WELCOME Straight Talk Webinar

WELCOME Straight Talk Webinar
This session will begin promptly at 3:30pm EST Please mute your phone To hear the audio, please dial x The moderator will be on the line shortly You don’t need this slide for your presentation of course….

Straight Talk for Seniors: How Will Health Care Reform Change Your Health Care?
September 2010 As you prepare to give this presentation, please be sure to print out a copy with these readable notes You can print copies for your seniors/staff but including these notes is up to you Make sure the font is large enough to be readable by your audience Please feel free to change the MONTH and YEAR

National Council on Aging (NCOA)
Improving the lives of older Americans since 1950 A quick back-story on NCOA, who provided this material NCOA has been around since 1950 and is known throughout the aging services world. Our three main goals are: Helping Seniors Enhance their Economic Security Improving Senior Health through Evidenced-Based Programming Helping to Strengthen Community Organizations that serve seniors locally and nationally Enhancing Economic Security Improving Health Strengthening Community Organizations

Our Goal Today Just the Facts, Ma’am. Just the Facts.
Our goal today is to provide Just the Facts. No spin from those who support health care reform and no spin from those who oppose it. These are the facts in the law. You are entitled to your own opinions but not your own facts.

The A-B-C-D’s of Medicare Health Reform Changes to Medicare Finances
Just the Facts About…. The A-B-C-D’s of Medicare Health Reform Changes to Medicare Finances How Health Reform Changes Affect YOU This PPT is broken up in to these three sections and this is what will be discussed today.

1 Section 1 - How Medicare’s 4 sections are financed The ABCD’s of Medicare

Medicare is Difficult to Understand!
But first – a quick cartoon about how Americans felt about US Health Care a few months ago (and maybe still do, especially about the maze of Medicare?)

The A-B-C-D’s of Medicare
Part A – Hospital Insurance Inpatient care, including skilled nursing Paid for by payroll taxes Concerns about future solvency This is Part A which covers reasonable & necessary hospital stays, skilled nursing facility stays, some home health care and hospice Most people get Part A coverage premium free – if you’ve worked in the U.S. for at least 10 years – Part A is primarily financed through payroll taxes; employees and employers each pay 1.45 percent of wage earnings (self-employed individuals pay 2.9 percent). Revenue from the payroll tax is held in the Hospital Insurance Trust Fund and is used to pay Part A benefits.

Part B - Outpatient Health Insurance Pays for additional medical services (like doctors visits, diagnostic tests, and outpatient care) Financed 75% by general revenues, 25% by monthly premiums ($96.40 or $ in 2010) Part B covers many medical services, mostly out-patient - doctor's services, diagnostic tests, physical therapy, preventive screenings and outpatient care Most everyone pays a monthly premium – this year it’s $96.40, unless you’re new to Medicare, in which case you are paying $110.50 Medicare beneficiaries with limited income and resources can receive help and those who qualify get Part B for free – no premium Part B is financed by beneficiary premiums and by federal general revenues. Premiums collected from beneficiaries cover about 25 percent of total annual costs for Part B services. The rest come from the general fund.

Part C - Medicare Advantage (MA) Private health plans (e.g. HMOs and PPOs) that deliver Medicare services 24% of Medicare recipients are in MA C Part C is private plans run by insurance companies. They offer Medicare plans, known as Medicare Advantage Part C was revamped by passage of the Medicare Act in 2003 Under Part C, Medicare (the federal government) pays the private insurance companies that run the plans a flat fee and the company must provide Part A and Part B services to members. People with Medicare can choose to join one of these plans. When they do, they might also pay an extra premium (on top of their Part B premium) to the plan. Almost 25% of people with Medicare have joined these kinds of plans. Plans can also provide extra services like eyeglasses and hearing aids – the extra premium pays in part for the extra benefits. Congress decided that starting in 2006 to pay insurance plans about 11% more than Medicare pays for beneficiaries in traditional Medicare (although this is now Changing with the new law and will be discussed later in this presentation) Part C is not separately financed; these plans receive payments from Medicare to provide Medicare- covered benefits, including hospital and physician services, and in most cases, prescription drug benefits. That means everyone on Medicare pays for the extra payments made to these plans.

