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Indiana Medicare Supplement

The Indiana Medicare Supplement, available through Chambers Roper, is on its way out, due to the health care reform bill that was passed in 2010. The Obama administration’s goal is to render the Indiana Medicare Supplement obsolete through “beefing up” prescription drug coverage to eliminate the gap in coverage.

The gap, otherwise known as the “donut hole,” leave Medicare recipients without help in covering their medical prescriptions once they reach a certain level of expenditure. Then, once another milestone in expenses is reached, Medicare resumes copayment for prescriptions. Medicare Advantage, or the supplement, as some people call it, was instituted to help people make it through the gap. Indiana Medicare Supplement is an additional insurance policy that Medicare recipients can purchase to help cover costs while they are in the “gap,” about 1/3 of people on Medicare carry the Medicare Supplement.

The millions of Americans currently enrolled in the supplemental plan have faced increasing cuts in the services rendered through their plan. Indiana Medicare Supplement has also seen the expected decrease in enrollment, since the program is being phased out. One of the ways healthcare reform cut payments being made to Indiana Medicare Supplement is by fixing maximum rates to fee-for-services rates in a given county. In addition, the payments on fee-for-service rates have been reduced to medical providers.

The first cut came in 2011, when the payment rates were frozen at the 2010 level. In 2012, the formula for repayment was changed – a bigger difference in the payment rate than the first change. Payments are made according to benchmarks allowed on a per-county assessment, set by actuaries with the Medicare program. Each county is ranked according to the percentage they will be reimbursed for medical care. Most rural and suburban counties will receive about 115% reimbursement for medical care, while urban counties will receive 95% reimbursement. This means that even more of the urban population will receive even less of a reimbursement. Doctors and medical professionals who service urban areas will not receive full reimbursement for their services, while those who service rural and suburban areas will receive more than they spent on medical care.

In addition, vendors who sell the Indiana Medicare Supplement will gravitate toward the counties that get higher reimbursement rates. The reimbursement rates will be in full effect by 2017.

The average impact of these changes in reimbursement rates means that enrollees in Indiana Medicare Supplement, and those who would have enrolled in it if it had not been changed, will be out about $3,700 per year for their medical care, beyond what they are paying now. This is about 27% of the amount that would be allowed under the original law. By 2017, the combined cuts will come to about $55 billion annually.

Indiana Medicare Supplement is still provided to members who have the program, but it will become increasingly less worthwhile. Medicare recipients can, at any time, choose to switch to the new form of Medicare Part D that does not include the Indiana Medicare Supplement.

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