I actually read the House bill on healthcare reform that was announced on Thursday by Nancy Pelosi – well, I read the parts dealing with Medicare Advantage and Part D. You pretty much need a translator to understand the odd language that refers to previous bills and paragraphs and all sorts of mumbo jumbo, but I did understand a few points that will be well-received by seniors.
The bill directs certain actions to be taken as early as 2010 which will affect many seniors and Medicare beneficiaries with high drug costs:
The Part D initial coverage limit would be raised by $500 for 2010. The current level at which people with high drug costs will fall into the donut hole in 2010 is $2,830. This would be raised to $3,330, allowing some seniors to stay out of the donut hole a bit longer. The initial coverage limit would be raised each year until there is no donut hole in 2019.
The bill also requires pharmaceutical companies to agree, by December 31st of this year, to discount the cost of their drugs by 50% for Medicare beneficiaries who find themselves in the donut hole. It looks like this change will also take effect for 2010. If pharmaceutical companies do not agree to provide this discount, they would not be allowed to sell their drugs through Part D prescription plans.
The bill also mandates the elimination of the Open Enrollment Period from January 1st to March 31st, when people can switch Medicare Advantage plans. This would limit the period for switching Medicare Advantage plans to the period of November through mid-December each year. Currently people can switch Medicare Advantage plans between November 15th and March 31st. The change will not take place until 2011, so seniors will be able to change Medicare Advantage plans between January and March of 2010.
This change will make the Annual Election Period in the fall very chaotic – especially if cutbacks to Medicare Advantage plans result in major changes to plans next fall. Ten million seniors will have 45 days to figure out how to change their Medicare Advantage coverage and what the best plan might be – or if they should (and could) go back to Medicare. Next fall is going to be VERY interesting and VERY chaotic.
All of this depends, of course, on the healthcare legislation being voted on…and being passed by both the House and Senate.