Health bill impacts on seniors


Some good and bad benefits for seniors

The massive health care bill President Obama signed March 23, 2010 will affect nearly all American families. The 2,407-page bill and its 153-page package of corrections, likely to gain final Senate approval soon, has something for just about everyone. Seniors will not be missed. Several items of impact for this group are good news, some bad, according to USA Today.

Medicare recipients gain drug coverage

AARP, the nation’s largest seniors watchdog organization, says most of their senior followers should benefit from a number of provisions. Some simple, some complex and some for the wealthy, some for the poor.

Seniors will gain additional prescription-drug coverage, closing the coverage gap on the notorious “doughnut hole,” the Medicare Part D out-of-pocket costs provisions. Created in the original program in 2006, seniors whose total drug costs reach $2,830 now must pay for all their drugs until they have spent $4,550. A provision in the new law will close that cost gap, and prevents them from having to pay thousands for these deductible costs.

The bill provides that seniors who reach the established coverage gap will now be eligible for a one-time, $250 rebate with future considerations too. Beginning 2011, brand-name drug prices are to be discounted 50% during their coverage gap time period. Each year until 2020, the drug discount will increase, finally reaching 75% of the cost.

Other seniors good benefits

Additional benefits for seniors are spelled out in the bill. Free preventive services such as cancer screenings, funding for all states to increase and improve community services for people with disabilities, and upping children’s age on policies. For those seniors who have children and insurance policies including them, the children will be able to remain on parents’ policies until they reach the age of 26.

Also, poor adult seniors will get Medicaid and Low-income senior families will receive federal subsidies to buy insurance. This will be a welcome assistance to those that decided or were thrust into to helping raise families in their later years.

Some senior bad benefits

On the other hand, those seniors who have Medicare Advantage plans — those select private plans combining hospital, physician and drug coverage — could watch premiums increase or have benefits diminished. The new law reduces Medicare payments to those plans and approximately 23% of all Medicare beneficiaries have those plans.

Also, seniors who still work or live off of investment income will see their capital gains taxes increase to help pay for the bill. Beginning in 2013,for the first time, the Medicare payroll tax will be applied to income from investment. The new 3.8 percent tax will impact seniors’ interest, dividends, capital gains and other investment income for those individuals earning more than $200,000 a year and couples making more than $250,000.

Medicare wage payroll taxes will increase for working seniors. The new health bill also would increase the Medicare payroll tax by a 0.9 percentage point to 2.35 percent, on wages above $200,000 for individuals and $250,000 for married couples filing jointly.

The new tax on investment income is higher than the 2.9 percent tax proposed by President Obama. “House Democratic leaders increased it so they could reduce the impact of a new tax on high-cost health insurance plans strongly opposed by labor unions. The 40 percent tax on health benefits would be delayed until 2018 and would apply only to premiums exceeding $10,200 a year for individuals and $27,500 for families,” according to FOX news.

Seniors of all ages, retired and those still working, will be impacted by the new health care bill, both good and bad. Only time will tell what the total costs to the country will be for them their children, and their grandchildren.

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