Though Massachusetts has led the way on health care reform, the overhaul is now the law of the land. What does that mean for older Bay State residents and their families? We take a look.
How does the new health reform law improve Medicare?
- Closes the dread “doughnut hole”: In 2010, if you reach the Medicare prescription drug coverage gap, you will receive a rebate for $250 to help you pay for prescriptions. Beginning in 2011, if you reach the doughnut hole, you will receive a 50 percent discount on your brand-name drugs. The gap will be fully closed over the next 10 years.
- Improves access to primary care doctors. Your primary care doctor will receive bonuses for treating people in Medicare, helping to ensure that the 931,000 Medicare beneficiaries in Massachusetts have continued access to important primary care services.
- Provides preventive care, such as screenings for cancer and diabetes, free of charge. You will no longer have to pay out of pocket for preventive care services. You will also be able to work with your doctor to develop your own plan to keep you as healthy as possible.
- Improves the coordination of care for people with chronic health conditions; and begins a new program that provides benefits to help older Americans and people with disabilities stay in their own homes and communities.
- Extends the solvency of Medicare. Health insurance reform will extend the life of the Medicare Trust Fund by nearly a decade.
Making Medicine More Affordable
Skyrocketing drug costs affect many Bay State residents, but those in Medicare are particularly hard hit. Medicare beneficiaries in Massachusetts spend an average of 30 percent of their incomes on out-of-pocket health costs – including premiums for supplemental coverage. These costs are six times greater than for people with employer coverage. In 2007, 25% of the Medicare beneficiaries in Massachusetts fell into the Part D “doughnut hole,” or coverage gap, which meant that they had to pay the entire cost of their medication and their premiums.
How will the health reform law help with the high cost of prescription drugs?
- Offers a one-time $250 rebate for Part D enrollees who fall into the doughnut hole in 2010;
- Reduces brand name drug costs by 50 percent for enrollees in the doughnut hole starting in 2011; and
- Gradually closes the doughnut hole so that by 2020, enrollees will be responsible for 25% of their brand name and generic drug costs from the time they meet their deductible until they enter catastrophic coverage.
This could add up to savings of nearly $2,000 next year for Bay Staters with high drug spending.
Insurance for Bay State Boomers
As the baby boomers age, the number of people age 50 to 64 without health insurance is soaring; 66,000 in the Bay State alone. Although more than half of uninsured Americans age 50 to 64 are in the workforce, they may be self-employed and unable to afford to buy their own coverage – or work for a small business that doesn’t offer insurance.
How will health reform help Massachusetts residents age 50-64?
- Provides people with help purchasing coverage; and
- Provides tax credits to small businesses to help make employee coverage more affordable.
As many as 371,881 people age 50-64 in Massachusetts may be eligible for a tax credit that helps make premiums affordable. In addition, 94,569 lower income residents in the same age group would qualify for even more protection from unaffordable health care costs through Medicaid, with the federal government paying the entire cost for three years.
The CLASS Act
The Community Living Assistance Services and Supports (CLASS) provision in the new law creates a new national voluntary insurance program that could help older Massachusetts residents and those with disabilities pay for the services they need to remain independent in their home and community.
How will the CLASS Act help?
- CLASS provides a cash benefit ($50/day minimum) for eligible participants.
- Benefits may be used to pay family caregivers.
- Individuals can participate in CLASS through automatic payroll deduction but can also enroll if their employer does not participate in CLASS.
There is a 5-year vesting period and individuals must work a certain amount at least three of those five years.
As long as individuals remain eligible, there is no lifetime limit on the benefits that participants may receive.
Still Have Questions? Get the Facts.
AARP has new online resources to help answer your questions about the health reform law.
“Health Care Reform Explained”—AARP Bulletin’s new column provides practical answers to questions submitted by readers. Read the column and send a question to HCRquestions@aarp.org.
AARP’s Get the Facts website offers information for both Medicare beneficiaries and for those with private health insurance. The site includes facts sheets on issues including prescription drugs and long-term care, and a user friendly guide to understanding the benefits of the new health care law.