Posts Tagged "Medigap"

Tis the Season to Shop for Medicare Options

Americans are fighting back against soaring food prices by shopping at discount grocers, buying lower-cost store brands, or giving up their favorite gourmet items.

Yet Medicare beneficiaries usually don’t shop around for a less expensive insurance policy or a higher quality one. It’s also advisable for retirees to review their current plans to make sure they still include the right doctors or prescription drugs for treating any new medical conditions. Open enrollment for Medicare Advantage and Part D plans started Oct. 15 and ends Dec. 7.

Over their lifetimes, retirees will spend an average $67,000 out-of-pocket for medical care – and that does not include the monthly premiums. The least healthy retirees will pay twice that much.

Yet only three in 10 people surveyed in 2019 by the Kaiser Family Foundation said they compared their existing Medicare insurance policies with the new policies that came on the market during open enrollment for 2020. Three groups who would probably benefit most had the lowest rates of shopping around: low-income and minority retirees and people over 85.

Given retirees’ reluctance to comparison shop, it should not be a surprise that the vast majority stay put and don’t change their policies. The share of people who do change a plan bounces around from year to year but not by much, Kaiser found. …Learn More

Good Riddance Medicare Donut Hole!

Medicare’s donut hole is the bane of existence for retirees with expensive medications.

They will get substantial relief in 2025, when the Inflation Reduction Act, signed by President Biden last week, will cap all retirees’ annual drug copayments at $2,000. Monthly drug plan premiums are not included in this cap.

The cap will effectively eliminate the donut hole that currently requires retirees to pay 25 percent of the cost of their prescription drugs until they reach a threshold amount. The threshold increases every year and hit $7,050 this year.

A relatively small group of about 1.5 million retirees pay more than $2,000 for their prescriptions. But many of them are spending $5,000, $10,000 or more.

“It’s going to be an amazing thing” if the cap is implemented as Congress intended, said Ashlee Zareczny, compliance supervisor for Elite Insurance Partners, a Medicare health insurance broker outside Tampa.

Some of her firm’s retired clients pay so much for their medications that they have to make difficult choices between medications and food or other essential items. People who rely on Social Security “shouldn’t have to make those choices,” Zareczny said.

The cap will apply to all Medicare beneficiaries, whether they get their prescription drug coverage through a Part D plan or Medicare Advantage insurance plan, she said.

Under the current system, insurers that sell Medicare drug plans have a $480 maximum they are permitted to charge for the deductible. After meeting the deductible, retirees make their predetermined copayments under the insurance plan. They enter the donut hole after they spend $4,430 out of pocket, and then they are required to pay 25 percent of the cost of their drugs until they reach a threshold that pushes them into the catastrophic phase of Medicare’s drug coverage.

Once the catastrophic coverage kicks in, however, they are still responsible for 5 percent of the remaining drug costs. In 2024 – a year before the $2,000 cap goes into effect – the new healthcare law will eliminate the 5 percent copay.

The cap on total spending will protect any retiree who develops a medical condition requiring them to take very expensive medications. Currently, there is no limit on how much they may have to spend.

And, Zaraczny said, “They’re not prepared to put forth this money.” …Learn More

Get Help with Medicare Coverage Denials

The United States has a notoriously complex healthcare system, and Medicare is no different.

In the early months of the pandemic, the Medicare Rights Center received a large number of calls to its telephone help line from people over 65 who had suddenly been laid off and lost their employer coverage. Even when there isn’t a crisis, the center’s staff and volunteers answer all manner of questions about Medicare enrollment rules, insurance options, and what to do when an insurance company denies them coverage.

Sarah Murdoch is the center’s director of client services and oversees the helpline. She spoke with Squared Away about the common issues retirees face and how they can address them.

Question: Your helpline fielded 42,000 questions about Medicare in 2020 and 2021. How does that compare to past years?

It’s in that ballpark year to year – around 20,000 questions. But we saw, within that 42,000, a shift in the actual trends.

