Health Reform Tweaks Seniors' Medicare

Mort and Maida Genser cobiella medicare evening news CBS

A lot of Americans are not sure how health care reform will affect them, including the 39 million seniors on Medicare. Nearly seven out of 10 of them choose Medicare for their prescription drug coverage, and there are changes coming.

Almost 27 million seniors who get their prescription drug coverage from Medicare will see a change this year, reports CBS News Correspondent Kelly Cobiella.

Complete Coverage: Health Care Reform

"This year, seniors who fall in the coverage gap known as the doughnut hole will start getting some help," are the words President Obama has used to describe that change.

Seniors fall into the doughnut hole once they hit their $2,830 limit. Then they have to pay $3,610 out of pocket for drugs before prescription coverage picks up again at $6,440.

This year, seniors who fall into that doughnut hole will get a $250 rebate. In 2011, they will receive a 50 percent discount on brand-name drugs. Also, seniors will receive a 7 percent discount on generic drugs, which will increase 7 percent every year thereafter.

In 2020, the doughnut hole will close, meaning seniors will receive no gap in coverage.

Starting next year, the legislation also gives all seniors free annual wellness exams and preventive tests, like screenings for high blood pressure and certain cancers.

Yet some seniors who make $85,000 or more a year and already pay more in premiums for doctor's visits and prescription drug coverage will see those premiums go even higher depending on which plan they choose.

The 11 million seniors who buy Medicare Advantage plans could pay more as well. The bill cuts $136 billion in subsidies over the next 10 years to private insurers who offer those plans as an alternative to original Medicare. The insurance industry says premiums will rise as a result of the cut though it's not clear by how much.

Mort and Maida Genser are still trying to do the math. Mort Genser takes 18 prescription drugs. They'll qualify for the $250 rebate this year and the 50 percent discount on brand-name drugs next year.

"That may help a little to pay $150 instead of $300," Maida Genser said. "That at least is significant."

More Details of the Bill

Summary of What's in the Bill
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Already Insured? Get Ready to Pay More
Feds Eye Big Savings from Health Reform
How Health Reform Affects Small Businesses
Provisions Which Take Effect in Short-Term
Read the Text (PDF): Complete Senate Bill | Reconciliation Measure

In fact, they'll save more than $700 in drug costs next year, but they may have to spend more on their Medicare Advantage plan.

"Right now, we're just getting by, so I'd hate to see it get any worse than it is," Mort Genser said.

Like many seniors, they're taking it one step at a time, waiting to see if they'll come out ahead.

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  • Kelly Cobiella

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