Part D - Prescription Drug Coverage You choose your plan Includes a coverage gap for “donut hole” Paid for by general revenues 2003 law was not paid for Part D is Medicare’s help with prescription drugs. To get this coverage people with Medicare must join a private plan. Most of the drug plans are run by insurance companies For every person who enrolls in a plan, Medicare pays the insurance company that rums the plan about $9,900 per year, regardless of the amount or cost of the drugs they use. In a Part D plan, you usually pay a monthly premium and many also have an annual deductible that you have to meet by paying out of pocket until you and your drug plan together have spent a total of $2,830 on drugs the plan covers at a pharmacy in the plan’s network. The you enter the donut hole. To reiterate, when total yearly drug costs (between you - $650 in deductible &/or copays or coinsurance - and your drug plan ($2170) are more than $2,830 you go into the coverage gap. In the coverage gap you have to pay the full price your plan sets to get your drugs until you’ve spent another $4.450 on covered drugs at an in-network pharmacy. Then you can get a catastrophic benefit where you pay no more than 5% of the cost of your covered drugs for the rest of the calendar year. As an immediate benefit of HCR, the federal government is automatically sending out $250 checks to seniors who reach the donut hole in According to the government, around 4 million people will go into the donut hole and get a check for $250 this year. The first checks went out in June and the checks are automatic if you reach the donut hole. Part D is financed through general revenues, premiums paid by Part D enrollees, and state contributions to Medicare drug costs. Anyone with Part A and/or B is eligible for Part D

Many believe that rate of spending on Medicare cannot be sustained The number of people with Medicare will grow rapidly as Boomers age. Medicare spending is increasing faster than the rest of the economy. This slide describes future demographics and spending issues.

Health Reform Changes to Medicare Finances
2 So as we turn our attention to health care reform, we will start with the big picture. What will happen to Medicare’s finances as a result of the new law? Health Reform Changes to Medicare Finances

The Basic Math of Medicare Under Health Reform
$7.15 TRILLION = Projected total Medicare spending before health reform ( ) $6.75 TRILLION = Projected total Medicare spending after health reform ( ). -$400 BILLION = Net 10-year reduction in overall Medicare spending due to health reform (from 6.8% average yearly increases to 5.7% yearly increases). Net reduction in per capita spending (after inflation) from 4% to 2% annually But Remember: + $500 BILLION = Net 10-year increase in Medicare spending due to 2003 Medicare prescription drug law (not paid for). This slide discusses the massive math involved around Medicare and health care reform. Note the $400 billion reduction is not from Medicare covered benefits. It comes from slowing the rate of spending increases, meaning reimbursement to certain types of medical providers are slowed down, and increasing certain revenue sources, as we’ll see in a few moments. This is important to understand – benefits are not being cut, nor are doctors’ payments to take care of people with Medicare.

Questions about Health Reform and Medicare
The new law will result in future cuts to your basic Medicare benefits. True, False, Don’t Know Interspersed throughout this presentation are questions from NCOA’s field poll. This can help make your presentation more interactive and fun. Answer: False 15

Financial Changes to Medicare
Increased Revenues Higher payroll taxes for wealthy workers ($200/$250,000) Higher Part D premiums for 5% of higher-income Medicare beneficiaries ($85/$170,000) 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 % overall or from 4% to 2% per person Some background on exactly what revenues will increase and what spending will decrease. Figures are adjusted gross income

Health Reform Financial Changes to Medicare
Medicare solvency extended for 12 more years Increased funding to improve some Medicare benefits One of the key successes from the new law is that it will extend the solvency of the overall Medicare program for 9-12 more years depending on which independent resource you follow. Projections farther out than that are much harder to make. Of course nobody can predict the far distant future, and that’s why the projections do not extend further out. From 2017 to 2026 (according to the Congressional Budget Office – CBO) From 2017 to 2029 (according to the Centers for Medicare & Medicaid Services - CMS)

What About the Federal Budget Deficit?
Congressional Budget Offices estimates health reform will save $124 billion over 10 years. ! The independent, non-political Congressional Budget Office (CBO) is the group responsible for revenue (tax) and health reform cost estimates CBO has estimated that the reductions in spending and new revenues coming in under the new law will be greater than additional spending going out for new benefits CBO has projected that the new law will reduce the federal budget deficit by $124 billion over 10 years and that these reductions will continue in the following decade Other likely government health spending not in the law are not included in the estimate (eg. doctor payment fix) Note: People have always had disagreements over the accuracy of CBO’s estimates, but they are the most objective data anyone has

