Obamacare – What Seniors Need to Know (Part 2)
So, last week we were discussing the highlights of President Obama’s health care plan that most affect seniors. The closing of the infamous prescription drug donut hole is one. But there are others.
Beginning in 2011 Medicare Advantage plans will have to reduce members’ out of pocket expenses for some more costly services and for members who use the most health care. The Advantage plans must continue to provide the same benefits available under Medicare Parts A and B. Currently Advantage plans are paid 14% more than it would cost to cover the same person in traditional Medicare. Over the next several years the new law will reduce that number to 1%. Plans that receive a high government rating will receive bonus payments, so seniors considering an Advantage plan should look for a plan in existence at least 5 years and one that carries a high government rating.
The Community Living Assistance Services and Supports Act (CLASS) establishes a national long term care insurance program. The program is intended to help pay for some future long term care services and support. (See my blog posts of April 12, 2010 and April 19, 2010 for further discussion.)
The new law also provides better information and accountability for nursing home care. It promotes home and community based services by providing financial incentives to the states to offer greater assistance for those who choose to remain at home rather than residing in a nursing facility. This signifies a recognition by the government that more people want to remain at home (where it is less expensive to administer care). It will be interesting to see if this becomes a trend as 77 million baby boomers start to turn 65 next year.
The new law does include provisions requiring those with higher incomes to pay for Medicare. Beginning next year, some will see higher premiums for Part D benefits. Additionally, the Medicare tax rate for households with high income will increase and the Medicare tax will be applied to unearned income (investment income, royalties, rent etc.)
The Affordable Care Act is very complicated and this review covers only a few key elements of import to seniors. It is clear, however, that while President Obama and Congress have attempted to address some long term care concerns, the need for planning is as urgent as ever. The government will not come to the rescue. It is up to each one of us to protect ourselves and a carefully constructed long term care plan will go a long way to providing that security.