Health Care Reform Overview and Q&A 0510

As you know, President Obama signed into law H.R. 3590, the Patient Protection and Affordable Care Act. There's no doubt that the health care reform legislation will change things for all of us. The legislation has far-reaching implications which will be phased in during a multi-year implementation period beginning in the coming months.

How will enrollment periods be affected?
-For 2011 Plan Year, the Annual Election Period (AEP) remains the same, November 15-December 31, but the Open Enrollment Period (OEP) that normally runs from January 1 - March 31 will be replaced with the Annual Disenrollment Period (ADP). ADP will run from January 1 - February 15. During ADP Medicare Advantage members will only be allowed to disenroll from their Medicare Advantage plan back into traditional Medicare. In addition, if their disenrollment causes them to lose their prescription drug coverage, they will be allowed to select a new standalone Prescription Drug plan.

NOTE: Per the 2011 CMS Call Letter, AEP will also change for the 2012 Plan Year; the AEP will be October 15-December 7, 2011. AEP will actually be one week longer in 2011 for 2012 effectives.


What are some of the key changes that will take effect in the near-term?
-Closing the Medicare Part D coverage gap or "donut hole" --Many of our members with Part D or MAPD coverage already have some or the entire Part D coverage gap covered.
--A $250 rebate will be issued to each Part D member who reaches the Part D coverage gap in 2010. --Beginning in 2011, seniors will receive a discount for brand-name drugs while they are in the coverage gap. ---For brand-name drugs, pharmaceutical manufacturers are required to provide a 50% discount on prescriptions filled in the Medicare Part D coverage gap beginning in 2011 (in addition to federal subsidies of 25% of the brand-name drug cost by 2020, phased in beginning in 2013).
---For generic drugs, the law provides federal subsidies of 75% of the generic drug cost by 2020 for prescriptions filled in the Medicare Part D coverage gap (phase-in begins in 2011).

--The legislation also gradually phases down the beneficiary coinsurance rate in the Medicare Part D coverage gap from 100% to 25% by 2020


Preventive Services
-Cost-sharing for proven preventive services in Medicare are eliminated, so in 2011 preventive services will be covered 100% through Medicare. -Many of our members already have coverage for these preventive benefits with our plans.

Medicare Advantage program payments reduced
-Beginning in 2011, Medicare Advantage revenue reimbursement benchmarks are frozen for one year and then reduced in subsequent years; this may result in reduced benefits and/or increase member cost-sharing.

What are some of the key changes that will take effect in the long-term?
-Other, more comprehensive insurance reforms will begin in 2012. Many of the more significant changes to the Medicare marketplace - such as new payment methodologies, Part D revisions, new beneficiary enrollment periods and other changes - take effect between 2012 and 2017.

Many of the new laws require federal agencies to issue more detailed regulations that will guide implementation, and we will share more information when it is available.