AARP on Health Reform

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Ritch Steven, Chair of the AARP Arizona Advocacy Network, explains some of the ways AARP members, and others, will be affected by the national health reform legislation.

Ted Simons: As the debate continues over the merits of the national health reform package, AARP Arizona has been looking into how the law will affect its members. Here with more on that is Ritch Stevens, chair of the AARP Arizona advocacy network, and a member of the AARP national policy council. Good to see you again.

Ritch Steven: Thank you very much.

Ted Simons: What kind of reaction are you getting so far on this law?

Ritch Steven: Our members are beginning to understand it more and we are hearing more and more positive things every day as we try to explain what the law, which is inherently very complex, means to them and the benefits it can provide.

Ted Simons: What questions are you hearing most often?

Ritch Steven: What we are hearing is, what about the drug benefit? I want the doughnut hole closed. And we are saying, you are going to get a $250 check immediately if you fall in the doughnut hole, which is a gap in payment coverage if you have Medicare prescription drugs. We are asking, we are hearing about preventative drug, or preventative care services that people want. And we are saying there are free preventative care services now that will be made available to those on Medicare and for people who are not on Medicare. Because over half of our members are in that age group, 50 to 64, as well. And there are a lot of benefits that accrue to them as well.

Ted Simons: Those two things you mentioned, the doughnut hole and the preventative care, the expansion of those what kind of time line are we looking at? Sooner? Later? When?

Ritch Steven: The doughnut hole, the $250 rebate that they will get if they fall in that gap in payment, that will happen this year, 2010. Next year, even in 2011 it will be even more significant. They will get a 50% reduction in brand-name prescription drugs and a 7% reduction in generic drugs, and then over the next seven years, those will gradually increase until basically they will be just paying the nominal co-pay that they now pay.

Ted Simons: What kind of impact are you seeing for those with chronic health conditions?

Ritch Steven: Well, this is one of the good things about the bill. In all the debate that occurred, this issue of chronic conditions and the vast costs that it incurs in people, the difficulty they have, for example, diabetes, that they may struggle with for 20 years, costs a lot, pushes people into medical bankruptcy, and makes it very difficult for them to get insurance in many cases. All of those issues are being addressed by making insurance more available, preventing insurance companies from being as discriminatory as they have been in the past. And making it far more affordable for millions and millions of people.

Ted Simons: I know there's also concern, especially among retired folks, regarding Medicare. There's been a lot of talk. Medicare is going to be cut, Medicare Advantage is not going to be the same as it used to be. Talk us to about that.

Ritch Steven: Medicare Advantage is a very curious thing. We have a very high number of our members here in this state who are on Medicare Advantage, about 40% versus the national average of about 25%. Medicare Advantage is run by private companies who provide traditional Medicare services and then a range of services above and beyond that amount. And they have always contended they can deliver us Medicare services, traditional Medicare services cheaper than Medicare can. About 6% cheaper. And yet they are being paid 14% more and most of that money that they are being paid more goes to their bottom line. So in the bill, all they are trying to do is say, look, over a period of five or six years, we are going to reduce that money back to exactly what we pay for traditional Medicare, dollar for dollar. What you as a business decide to do is up to you. You can offer anything you want to offer above and beyond traditional Medicare benefits, and we encourage all our members anyway to kind of look forward for a year and say, what plan do I think will be best for me? Because when you have Medicare, you are allowed to change your plans up to once a year with no penalty. And so if that plan is changing benefits that are important to you, look for some others. There are many companies out there that offer a wide array of benefits that people enjoy.

Ted Simons: The idea of long-term services, in-care services, again, changes here? Impact?

Ritch Steven: There are some very significant changes there for the first time. There is something called the Class Act, which people will hear about, and it is going to be a way that you can set money aside for a period of time and then if you are disabled after five years of contributing to this program, you can earn a minimum of $50 a day, which is really $18,000 a year, to pay for services for as long as you are disabled or need that money. And that is a very significant change in benefit structure for individuals. They are going to have to be a lot of new rules written about that. The program needs to be filled out. There's still a lot of questions. But it's a wonderful beginning to give people the ability to provide for themselves in their home, which is where they want to be, by being able to afford direct caregivers.

Ted Simons: And the idea behind this was to promote independent living. Correct?

Ritch Steven: Independent living. We hear 89% of our members tell us they want to stay in their home. They don't want to go to an institution. And we have to help provide some of the services and financial underpinnings which this bill does, to allow them to do that with dignity and autonomy.

Ted Simons: The time line for that particular aspect? I know it's a biggie. What do we know?

Ritch Steven: I believe that starts in the next couple of years. It's not instantaneous. It's going to require some insurance changes and it's going to require some other kinds of rule making to fill it out so I would think it's around 2014. I don't know that exactly.

Ted Simons: And a lot of things aren't known exactly by a lot of members, I am sure. Are you hearing misconceptions, things that are just flying through that you have no idea where they came from but you have to reassure members that's not going to happen? What's the biggest one you hear?

Ritch Steven: There's a lot of fear being used out there that they are going to lose their Medicare benefits, the programs are going to go broke, they are lying to you. Just general nonsense. None of those things are going to happen. This program is going to really improve the way health care is received throughout the country by virtually every age group. One of the things that AARP is doing is it's setting up a website. It's operational today. I checked it out just before I came down here. It's

Ted Simons: You are absolutely correct. We had it on the screen when you were giving it out and for anyone with questions, go there and they should get as many answers as they can.

Ritch Steven: We will be continuously updating it as more information on this very complex piece of legislation comes available.

Ted Simons: All right. Very good. I know it's confusing stuff. Thank you so much for clarifying some of it for us at least.

Ritch Steven: My pleasure, Ted. I would like to come back and keep you abreast of it as we go forward.

Ted Simons: Sounds good. Thank you so much.

Ritch Steven:Chair of the AARP Arizona Advocacy Network;

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