How Health Reform Changes Affect You
3 The final and probably most relevant section, how the changes in the new law will affect seniors How Health Reform Changes Affect You

Questions about Health Reform and Medicare
The health care reform law will cut Medicare payments to doctors. True, False, Don’t Know Another question from NCOA’s field poll. Answers: False

How These Changes Affect YOU
Changes in Doctor Payments The law provides a 10% bonus for primary care doctors The law did not address the long-standing problem of future cuts in doctor fees, which has been a problem for more than 10 years, but that Congress consistently delays in separate bills. The matter of how Medicare reimburses doctors has been a political football for more than a decade. Nobody is satisfied, so temporary “fixes” keep being enacted until Congress can design a better way to set Medicare’s doctor payments. This was NOT addressed in the health care bill and has been temporarily addressed by other legislation through November. That means it will likely be addressed again by Congress before the end of Congress has been moving this problem forward for many years. Doctors can earn a bonus if they provide more primary care to more Medicare recipients.

Improvements in Medicare Prescription Drug Coverage $250 Rebate Check for those who hit donut hole 2011: 50% discounts on brand name Rx 2020: Coverage gap completely closed This year, around 4 million people with Medicare are expected to go into the coverage gap, or donut hole. In addition to the $250 donut hole rebate check, there will be a 50% discount on brand name Rx in 2011. This discount will be applied to the amount that takes people through the coverage gap and into the catastrophic benefit, where they pay no more than 5% of the price their Rx plan charges. There is also a 7% discount on generics. That’s coming from the government so it doesn’t count to get people through the coverage gap and out of it into catastrophic coverage By 2020, there will be no coverage gap and people with Medicare drug coverage will generally pay about 25% of the cost of their drugs. There will still be catastrophic coverage for people whose drug costs are really high. They’ll get into the catastrophic coverage and pay no more than 5% of the cost.

Better Preventive Care Free annual wellness visit and prevention plan No more cost sharing – most preventive benefits free More funding for prevention services Another new feature of HCR that takes place next year (2011) is the free annual wellness visit and prevention services First time people with Medicare have ever had an annual physical and assessment of how to stay as healthy as possible Also, while not on slide, really important change next Fall (2011) – annual enrollment period for Medicare parts C & D for 2012 moving to Oct 15 – Dec 7 No more interference with Christmas holidays!

Better Chronic Care New quality improvements Pilot projects and demonstrations to test better coordination among doctors, specialists, other providers Incentives to reduce hospital readmissions Help so you can manage your own care Seniors may have access to pilot projects offering better care for their chronic conditions starting in 2011. This is significant because 80% of Seniors Have at Least One Chronic Illness (diabetes, high blood pressure, heart condition)

Other Improvements Incentive to companies to help keep premiums down for early retirees New protections against elder abuse, neglect, financial exploitation Better training for workers caring for seniors Nursing home quality improvements + A list of other improvements There has been a growing trend of companies dropping retiree health insurance. This is especially hard on early retirees, under age 65, because they aren’t eligible for Medicare (unless they are disabled). Health care reform includes an effort to encourage companies not to drop retiree coverage. The government has released the list of companies eligible to receive the incentives. The arrangement is that after the companies pay out $5000 for early retirees health insurance, the government will take care of any additional costs. Of course if companies don’t take the incentives they might keep on raising premiums for earlier retirees. HCR provision intended to motivate companies to cover these early retirees at least until they can get Medicare

Greater Access to Medicaid Home and Community Long-Term Care Services Help to stay at home – if your state adopts these important options Financial protections for spouses Program to leave nursing homes Voluntary public long-term care insurance program for full and part-time workers (CLASS) These are improvements to Medicaid home-based care – incentivize states to use Medicaid to care for people with long-term needs at home and not force people into nursing homes – usually more expensive – when they can be cared for where they want to stay – in their homes. Also, for 5 years at least, spouses of those being taken care of at home get financial protections, same as when their spouses must live in nursing homes. The Community Living Assistance Services and Support (CLASS) helps people still working to have a little money to spend on ways to stay at home after they retire if they become frail. It begins in 2013 and is a payroll deduction, not an entitlement program.

