Medicare and More

Sorry I haven’t written all week, but I’ve been very busy talking to seniors about their Medicare Advantage plans and their Medicare options.  With big changes to certain plans, people are confused and unsure about what they should do.  Should they stay put?  Should they change plans? Should they go back to Medicare and get a Medicare Supplement?

Here are some examples of people I’ve met with this week.

I met with several veterans who use the VA for their medications and even some of their health care, but they are also enrolled in Medicare Advantage plans.  All of them had forgotten how to use their Medicare Advantage plan, and in some cases they would have saved money if they had used their Advantage plan rather than the VA.  The VA has deductibles and co-pays for services which, in some cases, are higher than what they would have paid using their Medicare Advantage plan.

Several seniors had run into problems with their Advantage plans because they went out of network for lab services, or showed their Medicare card when they went to the emergency room.  They ran into lots of hassles trying to get their plan to pay the bills because of their mistakes.

One plan’s application form says, “I will read the Evidence of Coverage from ____ when I get it to know which rules I must follow in order to get coverage with this Medicare Advantage Plan”.  The Evidence of Coverage is over 100 pages of details about what is covered and rules that must be followed in order to get medical bills paid.  This book arrives after a person has enrolled in a Medicare Advantage plan.  I ask people, “Do you promise to read the Evidence of Coverage?”

I met a woman who had just quit her job to take care of her elderly parents, and she seemed very, very stressed.  I don’t know if she can afford to go without a paycheck, but both her parents are frail and need a lot of attention.  This woman asked me if Medicare pays for respite care for a caregiver like herself.  I had to tell her that I have never heard of that as a Medicare-covered service.  This woman, in her fifties, seemed overwhelmed by the responsibility of taking care of her parents and figuring out their medical bills, their prescriptions, and what might lay ahead in the coming months. 

So I’ve been very, very busy this week, and I’ve met lots of interesting people.  There are many more people to see over the next five weeks.

I was talking to a client this afternoon who had just attended the Pima Council on Aging (PCOA) Annual Medicare program.  The program provides an overview of choices available to Medicare beneficiaries and highlights changes in Medicare Advantage and Medicare supplements.

My client, who is turning 65 in January, seemed overwhelmed by the information she heard – and she said she was more confused than ever about  making a decision for her Medicare coverage. 

Her husband has a Medicare Advantage plan and has been happy with it – and he has had some medical issues that have been taken care of without any hassles with the insurance company.  My client is healthy and able to afford a Medicare Supplement premium – but she’s not sure she should pay for something she might not use.

The PCOA program talked about the new Medicare Supplements that will be introduced in June 2010, and my client recalled that we had spoken about how attractive the Plan N will be  – with a low premium, but comprehensive coverage, and co-pays for doctors and the emergency room.

My client told a PCOA representative that she had heard she could join a Medicare Advantage plan in January, when she turns 65.  Then she could disenroll from the MA plan in June and sign up for a Medicare Supplement with “guaranteed issue”. 

The PCOA rep said this was not possible because seniors are locked into their MA plan through the end of the year.  So my client called me and said I had given her wrong information.  I knew this was not the case, so I looked at the “Medicare and You 2010″ booklet and found the information.  So here it is:

“Medicare and You 2010″  
Page 75  Section 2—Your Medicare Choices Medigap
If You Want to Buy a Medigap Policy   (the third to last point near the bottom of the page):  

If you join a Medicare health plan for the first time, and you aren’t happy with the plan, you will have special rights to buy a Medigap policy if you return to Original Medicare within 12 months of joining.

— If you had a Medigap policy before you joined, you may be able to get the same plan back if the company still sells it.

— The Medigap policy can no longer have prescription drug coverage even if you had it before, but you may be able to join a Medicare Prescription Drug Plan.

— If you joined a Medicare health plan when you were first eligible for Medicare, you can choose from any policy.

So who knows more about Medicare?  I think I win this one.

November 15^th   to December 31^st is the Medicare Annual Election period.  This is an important time for a number of reasons.

Part D: If you have a stand-alone Medicare Part D plan (that is not part of a Medicare Advantage plan), this is the only time of year when you can change to another plan.  If your premium has gone up, you can shop around for a lower-priced plan.  Your new plan would take effect on January 1, 2010 and you must stay in that plan for the entire year (unless you move out of the plan’s service area).

