The bill does not contain cuts to traditional Medicare benefits. However, Medicare payments for home healthcare would be reduced by $40 billion between now and 2019. And certain payments to hospitals would be cut by $22 billion over that same period.
The bill would bolster the existing Medicare prescription-drug benefit by addressing part of its “doughnut hole” problem.
Right now, after a senior has spent $2,700 on drugs in a year, coverage stops until that same person has spent $6,154 on drugs, when it starts up again.
Hence the “doughnut hole” nickname.
Beginning in 2010, people who fall into this hole will get $250 from the government to help. Thereafter, according to the bill, the US will gradually increase the percentage of drug costs it pays within this gap. By 2020, the US will pay 75 percent of senior drug costs between $2,700 and $6,154.
Medicare will also begin to pick up the tab for annual wellness visits.
Medicare payment advisory board
Healthcare reform legislation also establishes what it terms an Independent Payment Advisory Board, made up of 15 members, that would submit legislative proposals to reduce per capita Medicare spending if that spending grows too fast.
“Too fast” is defined as exceeding the growth rate of Consumer Price Index measures for a five-year period that ends in 2013.
If that happens, beginning in 2014, this board will submit proposals to Congress and the president for consideration.
Some critics have charged that this board will be the leading edge of Medicare reductions. Legislative wording in the healthcare reform bill prohibits the board from submitting any idea that would ration care, raise taxes, or change benefits.