as mentioned, are one method, as well as the Center for Medicare and Medicaid Innovation being started to test quality of care, and payment and service delivery models. The Federal Coordinated Health Care Office was set up within CMS to improve the care delivered to dual eligibles (Medicare and Medicaid), also. A pilot program to bundle payments for post-acute care, value-based purchasing were also put in place.
Medicare Advantage Adjustments
Those who have Medicare Advantage plans, or Medicare coverage through a private insurer, may not have been so lucky as federal support of Advantage plans was reduced by the ACA. Starting in 2011, the law froze the maximum amount Medicare pays plans per county. In 2012, phases in reductions for Medicare Advantage plan payments in relation to fee-for-service expenses began to take place in each county. Plans also have to meet MLR standards, maintaining a loss ratio of at least 85 percent by 2014.