The average Part D premium is about $35 per month, so if your plan premium is a lot higher than this, it might be time to shop around.  But be sure all of your prescriptions are covered by the plan you are considering and at what co-pay level.

Medicare Advantage: If you want to change your Advantage plan, you can submit an application for a new plan during this period.  Your new coverage would begin on January 1, 2010.  Be sure all your doctors are in the plan network before you sign any papers.  And be sure your prescriptions are covered by the new plan and for what co-pay.

For Medicare Advantage plans, you actually have another opportunity to change plans during January, February, and March.  After the end of March, you are locked into your Advantage plan for the rest of the year.

From talking with seniors, it is interesting to see how many different reactions there are to plan changes.  Some people are willing to change their doctors if a new plan offers lower co-pays or a lower premium.  Most seniors will not switch plans if it requires them to give up their primary doctor or their specialists, because they have  ongoing health problems. Some people will not change their Advantage plan because they want to keep their gym membership.

Some folks are shocked by the idea of a $36 premium for their Advantage plan, while others figure it is a small price to pay for the coverage.  I talked to a lady in Pinal County who is currently paying $100 for her Medicare Advantage plan.  When she saw another plan with a $59 per month premium that includes dental and vision benefits, she thought that was a great deal.

I guess the point of this post is that Medicare beneficiaries have a many choices, even if they are only considering Medicare Advantage plans.  Choice is a good thing, but it requires seniors to do some homework so they make an informed decision that will make the transition to a new plan seamless and hassle-free.

Health Net has upset many of the members in their Medicare Advantage plans by announcing a $36 per month premium for their Ruby 1 plan in 2010.  Seniors in Arizona are accustomed to paying nothing for their Medicare Advantage plans, plans which include drug coverage, gym membership, and even  dental benefits (in some plans) – all for $0 per month premiums.

Those days are gone, or will be gone a year from now.  Humana,  with its $0 premium plan, will be working hard to take lots of business from Health Net.  Secure Horizons will be trying to get back the thousands of seniors it lost to Health Net over the last three years. Seniors are being inundated with mailers from all these companies, as well as CareMore, a new HMO Advantage plan in town.

But back to the cost of Medicare Advantage plans.  Tucson is one of the few places in the country where Medicare Advantage plans have no monthly premium -except for Florida, where there are no premiums and no co-pays for hospitalization and doctor visits.  Up in Phoenix, Humana and Secure Horizons are charging $30 per month for their HMO’s.  Here in Tucson, the same plans have $0 premium – for 2010.

Two weeks ago I was helping a couple who moved to Tucson from Michigan. They needed to change from their Michigan Medicare Advantage plan, which cost them $75 per month, to a local plan.  For them, $36 per month sounded like a good deal. But for many seniors here in Tucson, the idea of paying for their Medicare Advantage plan is just too much to take.

I have been warning everyone that they can change plans for 2010, but they can’t avoid what’s coming down the road in 2011. That’s when the real cuts to Medicare Advantage will begin, and every plan will have to charge a premium or go out of business. 

How can there be a $0 premium for a Medicare Advantage plan?

In Arizona, when a senior signs up with Humana, for example, Medicare pays Humana  around $800 per month to act as that senior’s Medicare coverage.  Humana will pay the medical bills for that senior, and the senior will pay co-pays associated with each service.  In Florida, Medicare pays around $1,100 per month for each person enrolled in a Medicare Advantage plan.  This is why the Humana plans in Florida have such “rich benefits”, such as no co-payment for hospitalization or doctor visits.

When Medicare starts to cut payments to Medicare Advantage plans, the plans are going to pass on costs to people enrolled in the plans.  So seniors in Tucson are going to have to get used to paying monthly premiums in 2011.  Health Net is just ahead of the game by making the change for 2010.  It will be interesting to see how many seniors jump ship to another Medicare Advantage plan in the meantime.  A year from now, things will get really interesting.

The healthcare reform bill that was narrowly passed by the House of Representatives on Saturday night includes provisions that would take effect in as early as 2010.

- Private insurers could no longer deny anyone coverage based on preexisting conditions, place lifetime limits on coverage, or abandon people when they become ill.

-Children, up to age 27, would be allowed to remain on their parents’ family policy.

-Seniors who fall into the donut hole would get a 50% discount on their drug costs.

