A Review of Important Elder Law Stories in Virginia (Part II)

Medicare54bAlthough I have covered the Affordable Care Act in detail in previous blogs, it could not be left out of any review of the important decisions from 2013, especially given its likely impact on the senior population. 

This is the second of three blogs (yesterday, today, and tomorrow) on this important topic.  I hope you find it helpful. 

Affordable Care Act

More impactful to the senior population than the individual mandate, are the changes to Medicare, the prohibition against pre-existing conditions clauses, nursing home care changes, changes to community-based long term services and supports, and the funding of the ACA. 

The changes in Medicare include prescription drug coverage that will eventually reach 25% across the board for all prescription drugs. The increase in coverage will be felt by those who spend more than $2800 per year on prescription drugs. Where there was no coverage by Medicare when the prescription drug expense of an individual was between $2800 and $4550, there will eventually be coverage of 25% for all such expenses for those receiving Medicare. 

Another Medicare change under the ACA is increased coverage of preventive care. These now-covered services include annual wellness visits, flu shots, tobacco use cessation counseling, cancer screenings, diabetes screenings and screenings for other chronic diseases. 

Finally, the ACA’s changes to Medicare include a cut to Medicare Advantage Plans. The ACA restricts the options that can be provided by these plans. This may result in fewer choices to seniors and it makes uncertain the future of Medicare Advantage Plans. 

The ACA’s prohibition against pre-existing conditions clauses received a great deal of attention in the news. This part of the law prohibits insurance companies from considering health when one applies for health care coverage. It also prohibits insurance companies from charging varying amounts to individuals based on heath, sex, age or other factors. The elderly will benefit from this portion of the law as the risk of insuring them will now be evenly distributed among the entire population, old and young alike. 

Another major change affecting seniors under the ACA concerns nursing homes. The ACA requires the Center for Medicare and Medicaid Services to provide a consumer-friendly website, posting comprehensive information regarding nursing homes. This website is to provide data regarding the nursing home’s inspections, complaints and number of violations received. It will also identify the owner of the home and show expense reports comparing resident care costs versus administrative costs. In addition, the ACA will make it easier to file complaints against a nursing home. 

In the event a nursing home decides to close its doors, the ACA has built in protections for residents of the home. The ACA mandates notice far enough in advance that all its residents can relocate. Further, it requires that the home ensure all residents have successfully relocated prior to closing. 

There are other parts of the ACA that will potentially benefit those in need of nursing homes as well, including additional federal funding (at the option of the state) to help with background checks of staff. 

The ACA provides several options to states to expand home and community-based care under Medicaid. These options will fall largely to the states to exercise and implement. 

The portions of funding the ACA that will be felt by our senior clientele include: the cuts to Medicare Advantage Plans[1]; a surcharge tax of 3.8% to unearned income[2]; an increase in the floor for medical expense deductions from 7.5% to 10% of AGI; and a .9% Medicare payroll tax on high income earners.[3]

Part III is tomorrow's blog.

[1] The cuts to Medicare Advantage Plans are to be $145 billion over a ten (10) year period.

[2] This surcharge will be applied to unearned or investment income of singles with an annual income of over $200,000 and of couples with an annual income of over $250,000.

[3] High income earners are defined as taxpayers with over $200,000 in earned income for a single taxpayer and over $250,000 for families.

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