When the health care reform legislation was passed, there were several provisions included which affected Medicare laws. And although not all of the provisions will affect agents directly, it’s still important for every agent who sells Medicare to know everything that’s going into the law, particularly because some of these measures will have your clients coming to you with questions regarding their benefits, physician services, or even how their taxes might change. Here’s a quick guide, broken down by year, to help you understand what’s happening to Medicare thanks to the health care reform bill.

2010

Cost containment

  • Reduce annual market basket updates for inpatient hospital, home health, skilled nursing facility, hospice, and other Medicare providers, and adjust payments for productivity
  • Ban new physician-owned hospitals in Medicare

Delivery system reforms

  • Establish a new office within the Centers for Medicare & Medicaid Services (CMS), the Federal Coordinated Health Care Office, to improve care coordination for dual eligibles

Part D

  • Provide a $250 rebate for beneficiaries who reach the Part D coverage gap

2011

Cost containment

  • Establish a new Center for Medicare and Medicaid Innovation within CMS
  • Freeze the income threshold for income-related Medicare Part B premiums for 2011 through 2019 at 2010 levels ($85,000/individual and $170,000/couple), and reduce the Medicare Part D premium subsidy for those with incomes above $85,000/individual and $170,000/couple
  • Provide Medicare payments to qualifying hospitals in counties with the lowest quartile Medicare spending for 2011 and 2012

Medicare Advantage

  • Prohibit Medicare Advantage plans from imposing higher cost sharing for some Medicare covered benefits than is required under the traditional fee-for-service program
  • Restructure payments to Medicare Advantage (MA) plans by phasing payments to different percentages of Medicare fee-for-service rates; freezes payments for 2011 and 2010 levels

Physician payment

  • Provide a 10 percent Medicare bonus payment to primary care physicians and general surgeons practicing in health professional shortage areas

Part D

  • Begin phasing in federal subsidies for generic drugs in the Medicare Part D coverage gap (reducing coinsurance from 100 percent in 2010 to 25 percent by 2020)
  • Require pharmaceutical manufacturers to provide a 50 percent discount on brand-name prescriptions filled in the coverage gap (reducing coinsurance from 100 percent in 2010 to 50 percent in 2011)

Preventive services

  • Eliminate Medicare cost sharing for some preventive services
  • Provide Medicare beneficiaries access to a comprehensive health risk assessment and creation of a personalized prevention plan

2012

Cost containment

  • Allow providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the savings they achieve for the Medicare program
  • Reduce Medicare payments that would otherwise be made to hospitals by specified percentages to account for excess (preventable) hospital readmissions

Delivery system reforms

  • Create the Medicare Independence at Home demonstration program
  • Establish a hospital value-based purchasing program and develop plans to implement value-based purchasing for skilled nursing facilities, home health agencies, and ambulatory surgical centers

Medicare Advantage

  • Reduce rebates for Medicare Advantage plans
  • High-quality Medicare Advantage plans begin receiving bonus payments

Part D

  • Make Part D cost sharing for dual eligible beneficiaries receiving home and community-based care services equal to the cost sharing for those who receive institutional care

2013

Delivery system reforms

  • Establish a national Medicare pilot program to develop and evaluate paying a bundled payment for acute, inpatient hospital services, physician services, outpatient hospital services, and post-acute care services for an episode of care

Part D

  • Begin phasing in federal subsidies for brand-name drugs in the Part D coverage gap (reducing coinsurance from 100 percent in 2010 to 25 percent in 2020, in addition to the 50 percent manufacturer brand discount)

Tax changes

  • Increase the Medicare Part A (hospital insurance) tax rate on wages by 0.9 percent (from 1.45 percent to 2.35 percent) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly
  • Eliminate the tax deduction for employers who receive Medicare Part D retiree drug subsidy payments

2014

Cost containment

  • Independent Payment Advisory Board comprised of 15 members begins submitting legislative proposals containing recommendations to reduce Medicare spending if spending exceeds a target growth rate
  • Reduce Disproportionate Share Hospital (DSH) payments initially by 75 percent and subsequently increase payments based on the percent of the population uninsured and the amount of uncompensated care

Medicare Advantage

  • Require Medicare Advantage plans to have medical loss ratios no lower than 85 percent

Part D

  • Reduce the out-of-pocket amount that qualifies for Part D catastrophic coverage (through 2019)

2015

Cost containment

  • Reduce Medicare payments to certain hospitals for hospital-acquired conditions by 1 percent

For more information about Medicare, visit the government’s Medicare page, or ASJ’s Medicare resource center, which includes Frequently Asked Questions as well as articles to help you succeed in Medicare sales.

Source: Kaiser Family Foundation