Congratulations to Arizona! Our state government applied for and has been accepted to participate in the Early Retiree Reinsurance Program – which is part of the Affordable Care Act (aka “Obamacare”).

The Early Retiree Reinsurance Program provides $5 billion in financial assistance to employers and unions to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare. Businesses and other employers and unions that are accepted into the program will receive reimbursement for medical claims for early retirees and their spouses, surviving spouses, and dependents. Savings can be used to reduce employer health care costs, provide premium relief to workers and families, or both. The program ends on January 1, 2014 when State health insurance Exchanges are up and running.

Here is a partial list of Arizona businesses/groups/governments that will be getting help from the Early Reinsurance Program:

• American Radio Association Pension & Welfare Plan
• APL Limited
• Arizona Sheet Metal Trade Trust Fund
• Central Arizona Water Conservation District
• City of Mesa
• City of Phoenix
• City of Tucson
• County of Maricopa
• Freeport-McMoRan Copper& Gold Inc.
• Glendale Union High School District #205
• Northern Arizona Public Employees Benefit Trust
• State of Arizona
• Tucson Electric Power Company
• United Food and Commercial Workers & Employers Arizona
• US Airways, Inc.

Health and Human Services Secretary Kathleen Sebelius said about the program:  “Many Americans who retire before they are eligible for Medicare see their life savings disappear because of medical bills and exorbitant rates in the individual health insurance market. The Affordable Care Act’s Early Retiree Reinsurance Program will make it a little easier for employers to provide high-quality health benefits to their retirees as we work to put in place market reforms to lower costs for all.”

So, congratulations to all those Arizonans who were lucky enough to work for state and local governments and businesses that allow them to keep their health insurance when they retire before they are 65.  As an insurance agent, I have met too many people in their early 60’s who are without health insurance because they did not have such generous employers. And too many of these people have been deemed “un-insurable” because of high cholesterol, or diabetes, or breast cancer, or prostate cancer that was cured five years ago.

At least it’s good to know that our Arizona government is benefiting from the Affordable Care Act.

I was talking to a client this weekend and she is clearly not a fan of “Obamacare”, as she called it.  As we talked, she raised several of her concerns about the future of Medicare and health care in general.  I thought it was interesting that each of her concerns is addressed under the Affordable Health Care Act that was passed earlier this year.

Relief in the Donut Hole:

“Karen” (name changed) takes several brand drugs and will go into the donut hole in September.  She said she was fortunate last year that her doctor gave her samples of Plavix so she didn’t have to pay full price while she was in the donut hole.  This year she says she’s going in the donut hole even earlier.

I told Karen that she will receive a check for $250 when she goes into the donut hole this year – thanks to the Affordable Healthcare Act. I told her she will get more relief next year when she will pay half-price for her brand name prescriptions while in the donut hole.  I also told her that the Affordable Health Care Act includes the phasing out of the donut hole over the next several years.

Karen was pleased to learn that she will get some help with her high drug costs and she had not heard of these benefits that are part of the Affordable Health Care Act.

Holding the Line on Expensive Imaging Tests:

Karen’s last job was with a group of orthopedic specialists and she said she thought they ordered too many MRIs and other expensive tests.  She also said this group of doctors owned the imaging center to which patients were referred.

I told Karen that the Affordable Health Care Act cuts payments to doctors for many of these expensive tests and sets new rules for doctors who have a financial interest in imaging centers and equipment.  These new rules are designed to cut down on the rising number of MRI’s, CT and PET scans, many of which seem to benefit the doctors’ bottom line more than their patients.  Karen thought this was a good idea.

Focus on Primary Care doctors:

Karen said her experience with specialists showed her that they make lots of money, but she is concerned about primary care doctors because she has heard there are not enough of them to treat new patients and the elderly.

I informed Karen that the Affordable Healthcare Act will raise the Medicare payments for primary care physicians by 10%.

Going Broke from Medical Bills:

Karen said she has an ongoing fear that a chronic illness or cancer might wipe out the money she and her husband  have saved up for their retirement.  Karen has a Medicare Advantage plan and I reminded her that she has a cap on her annual out-of-pocket expenses.  So if she spends $3,400 on co-pays for medical services during the year, she will hit her cap and will have no more co-pays for the rest of the year.

I told Karen that the Affordable Health Care Act requires that all Medicare Advantage plans have such a cap starting in 2011.  Karen is already in a plan with a cap because I don’t suggest people enroll in a plan without one.  Next year every Medicare Advantage plan will have a cap on enrollees’ expenses.

Karen was relieved to hear this news. She had forgotten about this detail in her plan and she said she would sleep better knowing that she has some protection from medical bills.

As we ended our conversation I did not ask Karen if her view of “Obamacare” had changed.  I don’t want to get into political discussions with clients, but I clearly need to educate them about the very positive benefits that are coming to their Medicare coverage as a result of the Affordable Healthcare Act.

Seniors who have gone into the Part D donut hole will be getting a check from Social Security for $250, and scam artists are using this news to their advantage.  Apparently, crooks have been calling seniors telling them they need to provide personal information in order to get the $250 rebate check.  In fact, seniors and younger Medicare beneficiaries do not need to do anything to get their rebate check because Medicare has their prescription expense information. When a person hits the donut hole, a $250 rebate check will be generated and mailed to the address that Medicare has on record for that person.

A person enrolled in a Medicare Part D drug plan falls into the donut hole when what she has paid out-of-pocket for prescriptions and what her drug plan has paid for her prescriptions add up to $2,830.  Part D drug plans are offered by insurance companies and the companies send out monthly statements to people enrolled in their plans. These statements tell people how close they are to the donut hole each month.

When a person falls into the donut hole, she will then have to pay 100% of the cost of her prescriptions. People who take two or three brand name prescriptions are likely to go into the donut hole.  The more expensive the prescriptions are, the sooner the person will go into the donut hole.

The $250 rebate check is small consolation, but next year more relief is on the way.  In 2011, seniors who go into the donut hole will pay only 50% of the cost of their prescriptions.  The pharmaceutical companies  have “generously” offered to cut the cost of drugs by 50% for people who fall into the donut hole.  The Affordable Health Care Act that was passed this year requires drug companies to agree to this discount in order to participate in Part D.

Because so many scammers are targeting seniors, Medicare is spending millions of dollars in radio, television, and newspaper advertising to tell seniors not to give out personal information over the phone. If someone calls saying they are from Medicare or Social Security, the senior should not speak to them.  Medicare and Social Security do not call seniors.

CLICK HERE FOR A DETAILED EXPLANATION OF PART D AND THE DONUT HOLE.