Medicare changes on the horizon

The good news for most of the 45 million Medicare members is that the changes will improve health care for them. Drug benefits will increase, more preventative care will be covered, access to physicians will be protected, and Medicare will be on more stable ground.

This is contrary to what most seniors were led to believe over the summer. A mailer was sent to seniors by Humana leading them to believe their benefits would be slashed, and they would have to pay more for less coverage. This launched an investigation into the health insurance company, which has since been dropped.

However, as a result of the rumors that were spread, an Associated Press poll found that opposition to a health care overhaul by older adults was up to 59 percent. That number has recently fallen to 43 percent, but many are still worried about the changes.

For many, the worry strictly comes down to the numbers. One of the changes that will occur is the slimming of Medicare spending from $6.4 trillion down to $500 billion over the next 10 years.

The cost-cutting is not expected to negatively affect Medicare patients, though. Part of the $500 billion will come from re-evaluating spending and getting rid of waste and fraud. Another source of savings will be in less increases being given to providers each year.

In addition, hospitals have agreed to contribute $155 billion over 10 years that will go toward the cost of insuring the uninsured.

Hospitals know they will benefit from the overhaul. Though they may not receive as much as they had hoped from Medicare patients, they will receive payments for previously uninsured patients.

Another area of savings planned, and one which is causing the most controversy, is the government's plan to scale back payments to insurers for covering beneficiaries enrolled in private Medicare Advantage plans.

Currently, the government spends 14 percent more to cover beneficiaries through the private plans than it would through the traditional programs, which comes out to $1,100 more per Medicare Advantage patient each year.

This is where members may see a negative impact. If the insurers are receiving less from the government to the tune of $100 billion over 10 years, they are likely to change their plans to receive that money from their members instead. This could lead to fewer benefits and higher out-of-pocket costs for those enrolled in the programs.

With all the talk of cutting costs, many people are overlooking the money that will be reinvested into Medicare with the planned changes. Over the next 10 years, up to $272 billion will be put back into the program, according to the overhaul legislation.

Out-of-pocket costs for many preventative screenings will be waived for those services that Medicare currently only partially covers.

Prescription changes will be another strong benefit in the overhaul. For those Medicare beneficiaries who have expenses high enough to reach the doughnut hole, the changes that will be made will help.

The "doughnut hole" occurs as a coverage gap for those whose total drug costs fall between $2,700 and $6,154. In this gap, they must pay full price for their prescriptions. After the $6,154 is reached, however, they only pay five percent of the costs.

In the bill that passed the Senate Finance Committee, members in the doughnut hole will get a 50 percent discount on brand-name drugs. The House bill also shrinks the gap, eventually eliminating it.

Another concern for patients is that they won't be able to find a physician who takes new Medicare patients, should they have to change doctors.

Under the current system of paying physicians, doctors will be facing a 21.5 percent cut in Medicare reimbursements beginning January 1. The overhaul addresses this issue.

The House bill cancels the Jan. 1 cut and proposes a reform for the physician payment system. The Senate bill also cancels the cut in January, and Senate Democrats proposed a permanent fix last week that would be a separate measure.