The onset of 2011 brings with it new hope and for health care, new sweeping changes will be enforced. According to the Wall Street Journal, these changes include imposition of new taxes on drug manufacturers, lowered costs for prescription drugs for senior citizens and imposed restrictions on tax free medical spending accounts.
These changes, which took effect on Saturday, January 1, will change the American health care landscape despite stiff opposition from both Congress and in the courts.
Leading the charge in opposing the law is the House of Representatives Republican majority, who have vowed to filibuster funding measures for the implementation of the law. They are also planning a symbolic repeal vote on the law, but both activities may not affect the enforcement of the measure as the changes were made not on spending but on how spending is done on existing funds.
Despite the uphill climb, Republicans may win some battles, such as removing budgets for staff and funding for grants needed to implement the law. There are still long-term measures to be discussed, such as the new health insurance exchanges and the planned subsidies for low income earners, both of which are slated for 2014.
The biggest beneficiaries of the new changes are Medicare recipients who fall into the gap called the “doughnut hole”. This prescription drug coverage gap enrollees, whose total drug costs for 2011 would amount to $2,840 and $6,448 would receive a 50% discount on branded prescriptions. This is a large windfall in savings compared to the previous 2010 measure of providing a $250 rebate on drugs purchased out of pocket. According to AARP, a senior’s consumer advocacy group, over three million individuals stand to benefit by getting out of the “doughnut hole” for the coming year.
While many stand to benefit, other senior citizens’ drug costs would increase this year. For Medicare beneficiaries whose annual income is above $85,000 individually and $170,000 for couples, they would receive a smaller government subsidy for Medicare Part D prescription drug coverage.
For 2011 alone, drug companies will receive the first major tax measure under the changes, where a total of $2.5 billion in taxes is projected to be collected from drug companies using their sales volume as basis of the taxation. Industry insiders fear that this tax measure would eat into the research and development budgets of the companies, making it unable to find new, more effective drugs for the market. According to the Pharmaceutical Research and Manufacturers of America statistics, the industry reportedly spent nearly $65.3 billion on research and development in 2009 alone. In response, many drug companies have agreed to make concessions with Medicare in order to cash in on the millions of newly insured individuals created by the law.
The law also provides that twenty preventive health services be free of charge for Medicare members. These include colorectal cancer screening, mammograms and smoking cessation services.
The other aspects of the law, effective 2011, are as follows:
- For those seniors with privately administered Medicare Advantage plans, the law provides fewer extra benefits, which include eyeglasses and free gym memberships because of the pending cuts on the federal budgets for services by 2012.
- For those insured outside of Medicare, the law requires insurers to spend 80% of its revenue for small group plans and 85% of revenue generated for large group plans for medical care. This measure aims to control administrative costs and lower profit margins. Those insurers who fail to comply with the requirements will be required to issue rebates to consumers by 2012.
- Consumers willalso be unable to use their flexible spending accounts or tax free funds made available for medical costs for over the counter items, unless such a purchase is done through a prescription. These include non-drug medical supplies such as bandages and other applications.
The first aspects of the law became effective last September, but many benefits, such as the ones previously stated, will kick in this year. The first benefit made effective was the requirement on insurers to allow parents insured with them to keep a child within the policy coverage until the child’s 26th birthday.
Nurse midwives will also stand to benefit from the changes. Before the law was enacted, certified nurse midwives only received 65% the rate of physicians performing the same services under Medicare. Now, these certified nurse midwives will be paid at the same rate as other medical professionals. The law recognizes the role midwives play especially in rural settings where they provide basic medical services such as pap smears and cholesterol screening. These nurse midwives also provide gynecological services to three million disabled women receiving Medicare.
If you or someone you know has been deprived of social security benefits, contact the social security attorneys at the Strom Law Firm, LLC. We will provide you with a free consultation to discuss your rights and options regarding reimbursement and recovery of your hard earned social security benefits.
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