Medicare Advantage...and the dis-Advantages

What is Medicare Advantage?

Medicare advantage plans are an alternative to traditional Medicare.  The federal government pays private health insurance companies to offer insurance plans that have benefits that are at least as good as the payment models offered under traditional Medicare. 

The ‘advantages’ part of these plans may include value-added services that are not included under traditional Medicare, such as: preventive dental and vision, fitness/gym reimbursements, discounts on over-the-counter items and 24-hour nurse lines. 

Medicare Advantage is a managed care plan that charges low monthly premiums in exchange for relatively strict local networks, prior authorizations/referrals requirements and copayments that come out of your pocket whenever a medical service is utilized. (You must still pay your monthly Medicare Part B premium.)  Many of these plans do include prescription drug coverage.

Another advantage of a Medicare Advantage plan over traditional Medicare…the protection provided by an annual out-of-pocket maximum. (The current national average is $5400/year*). Traditional Medicare does not have any annual out-of-pocket limits.

According to the Kaiser Foundation, in 2015, 17.6 million or roughly 31% of all Medicare beneficiaries are now in Medicare Advantage plans.*

Which is a Better Deal – Medicare Supplement or Advantage?

A cheap premium should not be the only factor considered when deciding on your health coverage.  Whether Medicare Advantage is a better deal than original Medicare + a Medicare Supplement/Part D Plan depends on a host of individual factors, such as your comfort level with managed care and your willingness to trade lower up-front premiums while you are healthy for the risk of higher out-of-pocket costs if you get seriously ill. 

Mary Ashkar, Staff Attorney for the Center for Medicare Advocacy, stated that, "The best candidate for Medicare Advantage is someone who's healthy.  We see trouble when someone gets sick."  ** 

Education has become the best protection I can provide my Medicare Advantage clients. The biggest issue my office faces with these plans has to do with skilled nursing facilities/nursing homes.

Medicare Advantage plans are designed to help curb unnecessary medical spending and even fraud through more extensive oversight and review than original Medicare. Unfortunately, this creates a system of checks, balances, and paperwork that many hospital and nursing home administrators are not fond of.

Here are some recent scenarios involving our clients and local nursing facility admittances:

1.   Initial authorizations to be admitted into a nursing home are sometimes denied.  Normally, the denial can be resolved by one phone call from the physician who has referred you for skilled care.  If you get a denial, make sure the referring physician/hospital is doing the leg work needed to get it fixed for you.

2.   The nursing home recommended that the Medicare Advantage member drop their plan and go back on traditional Medicare and buy a supplement.  This is NOT sound advice for many reasons!  While the paperwork is easier for the nursing home under traditional Medicare; our clients usually find that their out of pocket expenses are much higher on Medicare alone.  Remember, Medicare Supplements are medically underwritten.  By the time you are sick enough to need skilled care at a nursing facility; you are probably too sick to qualify for a Medicare Supplement.  This lack of knowledge by nursing home staff has cost my trusting clients thousands of dollars.

 3.   Networks also apply to skilled nursing centers, and many times the nursing home that is closest to your home may not be the one that is in-network with your plan.  The additional mileage does cause added stress to caretakers who drive multiple times a day to see their loved ones.  If you want to be free to select a nursing home, there are short-term nursing home plans that can be purchased to ensure you can go where you want to go.

 4.   Just remember, the best scenario for any nursing home is someone who is ‘self-pay.’  This means that 100% of the expenses are being billed to you directly.  Before ever agreeing to this arrangement, please call my office to be sure that your Medicare Advantage plan and skilled nursing facility has coordinated your care and benefits in a manner that is of the highest benefit to YOU.

Overall, the feedback from our Medicare Advantage clients is that they are satisfied with their plan.  However, waiting until an unexpected hospitalization, rehabilitation, or cancer diagnosis to fully understand the potential costs involved with these plans does not usually make for a good outcome. 

An option that could fill the gaps in Medicare Advantage coverage is through reasonably priced insurance policies for short-term nursing home stays and hospitalization.  Upchurch Insurance Services can provide a quote to you if you are interested in exploring whether this option could save you a lot of worry and money in the future.

The Medicare Annual Enrollment Period is from October 15th through December 7th.  It is during this time that Medicare Advantage plan members will have the opportunity to thoroughly review their plan’s annual notice of changes (benefit and cost changes); as well as move to a new plan or back to original Medicare.

