Health Insurance Marketplace will launch October 1st

JeffBaderHealth Insurance Marketplace will launch October 1st. California’s is called Covered California, and some important pieces of healthcare reform, the Affordability and Accountability Act (ACA), will take effect January 1st.   Many people are questioning the impact ACA has on the senior health marketplace as there are parts of the new law that affect Medicare coverage.

Donut Hole Changes

One of the biggest changes under healthcare reform will be prescription costs in the coverage gap, often called the “donut hole,” which occurs in some Medicare Prescription Drug Plans. Once the cost for your prescriptions reaches a certain amount (based on $2970 in 2013 retail cost – not the portion you paid), then you enter the coverage gap where your share of cost becomes considerably higher until you reach the “catastrophic coverage” threshold.

Healthcare reform will incrementally shrink this gap by 2020.  In other words, the consumers bottom line share of cost in the donut hole will be reduced each year over the next six years from 50% to 25% by 2020.

Between now and then, the “Medicare Prescription Coverage Gap Discount Program”, provides manufacturer discounts of 50% on covered brand-name drugs.  The discount program will automatically start when you reach the coverage gap as the Centers for Medicare & Medicaid Services (CMS) tracks your prescription spending.

Although most of the pharmaceutical companies participate, there are some exception brand name drugs.  The coverage for specific drugs can be found at and follow the link to “2012 Labeler Code File” (under Downloads) where there’s a list of participating manufacturers.  And remember, you can always save on drug costs by using generic prescription medicines.

Doctors Leaving Medicare?

Last months’ Wall Street Journal cover story discussed physician unhappiness with Medicare being a major issue, and why some doctors are opting out of the program.  Earlier this year Forbes magazine claimed “Doctors are increasingly leaving the Medicare program given its unpredictable funding.”

Providers’ mounting frustration is a problem, but will the Affordable Care Act help?  In some cases, Obamacare may be a convenient scapegoat for this problem that has been mounting for years.  Here’s the numbers :

Although the number of doctors no longer accepting Medicare has proportionately increased from 3,700 doctors in 2009 to 9,539 in 2012, that’s not the entire story.

According to CMS, the number of physicians who accept Medicare patients grows each year.  There were 705,568 in 2012 and 735,041 in 2013.  The Journal didn’t report these numbers.

Opting out is a major decision for most doctors as Medicare patients make up around 25% of the patient population and represent a considerably higher portion of covered procedures for most providers.  And although it is less quantifiable, there’s a certain moral obligation to stay with Medicare. Turning away a sweet old gal that could be your mom isn’t viewed favorably by most people.

Healthcare Reform Impact on Medicare Plans

If you have or are considering a Medicare Supplement plan, these have been largely unaffected by ACA.  There may, however, be an impact from changes to the Medicare Advantage plans.  MA-PD plans beginning in 2014, will be held to a minimum loss ratio of 85% which requires restructuring the funding levels to these plans (reducing their payments from Medicare).  The implementation is taking place over the next 4 years although a “Quality Bonus Payment” program outside of ACA has mitigated much of the impact of the funding cuts.

An eventual reduction in funding levels to Medicare Advantage would cause an increase in premiums and reduction in benefits.   None the less, the Medicare Advantage programs should continue to grow and the 85% minimum loss ratio will likely drive consolidation in the market.

Funding levels for the Medicare programs will be a political hot topic going forward regardless of what changes are implemented under ACA.  Know when to enroll or change your Medicare plan!  If you have questions about these changes or Medicare, go to :

More questions about Obamacare?  Learn more here.

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