Changes in Medicare provide pros and cons for patients

Anna Wilde Mathews and Jane Zhang / Wall Street Journal

The major goal of the new Medicare law just passed was to block a scheduled cut in fees paid to doctors. But there's also plenty in the law that directly affects Medicare beneficiaries.

Participants in the federal insurance program for older and disabled Americans will have lower out-of-pocket costs for mental-health services. Some widely used anti-anxiety and sleep drugs that Medicare previously didn't pay for will be covered. And the law aims to boost preventive health care, including making it easier and cheaper for new Medicare participants to get a physical checkup. Most of the new benefits will be phased in over several years.

There also are cutbacks. Consumers who relied on certain private insurance plans sold under the name Medicare Advantage could face tougher restrictions on which doctors they will be allowed to see. Another change: Doctors will be strongly encouraged to begin sending prescriptions to pharmacies electronically, rather than writing them by hand.

"There are some important changes in here," says Kirsten Sloan, an official with AARP, the lobbying group for older people. "It's meaningful."

Congress approved the Medicare law earlier this month after months of wrangling. With votes of 70 to 26 in the Senate, and 383 to 41 in the House, the bill garnered enough votes to override a veto by President Bush, whose opposition centered on some of the cutbacks to the Medicare Advantage program. The Medicare bill has a total cost estimated at around $20 billion, spread over five years.

Medicare participants getting mental-health treatment, such as visits to a psychiatrist, currently must pay 50 percent of the cost out-of-pocket. That compares with a co-payment of 20 percent for other doctor visits. The new law cuts the co-pay for mental-health services also to 20 percent, although the reduction phases in gradually, ending in 2014.

That change could make a big difference for Medicare beneficiaries like Karen Geer, who lives near Indianapolis. Geer, 46, spends more than $4,000 a year on therapy for her bipolar disorder, mostly on visits with a social worker that cost $80 a session. She says the therapy has helped her manage the disorder well, and she now does volunteer work in the community. But to help pay for it, Geer says she has given up getting Pap smears and other medical care.

Geer figures she'll save at least $2,500 a year if her Medicare co-payments are reduced to 20 percent from 50 percent. "I think it will make a difference," she says. "I'll have more money to use on other services I need."

Some Medicare beneficiaries have not sought needed mental-health treatment because of the high out-of-pocket cost, says Dale Klatzker, president of The Providence Center, a community mental-health clinic in Providence, R.I. The clinic, which relies heavily on public funding, sometimes can't collect the 50 percent co-payments from Medicare patients when they can't afford it, he says. He expects the new Medicare law to boost patient visits and their ability to pay.

The American Psychiatric Association, a professional group, says the increase in coverage should attract more psychiatrists and other mental-health-care providers into Medicare. "It's a huge step forward," said Andrew Sperling, director of federal legislative advocacy for the National Alliance on Mental Illness, a patient advocacy group.