Medicare

Behavior

Enrollment Trends in Medicare Options

Most retirees manage to get by on less than they earned as workers. Yet they devote a much larger percentage of their income to medical care than working people.

To limit their annual spending on care, retirees usually buy some type of insurance policy to help pay the bills Medicare does not cover. But a big shift is under way: the Medigap and employer plans that once dominated are now in decline. Only about a third of retirees have one of these two supplementary arrangements, down from two-thirds in 2002.

Retirees are instead swarming into Medicare Advantage plans  – HMOs run by insurance companies – which doubled enrollment in the past decade to become the most popular form of coverage. A small minority of retirees go without any policy at all, so the only premium they pay is for Medicare Part B’s physician coverage. (The Part A hospital coverage has no premium.) At the same time, the vast majority of retirees today enjoy prescription drug coverage, either through a stand-alone Part D plan or as part of an employer or Advantage plan.

Helen Levy at the University of Michigan digs into what the market changes mean for retirees’ bottom line in recent research funded by the U.S. Social Security Administration.

With fewer employers offering retiree health insurance, new Medicare beneficiaries focus on the tradeoffs between Medigap and Advantage policies. A big reason the Advantage plans have taken off is lower premiums, which are, on average, substantially below the premiums on Medigap plans. Advantage plans’ other appeal is that they frequently cover extra services like dentists and eyeglasses.

Both Advantage and Medigap plans can still leave beneficiaries with high out-of-pocket spending. The federal limit on Advantage plans’ deductibles and copays increased this year to $7,550 per year, though insurers are permitted to reduce this cap. Many Medigap plans do not have out-of-pocket maximums at all. However, these plans tend to give more protection from large medical bills overall.

Just as important to retirees as paying the bills is the risk of being socked with inordinately high spending on hospital and physician care in a bad year. Levy defines this unpredictability as retirees having to shell out more than 10 percent of income out of their pockets, excluding all premiums.

Under this standard, about 23 percent of the retirees in the study with Advantage plans spent more than 10 percent of their income for care – versus 17 percent of Medigap buyers.  About 28 percent of those without any coverage outside of Medicare exceeded the 10-percent threshold. …Learn More

Behavior

Retirees say ‘Ugh’ to Medicare Shopping

medicare chartIn terms of popularity, reviewing Medicare plans during the open enrollment, going on now, ranks right up there with doing taxes.

Retirees on Medicare view healthcare as their most burdensome expense.  But they are less likely to comparison shop for Medicare plans than for their groceries and gas, even though plan shopping would probably save more money.

Deciding on a Medicare Advantage plan or deciding to switch to traditional Medicare, with or without a Medigap supplement, is “overwhelming, scary, and has consequences, so we put it off,” said Bart Astor, a spokesman for the insurer WellCare Health Plans, whose nationally representative survey quantified just how much retirees dread Medicare enrollment.

Selecting one path over another also necessitates predicting the impossible: their future health and how much coverage they will need.

Squared Away can’t predict your medical needs in 2018 either.  But perhaps one of these blogs will help you decide which path to take:

  • Free help navigating Medicare’s maze
  • 10 rules for Medicare Advantage shopping
  • Know the pitfalls of spotty hospital coverage in Advantage plans
  • Advantage premiums reflect physician networks
  • Fewer, clearer Medicare Part D choices
  • Avoid initial Medicare enrollment mistakes
  • Medicare primer: Advantage or Medigap?

If you haven’t shopped yet, why not get started on Black Friday?Learn More

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Field Work

Medicare Advantage Shopping: 10 Rules

Janet Mills is a veteran in the Medicare Advantage marketplace.

At Florida’s SHINE program for 13 years, Mills has provided unbiased counseling to thousands of seniors trying to make difficult choices about their Medicare coverage.  Now an area coordinator, she also fields questions from volunteer counselors at SHINE – the Serving the Health Insurance Needs of Elders program – in Pinellas and Pasco counties, which include St. Petersburg and Clearwater.