Cited Sources:

*http://kff.org/medicare/fact-sheet/medicare-advantage/   

**http://www.foxbusiness.com/features/2011/08/31/six-questions-about-medicare-advantage-plans.html

Drug Manufacturer Coupons and Medicare

Know Before You Go

Advertising for prescription drugs has skyrocketed in recent years, promoting new brand-name drugs that treat almost every ailment known to man.  It's no secret that the pharmaceutical industry is BIG business, and drug companies spend big money to get new medications out to the masses in several different ways - one method is through the media and another method is through coupons and rebates.

To entice consumers to purchase or switch to a particular medication, drug manufacturers will often offer coupons.  However, many people don't realize that offering these coupons to consumers who are on federal drug programs such as Medicare or Medicaid is actually illegal.

The federal law; "The Anti-Kickback Statute" makes it a 'criminal offense to knowingly and willfully offer, pay, solicit or receive any remuneration to induce or reward the referral or generation of business reimbursable by any Federal health care program." 

In other words, using a coupon to purchase a prescription drug in conjunction with a Medicare Part D Plan is not allowed.  There are safeguards in place, as most of the coupons do state (in very small print) that they are not to be used by Federal program beneficiaries, and many knowledgeable pharmacy employees will not allow you to use them if you are also using your Part D plan.

A protection provided by the anti-kickback statute is that it might derail physicians from prescribing and Medicare beneficiaries from choosing brand-name drugs over lower priced generic drugs just because there is a coupon available.  However, Medicare members often feel like they are punished for having a Part D Plan when they are unable to take a generic medication.

Options Available when Your Copayments Cost too Much

There are a few options available to those who are on brand-name drugs and are being charged high copayments.

1.  Patient Assistance Programs (PAPs) - These are programs created by the pharmaceutical companies to provide free or discounted medicines to people who cannot afford them.  Each program has its own qualifying criteria.  To find out if a medicine that you are on has a PAP; call your Medicare Insurance agent (Upchurch Insurance Services), doctor's office or pharmacist to see if they can assist you.

2.  Generic drugs come on the market daily!  Be sure to check with your doctor OFTEN to see if any of your medications have a lower-cost alternative available. 

3.  Extra Help for Prescription Drugs is a program provided through the Social Security Administration for those who meet certain income and resource requirements.  Applications can be completed online at ssa.gov, by phone (800-772-1213), or in person at your local Social Security office.

4.  Do not use your Medicare Part D Plan for medications that can be purchased much cheaper through the use of coupons, rebates or pharmacy discount plans.  Although, an important note to make:  Any medication purchased without your Medicare Part D Plan will not count towards your deductible, coverage gap or catastrophic gap coverage.

CMS Releases 2016 Medicare Parts A & B Premiums and Deductibles

Medicare Part B Premiums:

Medicare Part B Premium for those already enrolled in both Social Security and Medicare:  $104.90

Medicare Part B Premium for those NOT enrolled in Social Security but enrolled in Medicare:  $121.80

Medicare Part B Premium for newly eligible Medicare beneficiaries:  $121.80

Medicare Part B Deductible: 

                   2015:  $157                        2016:  $166

Medicare Part A Deductible & Coinsurance Amounts:

                                                                2015                 2016

Inpatient Hospital Deductible:                                  $1260                     $1288

Daily Hospital Co-Insurance (Days 61 – 90):             $315                       $322

Daily Hospital Co-Insurance          

(Days 91 – lifetime reserve):                                      $630                      $644

Daily Skilled Nursing Facility Co-Insurance

(Days 21-100):                                                          $157.50                  $161

Part D Deductible & Coverage Gap Limits:

                                                                                  2015                         2016

Maximum Deductible a Part D Drug

Plan May Charge:                                                              $320                          $360

Coverage Gap Begins

(Total Out-of-Pocket for you and Plan):                             $2960                       $3310

Coverage Gap Ends/Catastrophic

Coverage Begins:                                                               $4700                     $4850                                               

What is Medicare Advantage?

What is a Medicare Advantage Plan?

Medicare Advantage Plans, sometimes called "Part C" or "MA or MAPD Plans," are a type of Medicare health plan offered by private insurance companies approved by Medicare.  Medicare pays a fixed amount each month to the insurance companies who are administering these plans.  Medical claims for Part A and Part B services are submitted to the Plan for payment, rather than directly to Medicare.

Medicare Advantage Plans cover all services that Medicare covers, and may also offer extra coverages.  Many Medicare Advantage Plans also cover prescription drugs, so you do not require a separate Part D plan.  In fact, enrolling in a separate prescription drug plan will normally cause an automatic disenrollment from your Medicare Advantage Plan.

Some Medicare Advantage Plans also offer routine dental, vision and hearing services; as well as 24-hour nurse hotlines, fitness memberships and chronic conditions care management services.

