Obama on Medicare and Medicare Supplements
Democrats are in charge of both the White House and Congress next year, which means that changes to our healthcare system are imminent. For seniors, the two areas of focus will be Medicare Prescription Drug Plans (PDP) and Medicare Advantage (MA) plans; this means that understanding the various Medicare supplements will also be important.
The government is paying 13% more on average for Medicare Advantage plan participants than it does for original Medicare, which has put a bull’s-eye on the Medicare Advantage program. Many experts are skeptical these plans will go away, similar to the Medicare+Choice plan pullouts, which will create a stressful situation for many seniors. During his presidential campaign, President-elect Obama stated his intent to cut “excess subsidies” to Medicare Advantage plans. This means private insurers will not be incentivized to offer Medicare Advantage plans and demand from seniors will be limited as many “perks” will likely be discontinued.
Seniors seeking prescription drug coverage will likely benefit from the Obama administration for three reasons. First, Obama will save seniors hundreds of dollars by working to close the “doughnut hole” in coverage for Prescription Drug Plans (PDP). In addition, Obama plans to give government the power to negotiate drug prices for Medicare Part D, which will directly affect the prices paid by beneficiaries. Lastly, the new President will help seniors decide which drug plans will reduce their out-of-pocket expenses by promoting drug price transparency, which will require drug plans to send enrollees a list of fees paid the previous year.
While the next few years will likely bring multiple changes to Prescription Drug Plans and Medicare Advantage plans, most seniors will benefit from the Obama administration.