It can be difficult for retirees with multiple Medicare Advantage options to distinguish one plan’s benefits from another plan’s and pull the right one off the shelf. But based on her experience, Mills said, the decision retirees make during open enrollment for Medicare Advantage plans is crucial to controlling their health care costs. One in three Medicare beneficiaries is now enrolled in an Advantage plan, according to the Henry J. Kaiser Family Foundation. Their growing appeal centers on premiums that are lower than Medigap premiums.  But retirees in Advantage plans also face the potential for up to $6,700 in out-of-pocket costs annually, the legal maximum allowed in the plans.  The out-of-pocket U.S. average is $5,219, according to Kaiser.

“You really don’t want to sleep through the annual enrollment period,” Mills said.

Here are her pearls of wisdom for those preparing to launch into their comparison shopping for Medicare Advantage plans, which go on sale Oct. 15: …
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Prescription pills

Money Culture

Fewer, Clearer Medicare Part D Choices

medicare part d chartA decade ago, the nation’s Medicare enrollees had more than 1,800 different prescription drug plans to choose from. In the 2017 open enrollment that started on Oct. 15, that number dropped to just 746.

News of higher Part D drug plan premiums and out-of-pocket costs in 2017, estimated in a new report by the Henry J. Kaiser Family Foundation, will not be welcome by the nation’s older population.  But Squared Away also wanted to know whether fewer plan options are good or bad for consumers.

“It’s good in the sense [federal] efforts are bearing fruit in giving people options that are more distinct from each other than in the past,” said Juliette Cubanski, Kaiser’s associate director of Medicare policy. At the same, she said, retirees “still have a lot of choice in this marketplace.”

The number of plans has shrunk steadily for a variety of reasons since the 2006 inception of the prescription component of Medicare, known as Part D. In the early years of the program, plans started disappearing amid consolidation among insurers and pharmacy benefits managers, she said. More recently, a few Part D plan providers have pulled out of the market.

But Cubanski said recent reductions in the number of plans were primarily by federal design. In 2011, the Centers for Medicare and Medicaid (CMS) stepped in and began requiring insurers that offered more than one Part D plan in a region to make sure the differences among their plans were clear and distinct to Medicare beneficiaries. …Learn More

On the Web

Medicare Enrollment Help is Plentiful

Medicare posterOpen enrollment starts Oct. 15 for people who’ve signed up for Medicare and must buy into or change their supplemental Advantage or Part D prescription drug plans.

The Medicare Rights Center in New York tells me that you can “make as many changes as you need during this period” and that “only your last coverage choice will take effect Jan. 1.”

A long list of resources appears at the end of this blog to help Medicare beneficiaries through the enrollment process. But there’s a lot of hoopla around the Oct. 15-Dec. 7 enrollment period, so it’s important to know what Oct. 15 is not about.

One’s birthday – and not a date on the calendar – determines when people should initially enroll in the Medicare program. Most people turning 65 who are not covered by their own or their spouse’s employer health insurance at work are required to enroll in Medicare Parts A and B during a seven-month period that starts three months prior to their 65th birthday. During this seven-month window, new Medicare participants must also sign up for their Part D drug plans – or risk paying a lifelong penalty. Oct. 15 is not the trigger date for selecting Medigap plans either.

Here’s what the Medicare open enrollment that starts Oct. 15 is about: figuring out the right Advantage or Part D drug plan to buy or switch to. This is a complex process that involves multiple choices, anticipating your future health care needs and expenses, and a lot of research into the plans available.

It’s an implicit recognition of Medicare’s complexity that so many resources are available to help with this process, from private and government-funded consultants to YouTube videos and detailed web pages on the Medicare website. The following resources and blogs can help answer your questions: …Learn More

Logos

Field Work

Free Help Navigating the Medicare Maze

Table: the FactsHICAP, SHIP, SHINE – whatever your state calls the program, the mission is an urgent one.

With some 10,000 baby boomers turning 65 every day, these programs help new enrollees grapple with their Medicare options and make decisions, especially during open enrollment, which begins on Thursday and ends Dec. 7.

