Section 3308 requires part D enrollees that exceed certain income thresholds will have to pay higher premiums. It revises the current authority of the IRS to disclose income information to the Social Security Administration for purposes of adjustment, of the part B subsidy. It is an increase in base beneficiary premium based on income. An individual whose modified gross income exceeds the threshold for a calendar year, the monthly amount of the beneficiary’s premium shall increase by a monthly adjusted amount. There is a 25% increase in the portion of income one must exceed to write of any medical expenses. There is exemption of seniors of 65, while disabled and pre retiree’s medical expenses must reach 10% of their income before writing it off. So people with a higher income level will have to pay more of a premium because it will cost them more to reach 25% of their income compared to someone who can write it off at 10%.
Medicare part D is a program to subsidize costs of prescription drugs for Medicare beneficiaries. This section states that these beneficiaries must pay for more of a premium based on the amount of their medical expenses compared to their income level. This will have no effect on the individuals over 65 and retired under Medicare part D. It will mainly affect an individual under part D under 65, pre retired or disabled who will have to reach 25% of their income before they write of any medical expenses or 10% in the case of a pre retiree or disabled individual.
Sec. 3309 may sustain Medicare by decreasing costs through higher premiums to those who can afford it. If enrollees under part D can afford to pay a higher portion of their premium to reduce Medicare spending it could prove to be beneficial to our healthcare system.
Section 3309 will eliminate cost sharing for certain dual eligible individuals receiving there care under a home and community-based waiver program that would otherwise require institutional care. This will affect dual-eligible individuals who are entitled to Medicare Part A and/or Part B and are eligible for some form of Medicaid benefit and receive care under a home and community based waiver program. Medicare part A is hospitalization costs and part B is Physician costs.
These certain individuals under Dual-Eligibility, who this benefits will not have to pay part of their healthcare costs through cost sharing. Dual eligible’s account for 14% of Medicaid enrollees and 18% of Medicare beneficiaries, which is mainly all elderly and beneficiaries with disabilities in Medicaid. So this section will mainly affect low income senior citizens and people with disabilities. The majority of Dual eligibles receive full Medicaid benefits and assistance Medicare premiums and cost sharing, and the rest only receive assistance with Medicare premiums and cost sharing.
Because these individuals require extensive healthcare needs, they are a high cost to Medicaid and Medicare. Although cost sharing has been proven to reduces spending and the number of episodes of treatments, eliminating cost sharing for dual-eligible’s who are under community or a home based waver program wouldn’t pose that big of a threat. These individuals are already low income seniors in bad health and have assistance with cost sharing anyway.