New Legislation and Changes in Medicare

Almost 27 million seniors who get their prescription drug coverage from Medicare saw major changes in 2010. In 2011, Medicare beneficiaries are getting more benefits, though people with higher incomes will have to pay higher incomes, and maybe, higher taxes too.

• Closing the Donut Hole
New agreements that the nation's drug companies have made with Medicare has resulted in seniors saving more on their drug costs by closing the 'donut hole'. The "donut hole" is the coverage gap that people with Medicare hit after spending a certain amount on their drugs. Once seniors reach their $ 2830 limit, they have to pay $ 3610 out-of-pocket for drugs before prescription coverage starts again at $ 6440. The biggest changes that new law brings to Medicare are:

New legislation closes the donut hole gap. In 2010, seniors who fell in the donut hole got a $ 250 rebate to help cover some of their out-of-pocket expenses on prescription drugs. In 2011, they get a 50% discount on brand name drugs and a 7% discount on generic drugs. The donut hole will disappear by 2020.

• Free Wellness Exams
In 2011, all seniors are eligible for free wellness exams and preventive tests such as screenings for high blood pressure and certain cancers.

• Higher Premiums for Some
Some seniors who make $ 85000 and more a year are paying even higher premiums depending on the plan they are in than before in 2011 for doctor's visits and prescription drug coverage. Couples earning more than $170,000 will pay higher premiums for prescription drug or Medicare Part D coverage.

• Changes in Medicare Advantage
Eleven million seniors with a Medicare Advantage plan will pay higher premiums. The legislation cuts $136 billion in subsidies in over next 10 years to private health insurance companies that offer Ohio Medicare Advantage plans as an alte ative to original Medicare. The changes in Medicare Advantage Plans are:

- Medicare Advantage Plans cannot charge more than Original Medicare for chemotherapy, dialysis, and skilled nursing facility care
- Costs to take part in a clinical research study may be lower than in previous years, and more costs will be covered than prior to 2011
- There is a new annual cap on the amount a Kentucky Medicare Advantage Plan can charge for Part A and Part B services. The annual out-of-pocket maximum may differ between Medicare Advantage Plans.

To sum up, while the new legislation allows seniors to save on prescription drug expenses in 2011, it makes them pay higher premiums for a Medical Advantage plan.