Monthly Column - July, 2004

The Medicare Act of 2003:
More Than Just Prescription Drugs

The Medicare Act of 2003 includes provisions that affect several aspects of the Medicare program. The legislation not only provides for the current prescription drug discount program and the drug benefit going into effect in 2006, it also extends some programs and begins some new programs that will help certain beneficiaries. The Act, however, also implements changes which will have an adverse effect on seniors in the future. These provisions will be implemented throughout this decade and into the next.

The new Medicare law includes a provision extending the "QI-1 program," which provides assistance with Medicare Part B premiums to low-income individuals, until the end of September 2004. According to the Connecticut Department of Social Services, the extension of this program will effect approximately 6,800 Medicare beneficiaries state-wide. The moratorium on the cap on the amount Medicare will pay for outpatient therapy services was lifted through December 31, 2005. This provision will permit beneficiaries with on-going physical, occupational and speech therapy needs to continue receiving Medicare coverage for those services. In January 2005, several provisions will go into effect which will provide some additional preventive benefits. New Medicare enrollees will be eligible for one physical examination within six months of enrolling in Part B (however this benefit does not include associated lab work and is not available to current enrollees). Certain cardiovascular screening blood tests will be available every two years and blood glucose tests will be available to screen individuals who are at risk for developing diabetes on the basis of other contributing health factors.

While the new law provides for these additional benefits, it also contains provisions which will negatively affect beneficiaries. Many people are not aware of these provisions due to the government's and media's focus on the Medicare prescription drug benefit and discount cards. For example, beginning January 1, 2005, the Part B deductible, which has not changed since 1991, will be increased to $110 and will continue to increase annually. This provision will apply to all Medicare beneficiaries, increasing their out-of-pocket expenditures incrementally over time. In January 2006, the Act provides that no new Medigap plans H, I or J, which cover prescription drugs, can be sold, except to those individuals who are already enrolled. While two new Medigap plans are to be made available in 2006, these plans will not offer prescription drug coverage and will provide less coverage for Medicare co-pays and deductibles. Effective January 1, 2007, individuals with incomes over $80,000 per year and couples with incomes over $160,000 per year will have to pay a greater share of the Part B premium for the first time ever. If implemented, this will be the first income-based premium in the history of the Medicare program. Finally, in 2010, the Act provides for competition to begin between traditional Medicare and managed care plans in designated parts of the country.

Medicare beneficiaries and those who will become eligible for Medicare in the next few years should be aware of the additional impact of the recent legislation. With dozens of bills currently being proposed to change the Medicare Act of 2003, now is the time for beneficiaries to find out more about what the Act includes and contact their Congressional representatives and Senators to voice their support and concerns.