How Does Health Care Reform Impact Seniors?

There are many categories of regulation and cost change that will be driven by the recently signed Health Care Reform bill. Americans of all ages will have to adapt to new benefits and also unfamiliar agencies or procedures. Some of these changes will have an immediate impact on your choices depending on your current health and other options may not affect you until accident or illness causes you to make a claim.

Here are some changes in this complex bill which will especially affect retirees starting right away in some cases:

1. Medicare spending cuts. The way that it is designed, the legislation does not change Medicare's guaranteed benefits. The intended objective however, is to slow the increasing cost of Medicare premiums and to ensure that Medicare will not run out of funds. In order to attempt to achieve that ambitious goal, there are some cuts in medical reimbursement over a ten year period starting in 2011. This will particularly target Medicare Advantage programs which are a hybrid between private insurance and government subsidy. These cuts could reduce or eliminate some of the extra benefits your Medicare Advantage plan may offer, such as dental or vision care, and your insurer may choose to increase your premiums to offset the decrease in government reimbursements. No immediate changes to your primary Medicare benefits.

2. Medicare Part D drug program changes. If you are participating in Part D now, you probably know about the gap in benefits that comes now when you reach a threshold of $2,830 in total year to date costs. The next $3,610 may be out of pocket before you can again qualify for prescription drug benefits. This is called the "donut hole" problem. But in 2010, if you fall in the donut hole, you will receive a $250 rebate, and, in 2011, you will receive a 50% discount on brand-name drugs. Eventually by 2020, this prescription drug funding gap will have been closed. However, wealthier seniors ($85,000 singles and $170,000 couples) will see the Part D premiums increase.

3. New Benefits added to Medicare. If you are a Medicare beneficiary, you will receive free wellness and preventive care starting in 2011.

4. More opportunity for affordable home care when disabled. Most people would rather stay at home when they have moderate disabilities instead of using a nursing home. The legislation authorizes the design of a type of program where you can buy affordable insurance that will help people to stay in their own home and maintain more of their dignity and independence. It will provide a cash benefit of at least $50 per day (after a five year vesting period) for non-medical services such as home care services, family caregiver support,and adult day-care or residential care services. The Community Living Assistance Services and Support program (CLASS) will be established after 2011. Final details depend on regulations which are now being written. It will be financed through payroll deductions and available to working adults who choose to sign up. Private long term happinesslifetime.com care insurance may still be the better choice if it is affordable for you.

Many questions about the benefits and costs of the health care reform are still not clearly answered but it is already changing the plans of many seniors who want to have a more comfortable retirement.