Texas Medicare supplements have changed some in the short time since PPACA was signed into law. The Patient Protection and Affordable Care Act (PPACA), not-so-lovingly called Obama-care, became law in Sept. 2010. Even as states still try to challenge the act, changes continue to take place. But, how does all of this affect Medicare Supplements?

Medicare in General

It’s been kind of hard to distinguish between the overall problems with Medicare and changes associated with PPACA. Many of the shortages in Medicare and the Medicare Supplemental insurance have been credited to PPACA, when the problem actually lies with other fiscal concerns.

By the same token, problems with Medicare that were supposed to be fixed by PPACA are still there, leaving many to wonder when the promised improvements are going to begin.

Medicare Supplement

The Medicare Supplement, or as it’s officially known, Medicare Advantage (MA) is scheduled to be decreased by nearly $135 billion over the next 10 years, starting this year (2011). That’s the Medicare Supplement that will see the decrease – not Medicare Parts A and B. Part D of Medicare – the prescription drug plan – is supposed to see an increase of $29 billion over the same time period. This is an attempt to phase out the gap in coverage between Parts A and B and the prescription plan, part D.

So, yes, the payouts on the Medicare Supplement or MA, will decrease steadily because of PPACA.

In 2011, the scheduled payment limits on MA were kept at the 2010 level. These levels were set by MA plan bids and overall risk scores of MA participants. 100% of the levels were set by these traditional factors. In 2012, the levels will be set using 50% the traditional standards and 50% the PPACA standards. In 2013, the levels will be set 100% by the PPACA standards, completely phasing out the traditional standards.

Benchmarks

The benchmarks that determine the levels being set are a combination of the cost of medical care times the percentage of payouts in your county. The cost of medical care used to be the sole criteria, and the percentage of payouts in your county are the PPACA criteria.

Phase Out

The long and the short of it is, PPACA is designed to phase out Medicare Advantage. All states, including Texas Medicare supplements will be phased out in a few years. The replacement is supposed to be improvement in the Part D, or prescription coverage.

County Quartiles

Texas Medicare supplements as well as those paid out in other states will be on the county quartile basis. If you live in a rural or suburban area, your county quartile will receive 115% of the Medicare monies paid out. If you live in an urban area, your county quartile will receive 95% of what it usually receives. Currently, only 34% of Medicare Advantage participants live in the rural and suburban areas. This means that the increases are going to the fewer people, a move about which some people have attempted to question the Obama administration.,