Thursday the Supreme Court upheld the entire proposed health care law, concluding that Congress was acting within its powers under the Constitution to require most Americans carry a health insurance policy. This ruling is considered a victory for President Obama and the Democratic Party, passing the biggest reworking of the health care system since Medicare was introduced in the 1960s. This ruling also eliminates disruptions for hospitals, doctors, and employers who have spent the last two years preparing for the law to be put into place.
How has the Patient Protection and Affordable Care Act affected the senior market since its inception in 2010 and how does Health Care Reform impact the future of Medicare Supplements?
- Modernized Medicare Supplement plans, including new Plans M and N, created new opportunities for agents to sell more economical options for coverage.
- New carriers entering the market are providing more choice for consumers. The added competition is healthy and promotes new innovations to the market, including telephone and electronic applications, which can help reduce pending requirements and speed up issue time.
- Many employers are reconsidering if, or for how long, they should offer group coverage for their retired workers due to Taxation of the Retiree Drug Subsidy (RDS) effective January 1, 2013. This tax can affect large company’s bottom line by tens and hundreds of millions and many have already started transitioning from group to individual coverage using a Medicare Coordinator model.
- Deficit reduction talks have the politicians from both parties talking about ways to save money with Medicare. One suggestion is to add copayments to all Medicare Supplement plans, not just Plans M & N. Another proposal suggests charging up to a 20% tax on seniors choosing plans with First Dollar Coverage.
Other important things to note pertaining to the senior market is that from now until 2020 the “donut hole” is still in effect, with seniors receiving a 50% discount on covered brand name drugs; and, Medicare Advantage will continue with payment system reforms laid out in the ACA.
However, the debate is far from over. With the January 1, 2014 date of implementation and a Presidential election looming, there is certain to be several repeals and proposals before the final version of the health care law is agreed upon and actually goes into effect.
As an agent in the Medicare Supplement market, don’t worry. Medigap plans are the least impacted by health care reform so no big changes are on the horizon. Reduction in Medicare Advantage payment rates and the impact this will have on plan benefits appears to be the biggest unknown. For clients looking to avoid any unforeseen surprises, Medicare Supplements still appear to be the best solution for many of your clients.
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What is your take on the health care law being upheld? How do you think it will affect senior market insurance and Medicare Supplements?
Source: Red Pen Edition, Wall Street Journal, Healthcare.gov