Senior Citizens and The Affordable Care Act
By Victor Kostro // September 20, 2013
OBAMACARE EXCLUDES SENIORS FROM MANDATE, PROVIDES ADDITIONAL BENEFITS AND PROTECTIONS
ABOVE VIDEO: This Healthcare.gov video summarizes the impact of the Patient Protection and Affordable Care Act on seniors 65 and older.
BREVARD COUNTY • MELBOURNE, FLORIDA -- Since its passage in 2010, the Affordable Care Act (ACA, aka Obamacare) has been the subject of debates and a cause for considerable confusion among much of the population. The ACA’s far-reaching changes have already begun and will continue in the years to come.
I’ve had several seniors ask me about specific aspects of the law that may affect their health coverage. Here are the major provisions of the ACA that will have an impact on Medicare, and other changes involved with the law that will affect both senior healthcare coverage and care.
Under the ACA there is an individual mandate to obtain healthcare insurance. If one fails to do so, a penalty will be imposed starting at $95 in 2013 and rising each year until 2016 when the penalty reaches $695. However, for seniors, this is not a threat since those over 65 are eligible for Medicare coverage. Enrolled seniors 65 and over will not face the penalty.
Although there will be payment cuts to Medicare, there are key benefits that are absolutely protected under the ACA. Medicare Part A (hospitals, hospice care and some home health services) and Medicare Part B (medical insurance) are protected and may not be cut. The changes under the ACA, according to the National Council on Aging, give seniors even more Medicare benefits.
Changes to Prescription Drug Coverage
The new healthcare law decreases the expenditure on prescription drugs for Medicare recipients. Prior to the law being enacted, Medicare recipients were subject to what has become commonly known as the “Donut Hole.”
Simply put, the Medicare law previously required recipients to reach a $310 deductible prior to Medicare kicking in to assist. At that point, enrollees started paying 25% of the drug cost until they reached a total expenditure of $2800. The drug expense from $2800 to $4550 was then paid 100% by the enrollee. Once drug expenses reached $4550, Medicare would kick in again and the enrollee would pay only a small percentage of the prescription at that point.
A provision in the ACA requires Medicare to pick up more of the tab and will close the “donut hole” by the year 2020. Eventually, Medicare recipients will pay 25% of all prescription drugs across the board. This should be good news for seniors since the number of prescription drugs taken typically increases with age.
Preventive Care Expanded
Another benefit to seniors under the ACA is an increase in preventive care coverage. The ACA requires that Medicare cover preventive care procedures and screenings in an effort to reduce possible necessary future treatment. Prior to the ACA, Medicare did not cover preventive services. Such services include flu shots, tobacco use cessation counseling, cancer screenings, diabetes screenings and screenings for other chronic diseases. In addition, seniors are allowed an annual wellness visit. Previously, these services, whether recommended or not, were paid out of the patient’s own pocket. No doubt the senior population sees this change as a benefit.
Changes to Medicare Advantage Plans
When a senior enrolls in Medicare, he or she may choose the traditional Medicare coverage plan or may seek what is called a Medicare Advantage Plan, in which 25% of Medicare beneficiaries are now enrolled. The Medicare Advantage Plans have their own terms of coverage. They usually cover services not traditionally covered by Medicare such as dental or vision, but may, at the same time, require co-pays or cost-sharing fees for services covered, which under traditional Medicare would require no out-of-pocket expense.
The ACA prohibits Medicare Advantage Plans from charging higher cost-sharing fees for seniors receiving chemotherapy and dialysis. In addition, it limits the amount of expenditures of other than medical services for enrollees. In other words, the Medicare Advantage Plans are now limited as to the amount they may spend on administrative, marketing and other non-medical expenses. While certain additional covered services under these plans may be eliminated, certain required benefits are prohibited from being cut.
The new healthcare law reduces payments to Medicare Advantage Plans by $145 billion over 10 years, which creates some uncertainty for Medicare Advantage Plans in the future. Medicare Advantage Plans have been popular, with 25% of Medicare beneficiaries now enrolled, however the impending cuts in the plans may limit the options currently available to seniors under Medicare Advantage Plans.
Pre-existing and Conditions Clauses
All health insurance carriers are prohibited from including pre-existing conditions clauses in their plans. This means that health cannot be a factor when applying for health care coverage. Furthermore, insurance companies are prohibited from charging individuals varying amounts for coverage based on their health, sex, age or other commonly considered factors. This appears to be good news for the ill, females and the elderly, which are the groups of people who traditionally have paid more for their coverage. Now the cost will be evenly distributed to all.
In addition to those factors that may not be taken into consideration upon applying for coverage, there is also the protection of consumers once they are enrolled in the plan. The healthcare law says that once enrolled in a plan, the insurance company may not dis-enroll a person for becoming ill.
The ACA incentivizes hospitals to focus on seniors who are at high risk for frequent hospital readmissions by providing grants for improvement initiatives centered around more effective and efficient care of the elderly with chronic health conditions.
Enhances Consumer Information and Protection Related To Nursing Homes
There are several ACA provisions related to improving nursing home care. The ACA requires the Center for Medicare and Medicaid Services (CMS) to provide a comprehensive website where consumers may find information regarding local nursing homes, including inspection and the number of complaint reports filed against the home.
The consumer will also be able to find information about the nursing home such as the owner, how much the nursing home spends on resident care compared to administrative costs, staff turnover rates, and the number of direct hours of nursing care received by residents.
In addition to providing consumer information that enhances the ability to evaluate a nursing home more completely prior to choosing one, the law has also made changes meant to make it easier to file complaints about the quality of care within the nursing home, and prohibits retaliation for filing such a complaint.
There are many changes made by the Affordable Care Act that will affect seniors and their loved ones. It is important to have a general understanding of what seniors are facing in terms of their health care coverage. With seniors facing so many changes during a susceptible time in their lives, it is crucial that they be directed to resources that can assist them to make educated decisions about their health, their finances and their care options.
ABOUT THE AUTHOR
Victor S. Kostro is an attorney in private practice with the law firm of O’Brien, Riemenschneider & Wattwood, P.A. He has extensive experience as a corporate, transactional, healthcare attorney having served as Associate Corporate Counsel/Corporate Risk Manager for Health First, Inc. In this role, Vic provided representation related to physician employment, practice sales/acquisitions, regulatory and compliance issues, peer review and disciplinary actions, and counseled on issues related to fraud and abuse, anti-kickback laws, Stark, self-referral and the False Claims Act. In addition, Vic managed the entity’s Risk Management Department, which included oversight of all medical negligence and personal injury claims asserted against the entity, its hospitals and physicians. Vic is well versed in medical practice entity formation, and contractual matters, employment, shareholder and partnership agreements, purchase and sale agreements, estate planning and asset protection. Vic holds a Master of Laws in Taxation from the University of Florida.