Health Care

Health Care in 2011

By Roger Linnett

The following is part of a continuing series, summarizing the benefits that will go into effect in 2011 as part of the Affordable Care Act, which President Obama signed into law on March 23, 2010. The first article appeared in the September, 2010, issue. Unless otherwise noted, benefits take effect as of Jan. 1.

As in the previous article, benefits are categorized under three headings:

Improving Care and Lowering Costs

• To start closing the “Donut Hole”, seniors who reach the coverage gap in their prescription drug coverage will receive a 50 percent discount for “Medicare Part D”-covered, brand-name prescription drugs. The discount will increase annually until the gap is closed in 2020.

• Certain free preventive services, such as annual wellness visits and personalized prevention plans for seniors on Medicare begin.

• A new Center for Medicare & Medicaid Innovation will be established to find new ways to improve the quality of care and reduce the rate of growth in health care costs to patients for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

• 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.

• The Independent Payment Advisory Board will begin operations to develop and submit proposals to Congress and the President aimed at extending the life of the Medicare Trust Fund.  The Board will focus on ways to target waste in the system, reduce costs, improve health outcomes for patients and expand access to care.

Administrative funding becomes available October 1, 2011.


Increasing Access to Affordable Care

• The new Community First Choice Option allows States to offer home- and community- based services to disabled individuals through Medicaid instead of institutional care in nursing homes. Effective October 1, 2011


Holding Ins. Companies Accountable

• To help bring down health care premiums, the new law generally requires that, at least 85% of all premiums for large employer plans, and at least 80% of the premiums from individual and small employer plans, must be spent on benefits and quality improvement. If insurance companies do not meet these goals, because of excessive administrative costs or profits, they must provide rebates to consumers.

• Today, Medicare pays insurance companies that provide Medicare Advantage (MA) over $1,000 per person more, on average, than is spent per person in traditional Medicare. This results in increased premiums for all Medicare beneficiaries, including the 77 percent who are not currently enrolled in a Medicare Advantage plan. Over the next three years overpayments to MA providers will decrease to eliminate this discrepancy. People enrolled in a Medicare Advantage plan will still receive all guaranteed Medicare benefits. (Medicare Advantage is actually not Medicare at all. It is private insurance paid for through Medicare, but the insurers charge Medicare 14% more than an individual would pay, in exchange for “enhanced services”, such as a spa membership or free glasses. The Obama administration intends to phase out MA, saving the government an estimated $156 billion over ten years.)

Information for this article was compiled from:,,, and The Center on Budget and Policy Priorities –   b


Categories: Health Care, Roger Linnett

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