January 1, 2011 is a key date for six new health care reforms created by the Affordable Care Act. Seniors primarily benefit from this current round of reforms but premium vs profit restrictions on insurance companies will benefit all group and individual medical insurance consumers.
- Bringing Down Health Care Premiums - To ensure premium dollars are spent primarily on health care, the new law generally requires that at least 85% of all premium dollars collected by insurance companies for large employer group plans, and at least 80% of the premium for plans sold to seniors, individuals and small employers, must be spent on health care services and health care quality improvement. If insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to consumers.
- Prescription Drug Discounts - Seniors who reach the coverage gap will receive a 50 percent discount when buying Medicare Part D covered brand-name prescription drugs. Over the next ten years, seniors will receive additional savings on brand-name and generic drugs until the coverage gap is closed in 2020. Download a brochure to learn more (PDF, 3.6 MB)
- Free Preventive Care for Seniors - The law provides certain free preventive services, such as annual wellness visits and personalized prevention plans, for seniors on Medicare.
- Medicare Advantage Discrepancy Fazed Out - Today, Medicare pays Medicare Advantage insurance companies over $1,000 more per person on average than is spent per person in Original Medicare. This results in increased premiums for all Medicare beneficiaries, including the 77 percent of beneficiaries who are not currently enrolled in a Medicare Advantage plan. The new law levels the playing field by gradually eliminating this discrepancy. People enrolled in a Medicare Advantage plan will still receive all guaranteed Medicare benefits, and the law provides bonus payments to Medicare Advantage plans that provide high quality care. Learn more about improvements to Medicare.
- Improving Health Care Quality and Efficiency - The law establishes a new Center for Medicare & Medicaid Innovation that will begin testing new ways of delivering care to patients. These new methods are expected to improve the quality of care and reduce the rate of growth in costs for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).
- Improving Care for Seniors after They Leave the Hospital - The Community Care Transitions Program will help high-risk Medicare beneficiaries who are hospitalized avoid unnecessary readmissions by coordinating care and connecting patients to services in their communities.
For a list of all major changes created by the Affordable Care Act see Timeline: What’s Changing and When.