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After Congress passed the biggest overhaul in Medicare's 38-year history, many seniors may be confused about what the changes will mean for them. Some answers:
Q. How will this bill help pay for my prescription drugs?
A. Medicare beneficiaries who join HMOs that provide prescription-drug coverage or buy drug-coverage policies from private insurers will get help with their medicine bills.
Q. How much will this benefit cost?
A. Seniors will pay an average monthly premium of $35, which could rise if drug costs increase. After a $250 deductible, Medicare will cover 75% of drug costs up to $2,250 and then nothing for drug costs between $2,250 and $5,100. After that, Medicare will pay 95% of drug bills.
Q. What if I am a low-income senior?
A. Low-income seniors do not pay premiums or deductibles. Depending on their income, they would pay either $1 or $2 per generic prescription and $2 or $5 for brand-name drugs. But an estimated 1.8 million seniors won't qualify for the low-income benefit because of an assets test.
Q. When do the prescription drug benefits start?
A. In 2006.
Q. But I need help sooner.
A. Starting in the spring, seniors will be able to buy a discount card for about $30 that administration officials say will save them 15%-25% per prescription. Low-income elderly people will also get up to $600 a year to help pay for drugs next year and in 2005.
Q. Will my Medicare Part B payments for doctor visits be affected?
A. Yes. Starting in 2007, seniors with incomes of $80,000 or more will pay higher premiums for their share of the Part B premium, which covers doctor visits and outpatient care. Those below that level will continue to pay 25% of the premium. Wealthier seniors will pay higher percentages, up to 80% for those with incomes of $200,000 or more.
Q. Are there any tax benefits in the bill?
A. Yes. Starting next year, pre-retirement-age workers who have health insurance plans with high deductibles will be able to save money in tax-free accounts to cover health care. Individuals can put away the amount of the deductible, up to $2,250 a year ($4,500 for families), to cover health expenses. Withdrawals for non-medical purposes will be taxed.
Q. Will I have more health plans to choose from?
A. Perhaps. Some health plans that dropped out of the Medicare system in recent years may return. The bill will allow higher payments to health plans from a $12 billion fund to entice them to enroll seniors.
Q. What about this private competition experiment I have heard about?
A. Starting in 2010, about 2 million seniors in six metropolitan areas will be able to choose between traditional Medicare and private plans during a six-year experiment.
The test areas have not been chosen, but affected seniors might have to pay up to 5% more a year if they opt to stay in Medicare instead of switching to cheaper private insurers.
Q. I have drug coverage from my former employer. Will that continue?
A. Maybe. The bill's supporters say more than $80 billion in tax breaks and subsidies to employer plans will encourage them to continue retiree coverage.
But the Congressional Budget Office estimates about 2.7 million seniors could lose benefits that may be more generous than those that will be offered under Medicare.
Q. Will the bill limit rising health care costs?
A. Depends on whom you ask. The bill requires Congress to rein in costs if Medicare must get more than 45% of its funding from general treasury revenue instead of payroll taxes, premiums and other sources.
Critics say the bill is flawed because it doesn't allow Medicare to negotiate cheaper drug prices the way the Department of Veterans Affairs does for veterans.
That job will go to private plans, which have less market clout than Medicare with its 40 million beneficiaries.
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