These would be wonderful changes that would benefit many people I know. They are relatively easy to implement and could take effect quickly.  Other parts of the bill would take three or four years to put in place – like the public option.

On Sunday we were close to getting dramatic change for 2010. On Monday we were told the bill is D.O.A. in the Senate. They say creating legislation in the US Congress is like making sausage – you don’t want to watch how it’s done. I can’t watch anymore because I get excited one day and disappointed the next.  We are so close – and yet so far away from changing our shameful health insurance system. (This is my opinion – and I’m an insurance broker.)

How much does cataract surgery cost?  It depends on your insurance coverage and whether or not you go to a doctor “in-network”.

The information below is from a recent survey of America’s Health Insurance Plan members.  The “billed amount” is what doctors try to get from insurance companies when the patient is out-of-network.  It is also the amount you might have to pay if you don’t have insurance.

The “Medicare fee” column shows how much Medicare pays for the service.  Private insurance companies usually pay an amount that is somewhat higher than what Medicare pays, but much less than the charges for “out-of-network” services.

 VARIOUS OUT-OF-NETWORK PHYSICIAN CLAIMS
FILED IN THE STATE OF ARIZONA IN 2008

Shingles, according to the Centers for Disease Control, is “an extremely painful and debilitating rash that can lead to more serious complications.” The signs of Shingles are usually a rash on one side of the body, and you’re vulnerable if you’ve had chickenpox because the virus remains dormant in your body for life and can reappear as Shingles at any time.

Zostavax is the vaccine for Shingles and it is highly recommended for people over age 60. But there seems to be a lot of confusion over how seniors can get the vaccine and what it will cost. I’ve heard that seniors on Medicare, or enrolled in Medicare Advantage plans, have gotten different answers from the same insurance company.

In one case, a husband and wife are both enrolled with the same Medicare Advantage plan. The wife got her vaccine from her primary doctor and paid nothing. When her husband went to his doctor to get the vaccine, he was told he would have to pay $150. The last I heard, the husband was still not satisfied with the answers he was getting from the insurance company.

In most cases Zostavax will come under Part D, but you need to check with your plan to see what the co-payment will be. In many plans Zostavax is a “specialty drug” with a co-pay of 25% or even 33%, depending on the plan. The actual cost of Zostavax should be $150, meaning a Part D co-pay should be between $30 and $50.

However, in most cases you must also pay co-pay to have your doctor administer the shot. And I wouldn’t be surprised if your friends who seek out the Shingles vaccine will have a different payment experience than you.  That’s just the way the crazy system works.

Cigna, Secure Horizons, and Coventry are cancelling their PFFS plans in Arizona as of January 1, 2010.  Health Net is cancelling its PPO Violet plan in Arizona as well.

People in these plans should have received their cancellation letters by now, and they have some options for seeking out new Medicare coverage.  They can switch to another Medicare Advantage plan or they can go back to Medicare and pick up a Medicare Supplement with “guaranteed issue”.

Guaranteed issue means that a person who might be 70 years old and have health problems can get a Medicare Supplement plan with no questions asked.  They will pay the premium rate for their age group, but will have no penalty because of their health condition.  This is a great opportunity to get the full coverage offered by a Plan C or F Medicare Supplement, and people in this situation are encouraged to look seriously at this option.

A copy of the cancellation letter from the Medicare Advantage plan that is being cancelled must be sent with the  Medicare Supplement application.  The cancellation letter will say clearly that  the person has “guaranteed issue”  for a Medicare Supplement with any company.  There are also boxes on the application to indicate t he applicant has guaranteed issue.

Most insurance agents will not be aware of this option as most are focused on signing seniors up for Medicare Advantage plans.  Medicare Supplements are more expensive than Medicare Advantage if a person is healthy.  But people with medical issues such as cancer or chronic illnesses, might save money by paying a $130 per month premium for a Medicare Supplement and then having no co-pays when they need medical care.  And even a healthy person may find themselves with medical problems down the road.

I actually read the House bill on healthcare reform that was announced on Thursday by Nancy Pelosi – well, I read the parts dealing with Medicare Advantage and Part D. You pretty much need a translator to understand the odd language that refers to previous bills and paragraphs and all sorts of mumbo jumbo, but I did understand a few points that will be well-received by seniors.

