Medicare and the new health law: How it affects you

Q: I’m a Medicare recipient. How are people like me affected by Obamacare?

A: This is no small question. We’re talking more than 50 million Americans and a program that spends more than $500 billion a year.

Medicare is the federal health insurance program for people 65 and over, and for people under 65 who have certain disabilities.

The Affordable Care Act includes many provisions that officials hope will slow Medicare cost growth, improve quality at hospitals and reduce fraud in the program.

But let’s focus on what changes in your life.

Federal officials say they’re not cutting your existing Medicare health benefits, but pay attention to these areas:

  • The new law eliminates out-of-pocket costs for most preventive services, such as mammograms, colonoscopies and an annual “wellness visit.”
  • The coverage gap in Medicare’s Part D prescription drug program – known as “the doughnut hole” – will narrow each year until it disappears in 2020.

    This year, you will fall into the coverage gap – where you pay a bigger share of your drug costs – once you reach $2,970 in prescription drug expenses.

    But now you receive discounts on brand-name and generic drugs while you’re in the gap, and the discounts grow each year until the gap closes.

If you’re a “higher-income” Medicare beneficiary, some of your costs will go up under Obamacare:

  • Since 2007, Medicare recipients with higher incomes have paid more for their Part B coverage, which is the “medical insurance” portion of the program and helps pay for outpatient medical care such as doctor visits, lab tests and durable medical equipment.

    The higher premiums kick in at $85,000 for an individual and $170,000 for a couple. Because of technical changes under Obamacare that I won’t get into here, a larger percentage of seniors will pay the higher premiums.
  • More people will pay the higher-income premiums for Part D prescription coverage as well.

Q: I’m a middle-aged male and need to buy my own health insurance. How much did you say that would cost again?

A: Since my last column was published, California’s new health insurance marketplace, called Covered California, made a big announcement.

In a nutshell, it revealed that 13 health plans will participate in the marketplace, all agreeing to cover a standard set of benefits. Depending on how much money you make, you may qualify for sliding-scale tax credits to offset the cost of premiums. (Click here to see my previous column with more details.)

(UPDATE: Covered California ended up offering 11 health plans in 2014.)

If you want to know which plans will be offered in your area (the state will be divided into 19 different regions) and how much they will cost, click here or visit coveredca.com.

We don’t yet know the exact price-tag for people of all ages or for families, but we know some details. In Orange County, for instance, a baseline plan for a 40-year-old will cost between $252 and $332 per month, with tax credits available to about 200,000 people that would lower their cost depending on income.

In the Sacramento region, the premiums for a 40-year-old will range from $332 to $476. About 126,000 people will be eligible for tax credits.

A cautionary note: All of this is pending approval from regulators and should be finalized in the summertime.

Learn more about Emily here.

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