“Obama promised,  ‘If you like your current insurance, you keep that insurance.’  He lied.”   I have seen these words over and over again in letters-to-the-editor and comments on websites, so I thought I would address the issue of cancellations of certain Medicare Advantage plans.

Several thousand Medicare beneficiaries in Pima County have received letters informing them that their Medicare Advantage plan is being canceled as of January 1.  The plans being canceled are:  Evercare, a chronic illness PPO plan; Secure Horizons Medicare Direct Plan 3 private-fee-for-service (PFFS); Unicare’s PFFS; Universal Health Care PFFS. There may be other PFFS plans in Pima County with a few enrollees, but I haven’t talked to anyone in those plans.

Across the country most plans being canceled are private-fee-for-service (PFFS) plans. There was a story in Boston about a PFFS Medicare Advantage plan cancellation that will affect 22,000 people. The Boston Globe reported on the story and the outrage among seniors, many of whom blamed “Obamacare” for changes to their Medicare.  The Boston Globe got the story wrong as did many of the people enrolled in the plan being canceled.

Why are Private-Fee-For-Service Plans being canceled?

These plan cancellations have nothing to do with the Affordable Care Act (aka Obamacare) that was passed earlier this year. The cancellations are due to a 2008 law which rescinds the PFFS provider network exemption in areas with at least two local network plans (HMOs or PPOs). Therefore, wherever HMOs and PPOs exist, PFFS plans are required to have a network as of January 1, 2011.  The companies mentioned above determined that they did not want to create a network, or, in the case of Secure Horizons, they already had their own HMO plans in places like Pima County.  A representative from Universal Health Care told me last spring that the company was working on building a network of contracted doctors and hospitals.  But in September, Universal announced it would not offer a network PFFS plan in Pima County but would continue to offer non-network plans in outlying areas like Yuma.

The Incidental Economist, who studies Medicare and Medicare Advantage, explains PFFS plans very well, so I thought I’d use excerpts from a recent post of his.

[Private-fee-for-service plans] are paid like other Medicare Advantage (MA) plans but are not required to establish networks, manage care, report on quality, or offer drugs, among many other exemptions. They are essentially enhanced fee-for-service (original Medicare) products or subsidized Medigap. For all this, they are paid well above [Medicare fee-for-service] cost. They have been the fastest growing type of plan, responsible for most of the recent increase in cost of the MA [Medicare Advantage] program.

Medicare Advantage plans were originally created to save Medicare money.  See my post 1996-and-tucson-medicare-hmos. The future of Medicare Advantage is in HMO’s that can manage care and control costs.  PFFS plans turned out to be an expensive experiment that failed the cost control test for Medicare and the insurance companies running them. This is why PFFS plans are being canceled – not the Affordable Care Act.

Medicare beneficiaries enrolled in Medicare Advantage and Part D will be receiving important information from their plans before the end of the month.  All Advantage and Part D plans must send out their Annual Notice of Change (ANOC) before the end of October.  I have heard from several clients that they have received phone calls or mailings telling them to be on the lookout for important mail from their Advantage plan.

These alerts to Medicare Advantage plan members are very important this year because they can only move to another plan between November 15th and December 31st. After January 1st, people enrolled in an Advantage plan or Part D will be stuck with their plan for all of 2011 (unless they want to drop their Advantage plan and return to Medicare). In past years, people could make one change to their Medicare Advantage coverage between January 1st and March 31st.  This “Open Enrollment Period” has been canceled.  It is gone. So seniors had better pay attention now.

BEWARE OF SOME MAIL.

I have heard from several people that they received mailings that were very confusing.  A client in Green Valley emailed me about a mailing he received that said he “must respond” to see if he qualifies for certain benefits.  He said he thought this mailing might be from Medicare, but he wasn’t sure.  He wanted to know if he needed to respond to this mailing.  I asked him to send me the card so I could look at it.

Last week I met with a woman who is turning 65 soon and she had received a similar confusing post card.  She told me she did respond to the card because she really thought it had something to do with qualifying for Medicare benefits.

When I received the mailing from my Green Valley client it was clear to me that this postcard, with official-sounding language, was just a marketing piece. And the woman who replied to a similar piece of mail had already been contacted by an insurance agent.  An agent showed up at this lady’s house (!!!) and said, “You asked for more information, so here I am”.

The point of this story is that Medicare beneficiaries and people soon-to-be on Medicare need to look very closely at their mail.  Anyone enrolled in Part D or Medicare Advantage should study what they receive from their plan. They know who this information is from, so this is  not the problem.  The problem mailings come from insurance agents and big agencies that are trying to sell something to seniors.

If you reply to a marketing piece (a post cared or letter), you are giving an insurance agent permission to call you. However, it is totally against Medicare rules for an insurance agent to show up at your house without an appointment!

Back to the mailing piece my client forwarded to me:  The post card says, “Return this postage paid card to see if you are eligible for these benefits, or for a quicker response call 1-888-745-2320″.  So I called this number…..(I’m writing this on Saturday evening)…and the answering machine message said, “Thank you for calling…. [a well-known Tucson insurance agency]. I guess this agency uses these mailings to generate leads for their agents.

I suppose these mailings are legal, but the people I’ve written about here are very smart people who were totally confused by what they received. Both were inclined to respond to the mailings – so I guess this is a very effective strategy for getting into seniors’ homes to sell any number of products.

If you want to do your own research into Medicare Advantage plans or Part D drug plans, you can use the Medicare.gov website – but you’d better have some patience. The Medicare Plan Finder on Medicare.gov has been re-designed and it’s supposed to be more user-friendly, but it has some problems.

As an insurance agent I have often used the Medicare Plan Finder to look up and compare Part D drug plans and Medicare Advantage plans, so I am familiar with the seven steps required to get me to the list of drug plans and Medicare Advantage plans offered in my county.

My opinion of the revised Medicare Plan Finder is that it is clumsy and confusing – and it is broken because it currently does not bring up all the Medicare Advantage plans in Pima County.  When I put in my zip code today, I found that at least three plans were missing from the Medicare Plan Finder list.

Missing from Medicare Plan Finder list: Health Net Ruby 1;  AARP Medicare Complete Plan 1;  Humana Local and Regional PPOs with Part D

As an insurance agent I have used the Medicare Plan Finder to compare Advantage plans side-by-side for clients. The new plan comparison does not provide all of the information on the side-by-side page to allow for a comparison of every plan benefit and co-pay.  For example, in order to get the hospital co-pay figures, you must click on a link that will take you to a summary of benefits – but you must then scroll far down that page in order to get to the “hospital co-pay” information.

The Medicare Plan Finder can be of help if a person takes several prescription drugs and needs to find the stand-alone Part D plan that works best for them.  The Plan Finder let’s you put in your prescriptions and dosage and it will identify the Part D plan that will cover your prescriptions at the lowest cost to you.  I spoke to a man last year who was able to find a Part D plan that covered his expensive generic pain medication through the donut hole.  This saved him thousands of dollars.

Having used the Medicare Plan Finder hundreds of times, I found myself getting impatient with the the new version. But at least I knew what I was looking for.  I can imagine a person using the site for the first time would get very frustrated and confused by all the clicks and tabs that must be used to find the details of plans.  In conclusion, I think the old version was better.

FOR MORE INFORMATION ON YOUR MEDICARE CHOICES CLICK HERE.