I wrote earlier today about the termination of the Any Any Any Medicare Advantage plan.  The 2,983 Medicare beneficiaries in Arizona who are losing their Advantage plan will have three options going forward:

1) Only Medicare – but beware

They will be moved to Original Medicare and will be automatically enrolled into a Part D plan. They can choose to stay with this coverage – but having only Medicare leaves them with some serious financial risks.  The 20% co-insurance for Part B services has no cap, meaning bills can go on and on.

Having to pay 20% of the cost of chemo and radiation therapy can quickly add up to $10,000 or more.  20% of a $10,000 emergency room bill is $2,000. (Note: Part B services include everything other than hospitalization, skilled nursing facility charges, home health care, and hospice).

2) Enroll in another Advantage plan

They will get a special election period (SEP) to enroll in another Medicare Advantage plan. They get one opportunity to enroll in another Advantage  plan up until May 31st, 2013.

3) Guaranteed issue for Medigap

They can apply for a Medicare supplement no matter what their health condition – and they will be accepted.  This is called “guaranteed issue”.

The letter they receive informing them of their Medicare Advantage plan termination will tell them about this option. A copy of the termination letter must be submitted with the Medicare supplement application.  (Note: “Medigap” is another term for “Medicare supplement” because these plans fill the gaps in Medicare.)

When a Medicare Advantage plan ceases operations, or is terminated, people enrolled in the plan have the right to buy Medigap plan A, B, C, F, K, or L that is sold by any insurance company in the state. (From the CMS publication: Choosing a Medigap Policy, page 22.)

Some Medigap details

**People with limited incomes (but over $950 per month) might consider a Medigap K or L because these plans have fairly low monthly premiums – though they do require co-insurance payments for just about every medical bill. Plan K has a $4,660 annual cap on a person’s out-of-pocket costs, and the plan L cap is $2,330.

When shopping for Medigap, be sure to compare prices from several companies. Paying more than $70 per month for Plan K, or $115 for Plan L is too much.

**Sorry to say, this Medigap guaranteed issue applies only to people on Medicare who are over 65.  Arizona does not require Medigap companies to enroll disabled Medicare beneficiaries who are under 65.

**People with monthly income below $950 probably qualify for Medicaid help with their co-insurance and do not need a Medigap plan.  There is a Medicare Advantage plan in Yuma County for people who are eligible for both Medicare and Medicaid. (AHCCCS is Arizona Medicaid.)

Medicare Advantage plans run by Universal Health Care, known in Arizona as the “Any Any Any” plan, are being shut down as of midnight Sunday, March 31st.  The insurance company that runs these Medicare Advantage plans has gone bankrupt and its Florida headquarters has been raided by the FBI.

People enrolled in the Any Any Any plan are just now receiving letters telling them their Medicare Advantage plan will end as of Monday, April 1st.  If they  take no action to enroll in another Advantage plan, they will be moved back to Original Medicare and will be automatically assigned a Part D drug plan. This will take effect on Monday, April 1st.

If people move quickly, they can enroll in another Medicare Advantage plan this weekend and their new plan will begin on April 1st.  With such last-minute notification, most people will end up having just Medicare and Part D through April.

People losing their Any Any Any plan will have a Special Election Period (SEP) up until May 31st to move into another Medicare Advantage plan.

The Any Any Any plan is a big deal  in Yuma with 1,129 enrollees.  This is almost double its closest competitor, Humana. Unfortunately, people in Yuma and rural areas in Arizona don’t have many Medicare Advantage choices. And the choices they do have come with monthly premiums that are much higher than the Any Any Any plan.

People who live in Pima and Maricopa counties have many zero-premium Medicare Advantage plans from which to choose. Medicare beneficiaries in Yuma don’t have this luxury.

People can get help figuring out what to do by calling Medicare (800-633-4227). Or, they can call the insurance agent who signed them up with the Any Any Any plan. I have a feeling there will be lots of insurance agents in Yuma offering assistance to people – but again, their choices are limited and more expensive that what they have had.

Any Any Any PFFS enrollment in Arizona counties from the latest CMS data:

Yuma: 1129
Maricopa: 747
Gila: 382
Coconino: 284
La Paz: 156
Greenlee: 82
Apache: 28
Graham: 18
Pima: 11

In Pima County, 11 people are enrolled in the Universal Hassle-Free PPO, according to an email I received from CMS.

The CMS Medicare Advantage enrollment data can be found at:

http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MCRAdvPartDEnrolData/Monthly-MA-Enrollment-by-State-County-Contract-Items/MA-Enrollment-by-SCC-2013-03.html

“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.