The bill directs certain actions to be taken as early as 2010 which will affect many seniors and Medicare beneficiaries with high drug costs:

The Part D initial coverage limit would be raised by $500 for 2010. The current level at which people with high drug costs will fall into the donut hole in 2010 is $2,830. This would be raised to $3,330, allowing some seniors to stay out of the donut hole a bit longer. The initial coverage limit would be raised each year until there is no donut hole in 2019.

The bill also requires pharmaceutical companies to agree, by December 31st of this year, to discount the cost of their drugs by 50% for Medicare beneficiaries who find themselves in the donut hole. It looks like this change will also take effect for 2010. If pharmaceutical companies do not agree to provide this discount, they would not be allowed to sell their drugs through Part D prescription plans.

The bill also mandates the elimination of the Open Enrollment Period from January 1st to March 31st, when people can switch Medicare Advantage plans. This would limit the period for switching Medicare Advantage plans to the period of November through mid-December each year. Currently people can switch Medicare Advantage plans between November 15th and March 31st. The change will not take place until 2011, so seniors will be able to change Medicare Advantage plans between January and March of 2010. 

This change will make the Annual Election Period in the fall very chaotic – especially if cutbacks to Medicare Advantage plans result in major changes to plans next fall.  Ten million seniors will have 45 days to figure out how to change their Medicare Advantage coverage and what the best plan might be – or if they should (and could) go back to Medicare.  Next fall is going to be VERY interesting and VERY chaotic.

All of this depends, of course, on the healthcare legislation being voted on…and being passed by both the House and Senate.

If you watch much television, you’ve probably seen the advertisements for AARP Medicare insurance products.   Ads for the AARP Medicare Supplement must be on CNN 50 times per day. And I’ve recently noticed an ad for the AARP Medicare Complete Advantage plan is being aired just in time for the Medicare annual enrollment period (November 15 to December 31). 

Here is an example of how effective and how confusing advertising can be for seniors.

Elaine is a friend of mine in Rhode Island who is 80 years old. I was visiting Elaine last summer and the topic of Medicare came up, so I asked what coverage she had.  Elaine went through her wallet and pulled out not one, but two AARP cards.  One card was for a Medicare Supplement and one was for a Medicare Advantage plan – both from AARP.

I was puzzled and so was Elaine.  Which coverage did she have? Elaine wasn’t sure herself, but she knew she had called AARP three months earlier to sign up for the Medicare Supplement policy (at a cost of $175/month). So, even though it was Saturday, I called 1-800-MEDICARE and asked the question, “What do you see in Elaine’s Medicare record that shows if she is covered by original Medicare or a Medicare Advantage plan?”

The Medicare representative said Elaine was enrolled in the AARP Medicare Complete plan, which is a Medicare Advantage plan (also known as a Medicare replacement plan). I asked if Elaine’s Medicare Supplement policy would work with Elaine’s Medicare Advantage plan. I knew the answer but wanted the Medicare Rep to tell Elaine.

The answer was that a Medicare Supplement only works when a person is on original Medicare. The Med Supp covers the gaps in Medicare. But when a person enrolls in a Medicare Advantage plan, the plan pays the medical bills, not Medicare.  Therefore, Elaine’s AARP Medicare Supplement was useless.

“Let’s call AARP.”

So, with Elaine’s Medicare coverage clarified, I called AARP to find out how Elaine got signed up for a Medicare Supplement and was paying $175/month for a useless policy. The AARP representative said all callers are asked “if they have coverage already”. When I asked if customers are required to answer more specific questions about their coverage, the AARP rep said that was not part of the phone interview script she had.

Many seniors have made the same mistake.

As Elaine recalled why she signed up for the AARP Medicare Supplement, she said she needed to cover the gaps in her Medicare Advantage plan.  These are the co-pays for doctor visits, hospital stays, tests, etc.  But Medicare Supplements only fill the gaps in Medicare coverage.  They don’t fill the gaps in Medicare Advantage plans.

 Elaine was embarrassed by her mistake, but I was able to tell her that she was not the only person to be confused by the AARP advertisements. You see, I have met other seniors in Tucson who did the same thing as Elaine.

I told Elaine to cancel the Medicare Supplement policy and to ask AARP to refund the premiums she had paid. Medicare Supplement policies can be cancelled at any time – but Medicare Advantage plans and Part D Drug plans can only be cancelled at the end of the year.

 I wonder how many seniors are in the same AARP boat?