What about Medicare Advantage Plans? 24% of Medicare recipients are enrolled in Medicare Advantage plans

Question on Health Reform and Medicare Advantage
Under the new health reform law, the Medicare Advantage (MA) program will be eliminated. True, False, Don’t Know Answer: False

Question on Health Reform and Medicare Advantage
Under the new health reform law, Medicare Advantage plans will cut benefits and increase premiums. True, False, Don’t Know Answer: Don’t Know

Reduced Payments to Medicare Advantage Plans
MA plans are paid about $1,100 more per person than people in original Medicare (13% higher) Payments frozen in 2011 Beginning in 2012, these overpayments will be gradually reduced In 2012, (not next year) payments to Medicare Advantage plans will be reduced to gradually begin to reduce overpayments to plans of approximately 13 percent, in certain regions in which Original Medicare payments are high Two main changes: The new law brings MA payments closer to the average costs of original Medicare, thus reducing payments to MA plans in certain counties, mostly in urban areas. Cuts will be higher in counties where the difference between MA payments and original MA payments is high. These reductions will be phased-in in counties where the difference between the average MA payment and original Medicare payment is more than $30 per month- taking up to 6 years in some cases. The law also incentivizes MA plans to give high quality care by creating quality-based bonus payments. Plans that receive 4 or more out of 5 stars from the health plan quality rankings will receive bonus payments of 1.5 percent in 2012, 3.0 percent in 2013, and 5.0 percent in 2014 and later years; high quality plans in certain counties will receive double bonuses. The details of the quality bonuses are still being worked out and the government is including all stakehol;ders in the considerations.

Changes in Medicare Advantage (MA) Plans? Some plans may eventually reduce extra benefits, increase premiums or even leave the program New bonuses to reward high quality care New consumer protections to limit out-of-pocket costs It is possible that MA plans may reduce extra benefits like eyeglasses or gym memberships and/or increase premiums because of lower payments beginning in 2012 – this will vary by where you live and we really won’t know much until Sept 2011because neither the government nor the plans talk about this until then According to the government, most MA plans look more-or-less the same in We’ll all know the details sometime late in Sept 2010 for 2011.

If you have a Medicare Advantage plan
Don’t panic, but get informed. Shop around – research your options at Learn if you are eligible for Medicare Savings Programs, Extra Help for Prescription Drugs and/or other benefits (go to You can always return to Original Medicare. Shop around - even though there will be no reduction in Medicare payments in 2011 – it would still be good to know what your options are. Make sure if you are struggling to pay for your Rx, your health care or your food, housing etc, that you explore what benefits could help you. Your SHIP Counselors can help you. Other resources are included on the slide.

How Health Reform Affects Your Children and Grandchildren
Insurance Protections Children up to age 26 will be covered under their parent’s policies (2010) No one will be denied coverage because of pre-existing conditions or dropped because they get sick (2011) Let’s keep in mind that health care reform was mainly designed to help people UNDER 65, your kids & grandkids. So the next few slides will talk about how this affects your family. Covering kids up to age 26 is an employment health insurance requirement, not a government program. And it’s only kids; nobody else.

How Health Reform Affects Your Children and Grandchildren
CBO estimates that 32 million currently uninsured Americans will have health insurance. New tax credits and tools will help contain costs and improve quality – so we all get better VALUE.

Five Facts – The New Law Will:
Not cut your basic Medicare benefits — and it will make some benefits better. Reduce Medicare spending and the federal deficit, and extend Medicare’s solvency by twelve years. Help people find and pay for long-term care at home. Improve health care for seniors in other ways. Improve coverage and protections for younger Americans with and without health insurance. A review of the 5 facts (these will coincide with the 5-Facts hand-out that hopefully you gave your participants in this discussion – it can be found at

What questions do you have?
Our Goal Today Just the Facts, Ma’am. Just the Facts. Here we tell the audience to let us know how we did in sticking to the facts and encourage questions How did we do? What questions do you have?

Local Health Insurance Counseling Office
Straight Talk for Seniors: Will Health Care Reform Change Your Health Care? For more information: 1-800-MEDICARE Local Health Insurance Counseling Office Provide your local SHIP counselor information.

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