Throughout the pandemic, particularly in 2020 when there were lockdowns and people were getting laid off left and right, we got a lot of calls from people who unexpectedly had no income. We heard from people who had insurance through their job and that was not an option anymore. Or they were already on Medicare and were trying to figure out how to pay their costs, or they were laid off and had to figure out how to get into Medicare. That has eased up but was a big thing we saw in the beginning of the pandemic.

We also had questions related to benefits for low-income people. We told people who suddenly had zero income about the income requirements for the Medicare Savings Program, Medicaid, and the state pharmaceutical assistance programs – anything that can lessen the hardship.

In 2020 and 2021, nearly a third of the complaints on your helpline were about service denials by insurers that provide Medicare Advantage or Part D drug plans. Start with Advantage plan denials – are they a big issue for retirees?

The Medicare Advantage plans often have doctor and hospital networks, whereas original Medicare doesn’t have networks. People may be denied coverage by an Advantage plan if they have an out-of-network provider. It could also be a denial of a medical service or a prescription medication. We do see it more but it’s hard to tease that out from the fact that more people are just enrolled in Medicare Advantage.

Do Medigap supplements to Medicare have similar issues with denial of coverage?

Medigap is different – the plans are never making their own claim determinations. If something is approved by original Medicare, then Medigap is going to pay for it as long as the retiree has a Medigap plan that has that type of coverage. In the Medicare Advantage policies, however, insurers are making the claims determination. All of the insurance companies have their own claims adjusters making those decisions – as opposed to contractors who process claims for the Medigap plans on behalf of the Centers for Medicare and Medicaid Services. The Medigap insurer isn’t making any decisions as to whether something is covered or not – it has already happened at the government level. …Learn More

Using Home Equity Improves Retiree Health

Retirees spend $1,500 more per year, on average, for medical care after a diagnosis of a serious condition like lung disease or diabetes.

Often, the solution for individuals who can’t afford such big bills is to scrimp on care or avoid the doctor altogether. But older homeowners can get access to extra cash if they withdraw some of the home equity they’ve built up over the years.

While the money clearly provides financial relief for retirees, a new study out of Ohio State University finds that it is also good for their health. Every $10,000 that Medicare beneficiaries extracted from their homes greatly improved their success in controlling a chronic or serious disease.

Among the retirees who had hypertension or heart disease, for example, one standard used to determine whether the condition was under control was whether blood pressure levels stayed below 140/90, which the medical profession deems an acceptable level. The people who tapped their home equity were more likely to stay below these levels than those who did not.

This is one of several studies in recent years to tie financial security to home equity, a resource many retirees are reluctant to tap. A study in 2020 found that older homeowners were less likely to skip medications due to cost after they had extracted equity through a refinancing, home equity loan, or reverse mortgage.

But this new research is the first attempt to connect the strategy to retirees’ actual health. The analysis followed the health of more than 4,000 homeowners for up to 15 years after they were diagnosed with one of four conditions – lung disease, diabetes, heart conditions, or cancer. …Learn More

Medicare’s Tricky if You’re Employed

Medicare optionsI’m employed (obviously), turning 65 in June, and writing this blog to answer a question that is nagging at me and probably many of our readers in the same situation: do I have to sign up for Medicare, and if so which parts?

No one is actually required to sign up for Medicare. But everyone will need the health insurance eventually and failing to follow the rules can subject retirees to a lifetime of higher premiums.

And that surcharge can be substantial. Medicare adds 10 percent onto the Part B premium for every year a 65-year-old worker who should’ve, under the rules, signed up for the coverage for doctors and medical services but did not. Late enrollment in Part D drug coverage also triggers a penalty. More on the penalties later.

Part A is easy. Go ahead and sign up for Medicare’s Part A hospital coverage if you have employer health insurance, says Richard Chan, chief executive of CoverRight, an insurance broker with a consumer-friendly website. The federal Centers for Medicare and Medicaid Services agrees.

Part A won’t incur a late penalty if you paid your Medicare taxes for 10 years while working, because, in that case, Medicare does not charge a monthly premium – and Part A is added financial protection. “It’s free, and if you go to the hospital, Medicare can help cover the gaps that your work insurance doesn’t,” Chan said.

