Will You Be One of Medicare's Winners?

Seniors are the biggest consumers of the country’s health care system in terms of dollar amount and volume. They generally take more prescription drugs, visit the doctor more often and stay in the hospital more frequently than the average patient. So they would be most impacted by any overhaul of the health-care system.

They’re also the group that’s reported feeling most “confused” by the debate over reform.

Overall, 62% of people over 65 say they’re confused about health-care plans being considered by Congress compared with 43% of those under age 65, according to an August poll by Kaiser Family Foundation, a health policy nonprofit research group. And less than a quarter of seniors polled believe reform would benefit them or their families compared with 39% of those under 65.

Much of the unease stems from potential changes to Medicare, a program used by about 15% of the population that accounts for 22% of total personal health-care spending.

More debate over the legislation is expected once Congress returns from its summer recess after Labor Day. President Obama is expected to lay out a more specific blueprint for what he wants out of the plan as early as next week.

In the meantime, here’s a look at how the current proposals would change health care for older Americans.

Premiums for drugs could rise as much as 20% over the next decade, according to a letter released last week by the Congressional Budget Office (CBO) addressing potential reform tweaks to Medicare Part D, the program that subsidizes prescription drug costs. Despite a rise in premiums, overall spending on prescription drugs would fall, on average, the CBO says.

The House bill would effectively increase premium costs because it is designed to end an existing gap in Medicare drug coverage known as the "doughnut hole." Currently, about a quarter of Medicare patients with prescription drug coverage fall into this hole. Once the cost of a patient’s prescriptions exceeds about $2,700 (for 2009), they have to cover the next $4,350 on their own (once beneficiaries hit $4,350 in out-of-pocket costs, catastrophic coverage kicks in and they pay only a nominal amount per prescription). The House bill would gradually narrow that gap until it would be eliminated in 2022. And before then, beneficiaries in the doughnut hole would get a 50% discount on certain brand-name drugs.

Eliminating the doughnut hole would reduce out-of-pocket costs of most Part D beneficiaries, says Tricia Neuman, the director of the Medicare Policy Project at the Kaiser Family Foundation. However, the effect on a patient’s total spending would vary based on their care.

Though they may be in the minority, some seniors have minimal drug needs and never reach the doughnut hole. They’ll likely lose out under the legislation and end up paying more in additional premiums than they would gain from lower cost sharing.