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Health Law is Good for Older Americans

If you take the politics out of the recently passed health care law, there’s a lot for older Americans to like. But, it’s going to take quite a vigorous effort to convince Medicare subscribers, who have fallen for the negative hype surrounding the program.

An Associated Press-GfK survey in March found that 54 percent of seniors opposed the legislation that was then taking final shape in Congress. And shortly after being signed into law a USA Today/Gallup Poll found that a majority of seniors said passing the bill was a bad thing. “Many people have been unfairly frightened by thinking that their Medicare benefits are going to be cut and they are not,” said Cheryl Matheis, AARP’s senior vice president for health strategy.

“There needs to be clear education out there to let people know that their benefits are protected, that their doctors and hospitals are going to be there for them,” she said during a recent telephone conference, where she and other AARP representatives were available to explain the new law’s implications for older Americans.

“There is no other thing as important to the country and to us,” said Jim Dau, spokesperson for AARP. “It’s about 45 million Americans who depend on Medicare, it is literally a lifeline. These people spend on average up to a third of their out-of-pocket income on health care.”

The law actually strengthens traditional Medicare — which covers three-fourths of subscribers — by adding more free preventive care such as cancer and diabetes screenings. Some immunizations will be free. “This should save people money as well as improve their healthcare,” said David Certner, AARP’s legislative policy director.

There is also more money for those serving as medical coordinators such as primary care doctors and nurses, Certner said. “There are savings in the Medicare program that will quite frankly improve the financial stability of the Medicare system by roughly 10 years.”

For the quarter of Medicare subscribers who are enrolled in private Medicare Advantage plans, the new law does gradually reduce those generous subsidies to insurers, which has been costing about 14 percent more than traditional Medicare. “It costs taxpayers and Medicare premium payers a lot more money to pay for these additional dollars going to private insurance plans in Medicare,” Certner said. While Medicare Advantage subscribers, over time, will likely face higher premiums or reduced benefits, the insurance companies offering these plans will be able to earn bonus payments for high quality care.

“The original notion was these plans would be able to compete with traditional Medicare on a level playing field and were supposed to save money. Now they are actually losing money,” Certner said.

Medicare enrollees will be happy to learn the law will finally close the doughnut hole — the Medicare Part D coverage gap that has made subscribers responsible for all drug costs between $2,830 and $6,440. This year, anyone entering the doughnut hole will receive a $250 rebate to help pay for those costs. Starting next year there will be a 50 percent discount on brand-name drugs, and the doughnut hole will begin to close in increments of about 2 percent each year until 2020, when it finally disappears.

One of the sources to help pay for the package does require higher income seniors — individuals with an annual income of more than $70,000 and more than $185,000 for couples — to start paying somewhat higher premiums for Part D benefits beginning in 2011.

“One of the goals of health care reform was to rein in costs. Medicare premiums have doubled in the last eight years, we need to make sure that this doesn’t keep happening,” said Dau.

During the health-care reform debate, AARP worked to ensure all the interests of its members were fairly represented in the final legislation. And, while representatives of AARP admit the law is not perfect, it provides a buildable foundation to make it so.

“We have been talking to our members for several years, we asked them what their issues were, and we collected 78,000 personal stories from people about their health-care experiences and what they want to see changed,” Matheis said. Besides Medicare and the high price of prescription drugs, AARP members had a number of other concerns, most of which are addressed in the law. “It (the law) doesn’t solve all of the issues, but it really does provide a lot of concrete advancement that will help our members and their families in every single one of these areas,” Matheis said.

There are provisions to help 7 million people, who are over the age of 50 but not yet eligible for Medicare, who have been without insurance, said Dau. “These are people who have been blocked at every turn by industry practices that keep them out (of getting insurance) based on age or medical history.”

One in 4 people at age 60 can’t get a policy because of a preexisting condition, said Gerry Smolka, AARP’s public policy adviser. For those who can’t find coverage because of their medical condition, there is money set aside to set up some temporary insurance coverage.

In many states, insurers set an ‘age rating’ ratio of 9-to-1 or higher, said Smolka. The ratio Massachusetts is 2-to-1. The new law limits the ratio to 3-to-1, meaning a 50-year-old could be charged only three times as much as a 20-year-old.

She said when the law is fully implemented, insurers will no longer be allowed to discriminate against people based on gender or health history in terms of their access to or cost of care. “Insurers will still be able to set premiums for people based on their family status,” Smolka said.

Next year, insurers will be prohibited from applying lifetime and annual caps on coverage and must report and justify premium rate increases to the federal government, said Smolka. “If the rates are unreasonable, they must give rebates back to the consumer,” she said.

To take effect in 2014, states will be required to offer insurance exchanges for individuals under 65 and for small businesses to buy coverage. “In 2014, pre-existing conditions disappear from our lexicon, which is a good thing,” Smolka said.

While long-term care is not something most Americans think about until it’s needed, one of the goals of the new law is to move the country’s reliance on institutions to home-based care — which is less expensive and clearly desired among Americans. Dau said institutional care can cost three times as much as home care. “The way the system is based, Medicaid favors nursing home care,” he said. “Medicaid is the biggest funder of long-term care in the country. (This way) people can age in their homes.”

The CLASS (Community Living Assistance Services and Supports act) act is a start. The voluntary, public long term care insurance program will begin enrolling people next year.

Following a five-year vesting period, the program will provide individuals with a cash benefit of not less than $50 per day to purchase non-medical services and supports necessary to maintain community living. The program is financed through voluntary payroll deductions and will automatically enroll all working adults unless they choose to opt-out.

Beginning next year, families will have access to additional resources such as informative websites for state-sponsored home- and community-based care programs.

The Independence at Home demonstration program will take effect in 2012 to provide high need Medicare beneficiaries with primary care services in their home and allow participating teams of health professionals to share in any savings if they reduce preventable hospitalizations, prevent hospital readmissions, improve health outcomes, ramp up the efficiency of care, reduce the cost of health care services and achieve patient satisfaction.

Nursing homes will also be required to report the information families need to make more educated choices when searching for care for a loved one.

No one believes this health care law is perfect. “We knew that once the package was enacted, we would be able to celebrate its passage, but get to work the next day.” Dau said.

AARP will continue working toward making drug prices more affordable and creating an easier path for generic drugs to come to market, including generic versions of the high cost biologic drugs. “We’re trying to make sure there is safe importation of prescription drugs from abroad as well as allowing the Secretary of Health and Human Services to negotiate drug prices with manufacturers,” Dau said.

He summed it up best when he said, “Let’s not lose sight of what’s really good in this final package to help people.”

Sondra Shapiro is the executive editor of the Fifty Plus Advocate, the statewide mature market newspaper. This column appeared in the May 2010 edition.

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