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Health reform for dependents & seniors

Marketplace Staff Mar 26, 2010

Health reform for dependents & seniors

Marketplace Staff Mar 26, 2010


Tess Vigeland: And let’s move now to all the 20-somethings who’ve been struggling to find a job with bennies in this recession. Lots of them hoped they could just stay on mom and dad’s health policies. But depending what state you live in, you could be kicked off before you even leave your teen years. It’s a situation that listener Anne Bier from Virginia, Minn., knows all too well.

Anne Bier: My husband and I are covered under federal employee’s health benefits plan. Our son, his 22nd birthday present was losing our health insurance. He’s now 24. He’s working, but has no health coverage. His friends are all the same age and several of them have the same problem. They aged out of their parents’ plan and have not gotten anything through their work. I’m concerned about the kids who have already been thrown off their parents’ policy. Can they go back on?

Vigeland: For details of how the health bill deals with this we turn to Vivian Ho. She’s the James A. Baker Institute Chair in Health Economics. And Vivian, I think this has been a very common birthday present.

VIVIAN Ho: Well, a very unpleasant one too. Under this new bill, parents will be able to cover their children, under their own health insurance policy, up until the age of 26. However, that will not be the case if that child actually qualifies for employer-provided health insurance at the job that they’re taking.

Vigeland: So in other words, if the parents have, perhaps, a better plan, the kid still has to go with what’s provided by the employer.

Ho: Yes, exactly.

Vigeland: Well, what if dependents have already been forced off, as in the case of Anne’s child, but they’re not yet 26. Can they go back on and when can that happen?

Ho: My understanding is that this change will happen. These kids will be able to go back onto those policies within about six months of when the law’s enacted, when it was actually signed.

Vigeland: OK. And again, if they have already been taken off, they can go back on.

Ho: Yes, they can.

Vigeland: Was this an issue that came into particular focus because of the recession and the lack of jobs for people in their twenties?

Ho: It certainly may have been the case that that was a focus, but this also may have actually happened even if we didn’t have the downturn, simply because, this is a group that even in good times tends not to purchase health insurance. And it was a concern, because when they would get into an accident or have an unfortunate illness develop, then there was this issue of how their health care was going to be paid for and often ends up getting paid for on sort of the public’s account, when they end up showing up at a county hospital.

Vigeland: Vivian Ho teaches health economics at Baylor and Rice Universities.


Tess Vigeland: We just reviewed how the new health care law helps the younger generation. Now, let’s turn to seniors and that not-so-tasty filling known as the Medicare donut hole. Joan Dulberg of Raleigh, N.C. is 54 years old and uses the Medicare Part D drug benefit. She recently fell into the hole.

Joan Dulberg: Last year, I think I was on about 14 or 15 different prescription medications, some of which were extremely expensive. And all of a sudden when I went to refill my prescriptions, they were full price.

What happened was that Dulberg had only been paying a fraction of the cost of her prescriptions. But then she hit the magic number: $2,800 in drug benefits. So suddenly, she had to pay full price.

Dulberg: It was pretty shocking. You don’t know you’re close to the donut hole or in it, until you’ve already gotten there. I got into the donut hole in mid-March, and I never made it out again. There was at least one medication that I just stopped taking altogether, because it was $500 a month.

She never got out of the donut hole, the lapse in coverage, because she didn’t hit the other magic number of $6,400 in prescription drug costs, when Medicare coverage kicks back in.

So, how does the new health care law fill in this out-of-pocket hole? For that we return to Vivian Ho. Vivian, what effect does the new law have on this donut hole?

Ho: Right away when the bill is signed, those Medicare beneficiaries who hit the donut hole will be able to receive a $250 rebate from the federal government.

Vigeland: And how much of a difference does $250 make within that hole? Is there still a hole, just not as big?

Ho: The donut hole is still quite big — $250 compared to that relatively large amount is quite a bit, in terms of, there’s still a very large gap that the beneficiary is responsible for.

Vigeland: All right. Well this is one of the pieces of the legislation where something else happens down the line, and this is a drug discount. What does that entail and when does that go into effect?

Ho: Starting in 2011, brand name drug companies are going to be required to give a 50 percent discount on the drugs that they sell to Medicare aid beneficiaries, who are in the donut hole. And there are going to be federal subsidies as well to assist individuals in being able to pay for these expenses. Further down the road, the federal government is aiming to reduce the co-pay and the donut hole. And so in the long run, it is not going to be a donut hole.

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