Eligibility for Part A begins three months before the 65th birthday. A couple of important caveats. People who didn’t put in 10 years of work will pay a fairly large Part A premium. And, under federal tax law, people who sign up for Part A are not allowed to contribute to a Health Savings Account, or HSA, which the government views as a health plan.

Part B is trickier. Older workers who have health insurance from a large employer – 20 or more employees – do not have to sign up for Part B until they retire and give up their employer’s coverage.

However, it’s good practice to confirm with the benefits office that the coverage does, in fact, meet Medicare’s requirement that the employer has at least 20 workers because employers with fewer than 20 employees are subject to completely different rules. And it’s not always clear cut whether the threshold has been met if, for example, the company has contractors or part-time employees.

When you eventually do sign up, you’ll need documentation, which is provided by your employer, to prove to Medicare that you were eligible to defer Part B without penalties. …Learn More

Minority Retirees: More Healthcare Access

The pandemic has dramatized the grim consequences of Black and Latino Americans having less access to healthcare than whites: disproportionately high death rates from COVID-19.

Medicare Advantage figureBut there has been some progress toward racial equity in an unlikely place: Medicare Advantage plans sold by insurance companies. Enrollment in the plans has increased unabated for years, and minority enrollment more than doubled between 2013 and 2019.

During that time, Advantage plans increased from about a third of the various Medicare options purchased by Black, Latino, Asian and other minority retirees to nearly half, according to the non-profit Better Medicare Alliance.

Dr. Elena Rios, president of the National Hispanic Medical Association, and Martin Hamlette, executive director of the National Medical Association representing Black physicians, said Advantage plans provide retirees with access to preventive services like mammograms and cholesterol checks that keep them healthy.

Advantage plans are “a needed tool in the work of building a more just health care system,” they wrote in a recent Health Affairs article.

The appeal is upfront affordability. The monthly premiums are significantly lower than Medigap premiums, and many Advantage plans charge no premium. They frequently include prescription drug coverage, eliminating the need to pay for a separate Part D drug plan.

The reason Advantage plans are especially popular with minorities is that they tend to have lower incomes than whites and less room in their monthly budgets for medical care. Three out of four minority retirees in Advantage plans have incomes below 200 percent of the federal poverty level, compared with half of the whites in the plans.

Like all insurance, however, Advantage policies are a mixed bag. Medicare beneficiaries in poor health may face higher costs down the road if they experience a major medical crisis. In one study, the sickest retirees with Advantage plans had more risk of inordinately large annual out-of-pocket expenses for copayments and deductibles than retirees with Medigap plans. …Learn More

Open enrollment

Need Help Choosing Your Medicare Options?

This blog is for the procrastinators. The last day of Medicare open enrollment for people who want to switch their Medicare Advantage or Part D insurance plans is Dec. 7.

The hoopla around this open enrollment period can be confusing, because Medigap supplemental plans are on a different schedule. The optimal time to buy a Medigap plan is during a six-month window after your 65th birthday, which is the only time insurers are required under federal law to sell you a Medigap policy. Switching to a different Medigap plan during the current open enrollment is trickier, because you can be denied coverage, though several states have made it easier to enroll or switch from Medigap or Advantage to a new Medigap plan.

Retirees with Advantage or Part D plans can freely change plans during open enrollment but are usually reluctant to shop around. But insurance experts warn that the terms of existing policies can change, and this is the time to see if there’s a better deal out there. The Kaiser Family Foundation said retirees have a record number of Advantage plans to choose from for 2022 – double the number available five years ago. But this can be a double-edged sword if choices sew confusion.

If you haven’t plunged into researching your Advantage or Part D options, the resources listed below can help.

Free counselors. Every state has a counseling program to explain the Medicare options. The counselors are free, and this website lists every state with a link to that state’s contact information. Although volunteer counselors may not be as knowledgeable as insurance brokers who sell the policies, many volunteers are former health care professionals or are themselves enrolled in Medicare and know the system. …Learn More