June 28, 2012, the Supreme Court decided to uphold the constitutionality of the polarizing Patient Protection and Affordable Care Act (PPACA), originally signed into law by President Barack Obama in 2010.

In the words of Ross Blair, founder president and CEO of Plan Prescriber, the court's ruling makes the PPACA, "the law of the land." According to Blair, the insurance industry is continuing to progress based on the assumption that the law will exist as it is written.

What does this mean for caregivers and their loved ones who depend on Medicare programs to help pay for medical care?

What seniors and their caregivers need to know

All told, the PPACA is 906 pages long and chock-full of the sort of verbiage that no one has the time (or perhaps, more accurately, the patience) to sift through.

Blair offers seniors and their caregivers a bare-bones translation on which parts of the PPACA are currently affecting Medicare and its elderly beneficiaries, and which parts may have a future impact on the program.

The elements of the PPACA which have already been implemented include:

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  1. Out-of-pocket limits for seniors with Medicare Advantage: Prior to the PPACA, there were no limits on the out-of-pocket expenses a senior with "Original Medicare" (Parts A and B), or a Medicare Advantage plan might have to pay for a given medical procedure. Ross says Original Medicare and most Medicare Advantage plans generally cover about 80 percent of the cost for any given operation. The beneficiary is then expected to foot the other 20 percent of the bill themselves. According to Ross, this used to mean that a senior could be on the hook for tens-of-thousands-of-dollars in out-of-pocket costs, depending on the procedure that was performed. However, recent health care reform has set a "maximum out of pocket" (MOOP) amount of $6,700 per year that beneficiaries with Medicare Advantage plans can be obligated to pay. Once a senior reaches this total, they don't have to pay any more money out-of-pocket for the rest of the contract year.
  2. Annual Enrollment Period (AEP) dates changed: The PPACA has also altered the dates for the period of time when seniors can investigate and alter their Medicare Part D and/Medicare Advantage plans. While the AEP used to begin in mid-November and carry on through the end of December, starting last year (2011), it will now go from October 15th until December 7th. Ross says that this change helps lessen the logistical problems that occur when beneficiaries wait until the last minute to switch their plans.
  3. 5-star rating program for Medicare Advantage plans: The Centers for Medicare and Medicaid Services (CMS) have devised a new rating system that Ross says is meant to help incentivize Medicare Advantage plans to provide better health care to seniors. Plans are rated based on several metrics, such as: their ability to help seniors stay healthy, how satisfied their customers are, and how well they manage the cost and disbursement of prescription medications. A four or five-star rated plan is eligible, under the PPACA, to receive bonuses from the CMS, with five-star plans also being allowed to enroll customers at any time throughout the year.
  4. Part B and D premiums bumps for wealthy: The PPACA has also outlined a monthly Medicare part B and D premium increase for single seniors who make more than $85,000 a year and couples who make more than $170,000 a year. According to CMS figures, the monthly premium for an individual senior in the $85,000 or less yearly income bracket would be $115.40, and could range up to as much as $369.00 for an individual in the $214,000 and above income bracket.
  5. Closing the donut hole: The Medicare prescription drug ‘donut hole' coverage gap—a contentious and costly issue for seniors—is set to be systematically shrunk over a period of several years, under the PPACA. Here's how the donut hole works: once an elder racks up $2,840 of prescription drug coverage costs, they fall into a coverage gap, which makes them responsible for all of their drug costs until they pay $4,550 out-of-pocket. This essentially re-qualifies them for Medicare coverage under a "catastrophic coverage" provision. Currently under the PPACA, seniors in the donut hole are able to get a 50 percent discount on their brand name drugs and a 14 percent discount on their generic prescriptions. By the year 2020, both of these discounts are scheduled to increase to 75 percent.
  6. Annual Wellness Visit and disease screenings: The PPACA also has a provision that allows elders to have a comprehensive yearly checkup, called an Annual Wellness Visit, as well as a series of cancer and disease screening tests, at no cost. Blair feels that more elderly need to take advantage of this aspect of the new legislation. "Many seniors fail to get that annual wellness visit," he says, "but, it's critically important for those that are 65 and over." The CMS website offers a complete list of what's covered under this provision.

The elements of the PPACA which have yet to go into effect include:

  1. Reimbursement for carriers of Medicare Advantage plans: In order to shift the emphasis away from fee-for-service programs and towards managed care plans, the structure of government payments to Medicare Advantage plans has been tweaked under the PPACA. Plans that receive high quality-of-care scores will receive bonuses. And, starting in 2014, plans must spend between 80 and 85 percent of the money they receive from insurance companies on improving health care quality or delivering health care services to beneficiaries. Plans that fail to meet this threshold will face financial penalties. Ross believes that placing an emphasis on managed care plans will be particularly beneficial to seniors because it is likely to increase the quality of care they receive.
  2. Program-wide cuts: According to Ross, some of the biggest wild-card elements of the PPACA are the proposed strategies to reduce costs. An emphasis on "accountable care," new pay structures based on performance in 5-star ratings, and numerous other structural changes to the Medicare program are supposed to add up to about $500 billion in savings to the system. But, if these savings don't materialize, the law calls for the new Independent Payment Advisory Board (IPAB) to recommend cuts. As a result, Ross says a number of separate companies are likely to merge, as smaller firms are acquired by larger firms, or get out of the business altogether. For example, on July 9, 2012 WellPoint (one of the nation's largest insurance companies) acquired Amerigroup Corp., a Medicaid provider based in Virginia. ‘This will probably be a good thing for seniors, it will make choosing a provider a less daunting task," he says. But, no one yet knows how cuts could affect the benefits offered and premiums charged. Things in the insurance industry haven't changed too much yet, and Ross points to the year 2014 (when the most changes go into effect) as the pivotal year for health reform. Though he adds that Medicare plans – particularly the prescription drug benefits - changing every year, so it's advisable for seniors to consistently conduct a yearly review of their Medicare Advantage plans and Medicare Part D plans.

A certain future, with an uncertain impact

Though future of the PPACA may appear to be fully written, both sides of the aisle are digging out their red pens in preparation for what appears to be a drawn-out process of argumentation and revision of the PPACA.

The House of Representatives voted to repeal the Affordable Care Act. This has been largely regarded as a purely political move because, even if the House passes the bill, it is not expected to survive the gauntlet it will face in the Democrat-controlled Senate. Even if the bill does make it through the Senate, the White House has issued a statement saying that it would be vetoed.

Ross remains confident that many of the components of the plan that affect seniors will stay intact, no matter which party's candidate resides in the White House.