THE ACA AND YOU AND MEDICARE TOO Angela

THE ACA AND YOU AND MEDICARE TOO Angela Zeek Bluegrass SHIP Coordinator 2013

Affordable Care Act (ACA)

ACA n Signed into law on March 23, 2010 n Created health insurance marketplaces for the uninsured to buy insurance n Made a number of changes to Medicare

The ACA and Medicare n Many believe that rate of spending on Medicare cannot be sustained – The number of people with Medicare will grow rapidly as Boomers age § 10, 000 people turning 65 every day for the next 20 years – Medicare spending is increasing faster than the rest of the economy

ACA Changes to Medicare Finances Increased Revenues – Higher payroll taxes for wealthy workers ($200/$250, 000) – Higher Part D premiums for 5% of wealthy Medicare beneficiaries ($85/$170, 000) n Reduced Spending – Slower growth in payments to providers (not doctors) – Reduction in over-payments to Medicare Advantage plans – Average yearly Medicare spending increases down from 6. 8% to 5. 7% – NO CUTS in basic benefits n

Reduced Payments to Medicare Advantage Plans n MA plans were paid about $1, 000 more person than people in original Medicare (14% higher) n Beginning in 2012, these overpayments started to be gradually reduced – Exception- higher performing plans will receive bonuses

The ACA Financial Changes to Medicare n Prior to the ACA, Medicare Trust Fund would be depleted by 2017. n Trust Fund is projected to be solvent until roughly 2029 due to the changes n Increased funding to improve some Medicare benefits

How These Changes Affect You – Medicare Prescription Drug Improvements – Better Preventive and Chronic Care – Better quality of care

How These Changes Affect You Improvements in Medicare Prescription Drug Coverage – Closing the Donut Hole (coverage gap)

Phase Out of Donut Hole for Brand Name Medications Year Pharmaceutical Manufacturer Discount Government Subsidy (paid through Consumer plans) Responsibility 2013 50% 2. 50% 47. 50% 2014 50% 2. 50% 47. 50% 2015 50% 5% 45% 2016 50% 5% 45% 2017 50% 10% 40% 2018 50% 15% 35% 2019 50% 20% 30% 2020 50% 25%

Phase Out for Donut Hole for Generic Medications Government Subsidy (paid through plans) Year Consumer Responsibility 2013 21% 79% 2014 28% 72% 2015 35% 65% 2016 42% 58% 2017 49% 51% 2018 56% 44% 2019 63% 37% 2020 75% 25%

How These Changes Affect You Improvements in Medicare Prescription Drug Coverage – Improved appeals for coverage denials – More help for people with limited means – For certain illnesses all medications manufactured to treat those conditions must be added to a plan’s formulary

How These Changes Affect You Better Preventive Care – Free annual wellness visit and prevention plan – No more cost sharing – free preventive benefits – More funding for prevention services

How These Changes Affect You Better Chronic Care New quality improvements n Better coordination among doctors, specialists, other providers n Services to reduce hospital readmissions n Help so you can manage your own care n

How These Changes Affect You Changes in Medicare Advantage (MA) Plans? – New bonuses to reward high quality care – New consumer protections to limit out-of-pocket costs

The ACA and Health Insurance Marketplaces n ACA created marketplaces for uninsured individuals and insured individuals with high premiums to purchase health insurance n Insurance sold under the marketplace offered by private companies n Kentucky’s marketplace is called Kynect (kynect. ky. gov) n Over 600, 000 Kentuckians are uninsured

The ACA and health insurance marketplaces n Insurance plans will be placed into categories based on level of coverage – Bronze, silver, gold and platinum Individuals can compare the coverage and determine which type is best for them n Assistance in the way of tax credits are available to people to reduce the cost of premiums n – To determine approximate credit and premium amounts visit, http: //kff. org/interactive/subsidycalculator/

The ACA and Medicaid Governor Beshear expanded Medicaid to include anyone with income of 138% fpl or below n Over 300, 000 Kentuckians will be eligible for Medicaid benefits under the expansion n Family Size Monthly Income 1 $1, 321 2 $1, 784 3 $2, 247 4 $2, 710

The ACA and health care marketplaces n Enrollment begins October 1 and ends March 31 for the first year – October 1 to December 7 in 2014 and beyond n Coverage is effective January 1 if enrollment happens prior to December 15 n People on Medicare not allowed to participate in the marketplace

Medicare Updates

Original Medicare (Part A & Part B)

Outpatient Mental Health Care n After Part B deductible – For visits to diagnose condition § Beneficiaries pay 20% of Medicare-approved amount – For outpatient treatment (such as psychotherapy) In this Year Beneficiaries Pay 2013 35% 2014 20%

National Mail Order Program for Diabetic Testing Supplies n Effective July 1, 2013 n Includes all parts of the United States including US Territories n To find a supplier, visit http: //www. medicare. gov/supplierdirector y/search. html

Medicare Part C & D

Low-Performing Medicare Advantage and Drug Plans n Plans that receive average Part C or D summary rating of less than 3 -stars for 3 years in a row – Indicates organization’s substantial failure to comply with its Medicare contract n Ratings are on Medicare Plan Finder Tool n Medicare & You does not have full, updated ratings

