Even if you don't get a daily newspaper, news about the passage of the Medicare Prescription Drug Improvement and Modernization Act has been hard to miss. The changes are so deep and wide-ranging that just about everyone on Medicare today will be affected in more ways than one.

If you are 65 or older, chances are you get all or most of your health care through Medicare: Adopted in 1965, the Medicare program extended health coverage to almost all Americans over 65. Medicare also covers health services for people with certain disabilities, including end-stage kidney disease. Although the qualifications for Medicare won't change, the way you access your health care services through Medicare may be very different as the new policies are put into place over the next two years.

The act, which was signed into law by President Bush in December 2003, affects two primary areas of Medicare benefits: prescription drug coverage and health care services. Although prescription drug benefits have already changed, the changes to health care services are yet to come.

•Prescription drugs

Starting in June 2004, new drug discount cards for prescription medications became available to Medicare patients. Unlike previous drug discount cards, these are approved by Medicare and are offered by private companies, including insurance firms, HMOs and others. They allow seniors to get discounts of 10 to 25 percent on prescriptions, which cardholders will still have to pay themselves. Beginning in January 2006, Medicare will cover prescription drugs as part of its regular range of benefits. It's important to note that drug coverage will vary from plan to plan, and that drug prices will change. The drugs are categorized into groups called therapeutic classes, and there will be at least one drug in each therapeutic class. For more information on the new discount cards, see our accompanying story on prescription drugs.

•Health care services

Starting in 2006 Medicare will allow consumers to choose from an assortment of private managed-care plans providing a wider range of benefits than those currently available. The providers include both health maintenance organizations (HMOs) and preferred-provider organizations (PPOs) that allow you to choose your own doctor. The current Medicare+Choice plans will be renamed Medicare Advantage as they expand their services and range of options in 2006. Call 1-800-MEDICARE (1-800-633-4227) for an automated question-and-answer service, or check http://www.medicare.gov to find out what the plans are for your area.

•New preventive tests

In January 2005, Medicare will begin covering more preventive tests. The new tests include initial wellness screenings and tests to detect diseases that commonly affect the elderly, including diabetes and heart disease. Medicare already covers certain preventive tests, such as cancer screening, bone density tests, and vaccinations.

Although you can't choose a new health plan yet, you can start researching your options now so you'll be ready in 2006.

One of the biggest changes to Medicare is the expansion of what used to be called Medicare+Choice to include regional PPOs. With fewer restrictions than HMOs, a PPO lets you save money by choosing from among doctors on a plan's "preferred" list, but you are not restricted to seeing only physicians who have signed up with the plan, as you would be with an HMO. Unlike HMOs, PPOs also usually don't require you to get a referral when you wish to see a specialist.

If you are trying to decide whether to trade in traditional Medicare for one of the new Medicare Advantage HMOs, you may want to take into account the likely longevity of the service, say experts. Although the new plans may offer better benefits for lower costs in the short run, you want to be sure the plan is going to be around to serve Medicare patients for the long haul. Nine out of 10 doctors take traditional Medicare patients, according to the last published survey from the Centers for Medicare and Medicaid Services, but in some states hundreds of doctors have left Medicare+Choice programs. In addition, insurers dropped 2.4 million senior beneficiaries from their rolls, citing federal red tape and inadequate reimbursement rates. The government has promised higher reimbursements, but some experts are still skeptical.

"The big question is, will these HMOs stay in business and provide continuous coverage?" says Gail Shearer, director for health policy analysis at Consumers Union. "Or will they fold and leave beneficiaries high and dry without any health services?"

Yes. The new Medicare system offers a choice between the private managed-care plans and the traditional fee-for-service plan offered today, but with the addition of a drug benefit. In addition, the new law calls for the government to create at least one plan that offers drug coverage only. It will be available in all areas, so those who choose to stay in a traditional Medicare program can still get a prescription drug benefit. This also guarantees coverage for prescription drugs even if you live in an area where a managed-care plan is not available.

Under the new Medicare system, about 14 million low-income seniors and patients with disabilities will be eligible for a range of subsidies, depending on how much they make and what assets they have, including savings and investments:

•Individuals with income of under $9,630 and couples making under $13,000 will get the most benefits under the Medicare system. They will pay no premium and no deductibles. They'll pay $1 for generic drugs and $3 for brand-name drugs for each 30-day prescription.

•The next range includes people making under $13,000 with less than $6,000 in assets and couples earning under $17,550 with assets less than $9,000. They pay $2 for generic brand medications and $5 for brand-name drugs.

People with incomes at these same levels but who have assets up to $10,000 have a $50 deductible and make copayments of 15 percent. Couples with up to $20,000 in assets pay the same fees.

•Finally, individuals with incomes up to $14,450 and couples making up to $19,500 with assets within the $10,000 to $20,000 range will pay premiums based on a sliding scale.

Change is coming, but you don't have to be caught off guard. Take a look at your options or call the Medicare help line in your state to get your questions answered.

-- Melanie Haiken is a freelance health and medical journalist in the San Francisco Bay Area. She is the former health editor of Parenting magazine and a former executive editor at BabyCenter.

Further Resources

Medicare

The State Health Insurance Assistance Program (SHIP) has counselors in every state and several territories available for free, one-on-one help with your Medicare questions or problems.

References

First published June 22, 2004
Copyright © 2004 Consumer Health Interactive

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