Unlike original Medicare and traditional Medicare supplements, Medicare Advantage Plans have networks; such as preferred provider organizations, Private Fee for Service and Health Maintenance Organizations (PPOs, PFFS, and HMOs). It is important to know what type of plan you are enrolling in as seeing a doctor outside of the Plan’s network could result in higher out of pocket expenses, and sometimes will result in no coverage at all.

Medicare Advantage Plans may also have different rules for how you get services, like whether you need a referral to see a specialist or need a prior authorization for certain prescription drugs.

Costs Associated with a Medicare Advantage Plan

Under original Medicare, you pay a Part B premium, which is usually automatically deducted from your social security check – for 2015 it was $104.90.  In order to sign up for a Medicare Advantage Plan, you must be enrolled in Part A and B of Medicare; and will still pay this Part B premium.

Also under original Medicare, Medicare usually covers 80% and you pay the remaining 20%.  What often makes a Medicare Advantage Plan attractive is the annual out-of-pocket maximum limit.  This is an important protection for Medicare beneficiaries.

Medicare Advantage Plans charge a monthly premium, which varies by what area you reside in.  These premiums are often lower than what you would pay for a traditional Medicare Supplement; however, in exchange for a lower premium, you will be asked to pay copayments, coinsurance and deductibles for each medical service you receive.

Who Can Enroll in A Medicare Advantage Plan?

·         Anyone 65 years of age or older

·         Anyone who is under the age of 65 and on Medicare disability

·         You must have Parts A and B of Medicare

·         You must live in the Plan’s service area

·         You cannot have End Stage Renal Disease (ESRD)

When Can I Enroll?

·         During the Initial Coverage Election Period(ICEP) – The seven month period when you are first eligible for Medicare (Three months before, the month of and three months after)

·         During the Annual Election Period (AEP) – October 15 – December 7 each year

·         During a Special Election Period (SEP) – There are certain circumstances that will allow enrollment into a Medicare Advantage Plan outside of the first two enrollment periods, a few examples are:  Moving into a new service area, going in or out of a nursing home, receiving or losing extra help, or involuntarily losing employer coverage

A Medicare Advantage Plan is one option that a Medicare beneficiary has.  It is important to understand how these plans work before making the decision to enroll.  An experienced Medicare Insurance agent should be able to explain the differences between traditional Medicare, Medicare Supplements and Medicare Advantage Plans so that you can make the right decision for you.

Just what is Medicare's Annual Election Period (AEP)?

When is the Medicare Open Enrollment Period (also known as ‘The Annual Election Period’ or AEP)?

The Medicare AEP is October 15 - December 7, 2016.  Plan changes during this time period will not take effect until January 1, 2017.

What is the Medicare Open Enrollment Period?

Medicare Advantage (Part C) and Prescription drug plans (Part D) make changes each year—things like cost, coverage, and what providers and pharmacies are in their networks. October 15 to December 7 is when all people with Medicare can change their Medicare health plans and prescription drug coverage for the following year to better meet their needs.

What can I do during AEP?

• Switch from Original Medicare to a Medicare Advantage plan.
• Switch from a Medicare Advantage plan back to Original Medicare.
• Switch from a Medicare Advantage plan to different Medicare Advantage plan.
• Switch from a Medicare Advantage plan that doesn’t include drug coverage to one that does, and vice versa.
• Join a Medicare prescription drug plan.
• Switch from one Medicare prescription drug plan to another one.
• Drop your Medicare prescription drug coverage.

How do people know if they need to change plans?

People in a Medicare Advantage or prescription drug plan should always review the materials their plans send them, like the “Evidence of Coverage” (EOC) and “Annual Notice of Change” (ANOC). If their plans are changing, they should make sure their plans will still meet their needs for the following year. If they’re satisfied that their current plans will meet their needs for next year and it’s still being offered, they don’t need to do anything.

 Where to go for Help?

https://www.medicare.gov/find-a-plan/questions/home.aspx

Or, talk to an experienced Medicare Insurance agent in your area.

Medicare Loophole: Observation vs Inpatient Status at the Hospital

Your hospital status—whether you're an inpatient or an outpatient—affects how much you pay for hospital services, and may also affect whether Medicare will cover care you get in a skilled nursing facility following a hospital stay.

You're an inpatient starting when you're formally admitted to the hospital with a doctor's order. The day before you're discharged is your last inpatient day.

You're an outpatient if you're getting emergency room services, observation services, outpatient surgery, lab tests, or X-rays, or any other hospital services, and the doctor hasn't written an order to admit you to a hospital as an inpatient. In these cases, you're an outpatient even if you spend the night in the hospital.

