Health care reform legislation recently approved by Congress and signed by President Obama will change Medicare, too. According to national, nonpartisan sources, here are the expected changes to Medicare because of this reform.

Payments to private companies that sponsor Medicare Advantage plans will be reduced. These companies may alter their benefits as a result. However, most of Medicare’s beneficiaries are in “traditional” Medicare, not in Medicare Advantage plans.

Health care reform is expected to result in reduced payments made to medical providers such as hospitals, physicians, and home health care agencies. As a result, a small number of these medical providers may stop serving Medicare beneficiaries, more likely in urban areas.

Health care reform is expected to reduce the number of patients who return to the hospital because there was not an appropriate plan of care at discharge.

The so called “doughnut hole” or gap in coverage for Medicare’s prescription drug program will be dramatically reduced over the next ten years from 100 percent payable by beneficiaries to 25 percent.

Out-of-pocket costs for preventative care benefits approved by Medicare will be eliminated. Preventative care includes wellness checkups and screenings for cancer, diabetes, and many other chronic diseases.

Health care reform expands the chronic disease self-management program by approving it for use in new places, including statewide in Illinois. This program helps people with chronic disease to manage their health condition better.

The program that detects and stops Medicare fraud and abuse will be strengthened.

Full and part-time workers will be allowed to pay voluntarily into a program, called CLASS, which will help them pay for long-term care services should they be needed because of long-term injury or disability.

Finally, health care reform will raise payroll taxes on the wages of high-income workers.

Not all of these health care reforms will go into effect immediately. Some reforms will be phased-in over the next ten years.

Sources: Kaiser Family Foundation, Medicare Rights Center, National Council on Aging, and National Association of Area Agencies on Aging.

###

Return to Medicare Information