Medicare is “confusing” to boomers, because they “have more than one option, and most of us, when we were working, had only the PPO or the HMO” to choose between, said Christina Dimas-Kahn, program manager and a telephone counselor in San Mateo County, California’s Health Insurance Counseling and Advocacy Program (HICAP).

The top requests for assistance coming into her office are from new enrollees to Medicare, followed by the elderly who can’t afford their medications, messy billing problems between Medicare and health providers, and questions about long-term care and how to pay for it, she said.

The primary goal is “education and empowering you to enroll yourself,” said Joshua Hodges, who oversees the programs for the U.S. Administration for Community Living (ACL), which funds them. Their “beneficiary focus” has become even more crucial, he said, since the advent of Advantage managed-care plans, which complicate the choices faced by Medicare beneficiaries.

Click here for a state-by-state directory of State Health Insurance Assistance Programs (or SHIPs) – their official name. SHIPs are also available to residents of Puerto Rico, Guam, the Virgin Islands, and Washington DC. …Learn More

Field Work

Medicare Hotline Complaints Detailed

Last month, Squared Away published a primer for new Medicare enrollees choosing between their two available options: an Advantage plan or traditional Medicare plus a Part D drug plan and/or supplemental Medigap policy.

Millions of beneficiaries receive their Medicare benefits without any major problems. But Medicare rights center logotoday’s blog is about a report detailing complaints to the national telephone hotline operated by the Medicare Rights Center, a non-profit patient advocacy organization.  Two of the top issues reported by seniors were denials of coverage and rocky transitions from employer or other health insurance into Medicare.

Here are some of the findings:

  • 60 percent of calls about Advantage plans involved denials of coverage for physician care, home care, therapy, medical equipment, tests and other services. Some calls about coverage denials also involved traditional Medicare. However, in contrast to private Advantage plans, Schwarz said that private Medigap plans must follow Medicare’s lead in determining what’s covered.  “If Medicare pays, then Medigap pays,” she said.
  • The majority of denials of drug coverage involved medications not on the list approved by the senior’s drug plan.This primarily affects either seniors starting new medications or new plan enrollees who learn that their plan doesn’t cover all their medications.  Advantage and Part D drug plans are not permitted to deny coverage in the middle of a plan year if they’ve been covering a drug for a specific medical condition, unless the drug is removed for a specific reason, such as the appearance of a new generic.  They can, however, remove the drug from the list when the senior’s annual policy expires, Schwarz said. …

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Field Work

Medicare Primer: Advantage or Medigap?

Traditional Medicare with a Medigap plan or Medicare Advantage? My Aunt Carol in Orlando wrestled with this decision for some five hours in sessions with her Medicare adviser, which she followed up with multiple phone calls – and a raft of additional questions.

“You have to ask these questions. You really have to think about it,” she said. “It’s confusing.”

Essentially every 65-year-old American enrolls in Medicare, and many get additional coverage. One form of additional coverage is through supplements to traditional Medicare, which include a Part D prescription drug plan and/or a Medigap private insurance plan to cover some or all of Medicare’s co-payments, deductibles, and other out-of-pocket costs. The other is through Medicare Advantage, a managed care option that typically provides prescription drug coverage and other services not included in the basic Medicare program.

So which to choose? Consumer choices have proliferated since private plans were added to Medicare 40 years ago. The typical beneficiary today has about 18 Medicare Advantage options, a multitude of Medigap plans for people who choose the traditional route, and 31 prescription drug programs, according to the Kaiser Family Foundation.

This primer is for new enrollees like my aunt. A future blog will provide suggestions from leading Medicare experts about ways to think about this important decision and the financial issues at stake.

The following compares the primary advantages and disadvantages of traditional Medicare and Medicare Advantage plans. But everyone is unique, and it’s impossible to simplify a process that requires each individual to research his or her best options, based on the severity of their health issues, their preferences and financial situation, and the policies available in their state’s insurance market. …Learn More