Low-Performing Medicare Advantage Plans n Changes for low-performing plans in 2013 – No online enrollment for low-performing plans § Must contact plan directly to enroll – Enrolled beneficiaries may use Special Enrollment Period to move to a higher quality plan § Will receive mailing from CMS n CMS has option to terminate lowperforming contracts starting in 2015

2013 Calendar Highlights n n n n Late September- CMS mails the Medicare & You handbook September 30 - Plans must provide Annual Notice of Change/Evidence of Coverage to members October 1 - Plans begin marketing October 1 - 2014 plan data to be displayed on the Medicare Plan Finder Mid-October- plan ratings updated on MPF October 15 -Open Enrollment beings December 7 - Open Enrollment ends January 1 - 2014 plan benefit period begins

Standard Part D Benefit Parameters 2013 2014 Deductible $325 $310 Initial Coverage Limit $2970 $2850 Out-of-Pocket Threshold $4750 $3605 Total Covered Drug Spending at OOP Threshold $6954. 52 $6455 Minimum Cost Sharing in Catastrophic Coverage $2. 65/$6. 60 $2. 55/$6. 35 2013 2014 Institutionalized $0 $0 Receiving Home & Community Based Ser. $0 $0 Up to or at 100% FPL $1. 15/$3. 50 $1. 20/$3. 60 Full Extra Help $2. 65/$6. 60 $2. 55/$6. 35 $66/15% $63/15% Extra Help Copayments Partial Extra Help (deductible/cost-sharing)

Part D Coverage Gap Discount Program n If beneficiaries reach the coverage gap in 2013 – 52. 5% discount on covered brand-name drugs § Counts toward Tr. OOP – 21% discount on covered generic drugs – Total cost paid by beneficiary (plus the 52. 5% discount) counts toward catastrophic coverage – Dispensing fees are not subject to the 52. 5% discount n Additional savings in coverage gap each year – Until 2020

Improved Coverage in the Coverage Gap Year What Beneficiaries Pay for Brand Name Drugs in the Coverage Gap What Beneficiaries Pay for Generic Drugs in the Coverage Gap 2013 47. 5% 79% 2014 47. 5% 72% 2015 45% 65% 2016 45% 58% 2017 40% 51% 2018 35% 44% 2019 30% 37% 2020 25%

High Performing Medicare Drug Plans n 5 Star Special Enrollment Period – Plans rated 5 Stars are indicated with a yellow triangle with a star and the number 5 located in the center – SEP begins December 8 each year – Beneficiaries can enroll into a 5 Star rated plan up until Nov. 30 of the following year – Only allowed one enrollment during the SEP – SEP is extended to individuals currently enrolled into a 5 Star plan

Notices from CMS and SSA n September – Social Security Notice to Review Eligibility for LIS – Plan Annual Notice of Change/Evidence of Coverage – Plan LIS Rider-from plan telling how much they get in 2014 towards Part D premium, deductibles and co-payments – Creditable Coverage letters from Employer/Union plans – Loss of Deemed Status Notice-from SSA stating they are no longer eligible for LIS – Medicare & You handbooks

Notices from CMS and SSA n October – Plan Non-Renewal Notices – Change in Extra Help Co-Payment Notice- from SSA on orange paper explaining copayments levels will change in 2014 – Reassignment Notices-Plan Termination-on blue paper explaining that plan is terminating and they will be reassigned to a new plan – Reassignment Notice-Premium Increase-on blue paper explaining that will be re-assigned to a new plan due to the increase in their current plan premium which is above the benchmark

Notices from CMS and SSA n October – MA Reassignment Notice-on blue paper explaining that the MA plan is terminating and they will be re-assigned to a Medicare drug plan for 2014 n November – LIS Choosers Notice-on tan paper explaining if they chose a Plan on their own that the plan’s premium has increased above the benchmark and they will pay a portion of the premium

Notices from CMS and SSA n November – Non-Renewal Reminder Notice- reminds people who do not get LIS that the plan is terminating – Social Security Income Related Adjustment Amount Notice- tell higher income beneficiaries about the higher Part B and Part D premium adjustments – Social Security LIS Redetermination Decision Notice-informing beneficiaries of their LIS award for 2014 – Social Security LIS and MSP Outreach Noticeinforms individuals of these two benefits

Notices from CMS and SSA n December – Social Security Benefit Rate Change Notice- tells people about benefit payment changes due to cost of living increases, premium withholdings, etc. – Reassign Formulary Notice- on blue paper informing individuals who get LIS and were affected by reassignment which of the Part D drugs they took in 2013 will be covered in their new 2014 Medicare plan n January – CMS Non-Renewal Action Notice- reminds people who do not get LIS and whose plan terminated to join a new drug plan n February – Consistent Poor Performer Notice- Informs people that they’re enrolled in a plan that has been identified as a consistent poor performer and encourages them to explore other plan options in their area

THINGS TO REMEMBER n n Medicare Open Enrollment begins October 15 and ends December 7 Must compare your prescription drug and/or Medicare Advantage plan Kynect, Kentucky’s health care marketplace is for uninsured individuals and enrollment dates are different from Medicare Open Enrollment Review all information received from Social Security or Medicare