Summer of 2012 marked the most important decision of the Obama administration.  The Supreme Court weighed in on a decision of 5 Judges vs. 4 Judges to uphold the law. 
Please note: Below are just the facts – no opinion or biased for either party is meant to be imparted.  The purpose of the blog entry is to share how this decision impacts Medicare.
Chief Justice Roberts, a republican appointed by George Bush, was the swing 5th vote.  One of the most conservative members of the Supreme Court concurred with some of his more moderate to liberal colleagues to support what he felt was in the best interest of Americans regarding the implementation of President Obama’s health-care plan.
The year is 2012.  The Supreme Court has 5 republicans and 5 democrats.  It’s not uncommon for the court to align itself along party lines.  The afternoon of the June 28, 2012 marked a surprise for many republicans, especially the ultra conservative.  The decision to uphold President Obama’s change in health-care should be a sign to Americans – regardless of the political preferences that it’s possible to place party lines aside and work together towards a solution.
Each of us may have an opinion or even suggestion of our own on this issue, however, the reality is a decision has been made by the Supreme Court.  Rarely do these decision become
overturned.  As an American, a taxpayer and a registered vote, I’m more interest on “what is” vs. “what was”, or what “could be”.  At least on this topic. My husband, son and myself are small business owners.  This will impact each of us.  OK – so now what?  It’s time to look at the facts and work within the guidelines.  Like every other decision,there are pro’s and con’s.
What’s critical is that each of us become a responsible advocate for our children, ourselves, parents and grandparents. I’m not worried so much about my son or even my husband or self.  I’m concerned about a generation that doesn’t questions authority.  By authority, I referring to lawyers, accountants, physicians, policemen… you get my drift.  The WW2 and post war generation don’t ask for second opinions, or rarely challenge the “professional recommendations or advise” received.  This is where we, the adult children of senior parents come in.
Like anything else, before any of us can advocate or coach our parents through what to do regarding their Medicare coverage and their prescription drug expenses, we first need to understand the new rules and how they impact our parent’s on a personal financial level.  In all candor, there are some very good provisions made for seniors regarding their health-care financial needs.
By the year 2020, the Medicares “black hole” or “gap” in coverage regarding prescription drugs phased out and and be covered by Medicare 100%.  What does this mean?  Seniors will be responsible for 25% of the cost of their cost of their medications up until Medicare’s catastrophic coverage kicks in.  Many seniors purchase a Medicare D (prescription drug coverage) due to this “gap” in coverage.
Let’s  break this down:
  • Before 2011 seniors who purchased medicare D for prescription coverage had to pay 100% of all prescription drugs, when expenses exceeded $2,830 until the out of pocket expense reached the “catastrophic coverage, kicking in.  Th8is translated to $4,550.00
  • Beginning in 2011, seniors who purchased Medicare D for prescription drug coverage who reaches the gap of $2,830.00, receive a 50% manufacturer discount on the total cost of “brand name” medications
  • In 2013 some of the brand name medications will be covered within the gap.  This is above and beyond the 50% manufacturer discount.
  • In 2013 retiree drug subsidy paid to employer plan sponsors will become taxable income,
  • By the year 2020, those who purchased Medicare D will also cover up to 75% of brand name prescription drugs (above the 50% manufacturer discount) and up to 75% of the generic drugs.
  • An out of pocket reduction in catastrophic coverage will be reduced by the amount of current manufacturer discounts.

Succinctly said, the overall outcome by the year 2020 will have fully phased out the existing “gap” of Medicare D’s prescription drug coverage.  Seniors will then pay a flat 25% of the total cost of their medications until catastrophic coverage kicks in.  For senior’s on medicare this is a positive change and will enable them to have not spent as much money on  their prescription drugs, therefore leaving a few more nickels in their pocket to either save or place towards other expenses.

It is not my intention to make a political statement, however, it is my intention to point out that as Americans we have an obligation to take care of our seniors and our veterans. (As Bruce Springsteen sings “We take care of our own!”) This can only be accomplished if we understand the options available to them/us as they/we age. The generation before us fought for the rights we have today and will continue to enjoy in the future.

At the end of the day, it now is what it is. Have you thought about how this will impact you or your parents bottom line when it comes to their prescription drugs? Please take a look at the monthly savings you or your parents or even grandparents will be able to re-allocate somewhere else or even save. Once you have determined the presumed dollar cost savings, please share it with us. The only way anyone will understand this, or be able to feel the impact of this, is if someone take note and makes a financial journal account and review it. If you haven’t got a handle on the dollars spent out of pocket for prescription drugs, its time you do. Only time will tell if the presumed outcome will become reality. For your parent’s sake (or yours) let’s hope it makes a positive impact on their bottom line.