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.

Medicare Part D drug coverage was introduced in 2006 and  seniors were told they should sign up for this new program.  With monthly premiums around $15 per month and lots of advertising about this new Medicare benefit, most seniors and Medicare beneficiaries enrolled in a drug plan.

Three years later, monthly premiums average $35 per month and some plans have skyrocketed to $59.  If you are unhappy with your Part D plan premium you can only make a change once per year: November 15 – December 31.

If your 2010 premium will be higher than $45, you might want to consider changing plans, but this is not a simple task.

****I should point out that 40% of seniors in Tucson are enrolled in Medicare Advantage plans which  include get Part D.  People who have a Medicare Supplement, or just Medicare would buy a “stand-alone” Part D plan, and those are the people I’m addressing here.

 You can sign up for new Part D coverage or change your current Part D drug coverage between November 15 and December 31st, and your coverage would begin on January 1st, 2010. While Part D is a Medicare program, the drug plans are provided by insurance companies.

To find the right plan for yourself, you can go to www. Medicare.gov and click on “compare drug plans”. You put in your zip code and the system will give you a list of companies offering drug plans in your county. There are 46 drug plans offered in Pima County (!!??).

If you take brand name drugs you will want to use the function on the Medicare site that allows you to put in your prescriptions info. The system then tells you the best plans based on the drugs you take. You see, each company has a different “formulary” and some drugs might not be on every company formulary. As well, some brand drugs are a tier 2 on one company’s plan and a tier 3 on another company’s plan. Tier 2 drugs might have a $30 co-pay while tier 3 could be $70 – a very big difference.

The next thing you will look at is cost, and the lowest cost plans come up at the top of the list of plans offered in your county. These plans cost between $17 and $20 dollars per month, but most people don’t choose these plans because they have a deductible of $310. This means you must pay the first $310 of your prescription costs – while paying $18 per month.

Most peope who take several brand drugs will choose the higher priced plans, which run between $34 and $60. I see that Unicare has a plan with no deductible for $25/month, but you’d need to be sure all your medications are covered in their formulary.  Unicare is owned by Wellpoint, which is the largest health insurance company in the U.S.

The most popular drug plan is the AARP Preferred plan for $35.20 per month. United is the actual insurance company for the AARP plan and they have a large formulary.

So, if you think your Part D premium is too high, you do have some options – if you are willing to do some research through http://medicare.gov  .