 The Two-Midnight Rule

CMS adopted the Two-Midnight rule for admissions beginning on or after October 1, 2013.  

In general, the Two-Midnight rule stated that:

Inpatient admissions will generally be payable under Part A if the admitting practitioner expected the patient to require a hospital stay that crossed two midnights and the medical record supports that reasonable expectation.

 Observation Status

Observation services are hospital outpatient services you get while your doctor decides whether to admit you as an inpatient or discharge you; and could span several overnight stays in the hospital. This is often a complex medical decision based on your doctor’s judgment and your need for medically necessary hospital care that is expected to last at least 2 or more midnights.

Why it Matters

Under Part A of Medicare, all services related to an inpatient hospital stay are completely covered under the Medicare Part A deductible. ($1260 in 2015)

If a patient is in need of post-acute care, like at a nursing home, Part A will also cover the first 20 days at a $0 cost share – following a 3 day stay as an inpatient in a hospital (Click here to read more about Medicare’s coverage of nursing home stays in last week’s blog.)

Observation stays, covered under Part B, may include several different services; such as emergency room, labs, x-rays and tests.  Under Part B, a beneficiary will be responsible for 20% of the cost of EACH service. 

While no single outpatient service copay will be more than the $1260 inpatient hospital deductible, the total copayments for all services can easily add up to over that.  Also, adding to that bill, could be the non-coverage of any medication you are given under observation status.

Up until this past August, many people didn’t even know they were not an inpatient in the hospital until they began receiving bills for outpatient services several weeks later.

 A Recent Law in Transparency

In August of 2015, President Obama signed into law ‘the Notice of Observation Treatment and Implication for Care Eligibility Act’, requiring hospitals to provide written notification to Medicare beneficiaries within 24 hours after receiving observation care. The notification will detail the:

·         Denial of admission;

·         Potential financial implications; and

·         Reasons for denial of admission

 Medicare beneficiaries have an increasingly greater role in understanding and managing their own health care.  Be sure that when you or a loved one is taken the hospital that you understand what level of care you are receiving.  Not questioning the doctors about your admittance status can be a costly mistake.

Resources:

www.medicare.gov

www.cms.gov

Nursing Home Stays...Am I Covered?

One of the the biggest misconceptions that people on Medicare or who are close to going on Medicare have is in regards to Nursing Home coverage.

Medicare does not provide coverage for the majority of nursing home stays, and when they do, there are very specific rules for services they will cover.

Medicare should pay for skilled nursing facility (SNF) care if:

·         The patient was hospitalized (as an in-patient, not on observation status) for at least three days and was admitted to the SNF within 30 days of hospital discharge.

·         The beneficiary requires skilled nursing or skilled rehabilitation services, or both, on a daily basis.  Skilled nursing and skilled rehabilitation services are those which require the skills of technical or professional personnel such as nurses, physical therapists, and occupational therapists.  In order to be deemed skilled, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel.

·         The skilled nursing facility is a Medicare certified facility.

Medicare’s coverage if those guidelines are met:  (2015 amounts)

·         Days 1-20:  $0 copayment

·         Days 21-100:  $157.50 per day copayment

·         Days 100+:  Patient is responsible for 100% of the costs

Medicare supplements (Medigap); will cover the patient’s deductibles and coinsurance costs up to day 100; so long as the above Medicare guidelines are met.

I get several calls a year from caregivers who tell me that their parent is unable to stay at home because of their ability to care for themselves in terms of eating, remembering to take medicines, toileting, and bathing; and want to know what their options are.  Unfortunately, this level of care is called ‘custodial,’ and nursing home stays for custodial care alone is not covered by Medicare.

There are plans designed to help pay for long term care in nursing homes; however, as with any insurance, you are paying for a service that you hope to not ever have to use, and these plans tend to be almost prohibitively expensive.

There are also plans available designed to help cover short term stays in a skilled nursing and assisted living facilities.  These medically underwritten plans have very few restrictions on what is covered; and cover nursing home stays that are usually for a year or less.  Recent research states that 80% of all nursing home stays are for less than one year!  These short-term plans are generally very affordable plans for the coverage received, and the potential benefits far outweigh the modest monthly premium costs.

I have seen entire life-savings wiped out in a one years’ stay at a nursing home.  My first advice to individuals and couples who are worried about protecting their wealth is to consult an elder care attorney who deals with this every day. 

My second piece of advice is to take a look into short-term care plans as an alternative to long term care insurance with a reputable Medicare insurance agent.  If you don’t have one of your own, I’m here to help.