What You Need to Know
- Even the Democratic senators who opposed the version of the package in play 2021 seem to like the Medicare provisions.
- One section could have a big effect on prescription drugs.
- Another could make big improvements in coverage for hearing aids and other hearing-related equipment and services.
As talks continue around the Build Back Better plan, many insurance agents and brokers might be unaware about the changes it will make to Medicare and its beneficiaries. Along with climate change and childcare initiatives, additions and adjustments to Medicare are included in the plan that can impact costs for beneficiaries.
While Medicare benefits include a variety of services, they don’t cover everything, with many covering gaps existing in relation to hearing services and prescriptions.
These are two main areas the Build Back Better plan looks to improve. Insurance brokers and agents should keep an eye on the proposed changes to expand coverage for hearing services and capping out-of-pocket prescription drug costs, both of which will benefit beneficiaries but will likely impact their premiums.
Hearing Loss Services
With many Medicare beneficiaries having hearing issues, hearing care is one of the most expensive services that is not currently covered by Medicare. The Build Back Better plan looks to add hearing coverage to Medicare starting in 2023. New coverage under the plan would include hearing aids for enrollees with moderately severe to profound hearing loss, hearing treatment, and rehabilitation by qualified audiologists.
Hearing services would fall under Part B and be subjected to the deductible. Medicare would be required to pay 80%, leaving a 20% coinsurance. Adding coverage of hearing services would lower out-of-pocket costs for beneficiaries who would otherwise pay the full cost of their hearing aids and services without the benefit. As costs are usually a barrier to receiving care, adding this benefit to Medicare could increase the use of these services and contribute to better health outcomes. It’s also important to make beneficiaries aware of the possibility of seeing higher premium costs as benefits increase due to influence from claims and inflation. The estimated cost of this benefit is around $36.7B over ten years.
Redesigning Medicare Part D
Medicare Part D currently is known for having an awful design for drug coverage with high out-of-pocket costs, but has no limit on the total amount that beneficiaries pay out-of-pocket each year. There are multiple phases including a deductible, an initial coverage phase, a coverage gap phase, and the catastrophic phase. Under the current Part D design, beneficiaries can face varying costs for the same medication depending on which phase of the benefit they fall in, and might see significant out-of-pocket costs for high-priced drugs because of coinsurance requirements and no hard out-of-pocket cap.