Senior Insurance Blog

A The Henry J. Kaiser Family Foundation released a report that provides an analysis of Medicare Advantage enrollment trends among HMOs, PPOs, and PFFS plans.  The report highlights that 11.1 million people were enrolled in private Medicare Advantage plans as of March 2010.  This is an increase from 10.5 million in March 2009.  The report showed that this increase took place despite a reduction of available plans throughout that same period. 

The report also found that three or fewer insurance companies dominate the Medicare Advantage market in every state except New York.  In 14 states, one company enrolls more than half of all Medicare Advantage customers.  Nationwide, both UnitedHealth Group and Humana Inc. control 33% of the total Medicare Advantage enrollment nationwide. 

For the full report follow this link: http://kff.org/medicare/upload/8080.pdf

Medicare Doc Pay Cuts Expected to be Delayed Today

Last night, the House of Representatives voted 417-1 to approve a Senate bill that delays a 21% cut in Medicare payments to doctors.  The bill delays the cuts another six months.  Lawmakers will work on a more permanent solution in that time, but if history is any indication, a permanent solution isn’t coming anytime soon.  Obama has expressed his approval of the bill and is planning to sign it into law today. 

The Medicare doc pay cut delay was a part of a larger bill that included unemployment benefit extensions and more aid to states.  When that bill was filibustered by Republicans, Democrats separated the Medicare doc pay cut delay into its own bill.  Now the hope is that the much more expensive, permanent solution can be passed after congressional elections in November.  The bill being signed today will increase payments to providers by 2.2% and will be paid for with a series of health care and pension changes.

Medicare and Medicaid Implements New Fraud Mapping Tool

The Centers for Medicare & Medicaid Services (CMS) implemented a new fraud mapping tool that will eventually be used throughout all government agencies.  The fraud mapping tool was developed by the Recovery Accountability and Transparency Board to collect massive amounts of information in real time, analyze the data for fraud trends, and then project possible fraud or errors using an array of indicators.  This new tool comes on top of the “Do Not Pay” list created last week.  Both methods aim to achieve President Obama’s goal of cutting improper Medicare payments in half by 2012.

Sentinel Life Medicare Supplement Plan N Approved in CA, IA, and LA

Sentinel Life Medicare Supplement Plan N has been approved for Louisiana, Iowa, and California.  Each of these plans offer competitive rates and generous commissions.  To learn more about these products click here.

Sources: AP, NPR, KFF, KHN

In another sign that Medicare Advantage is falling by the wayside, yesterday CIGNA announced it will not offer CIGNA Medicare Access (PFFS), its individual private fee-for-service medical plan, in 2011.  Customers of these plans will experience no change for this year.  CIGNA will continue to serve its clients, brokers, health care professionals, and contractors into 2011 for 2010 claims.  Now that CIGNA PFFS customers will need to choose a new medical coverage option for 2011, this presents a great opportunity to promote Medicare supplements to them, especially Medicare Supplement Plan N.

Medicare Checks Sent Out to Seniors
As posted on our Twitter feed earlier this week, the Obama administration started sending out $250 checks to seniors who fall into the Medicare prescription drug doughnut hole.  With elections looming on the horizon, Democrats are touting the checks as the first of many benefits to come from health care reform legislation signed into law earlier this year (PP&AC Act).   In some states, Democrats are buying air time to broadcast a 60-second television ad stating how Republicans promised to repeal the healthcare reform bill.  Democrats also sent boxes of “GOP Doughnut Holes” to various media outlets as a sign that the doughnut hole rebate benefit would not exist under GOP leadership.  Of course, as you may already know, in most cases, the $250 is only about 1/14 of the total $3,610 hole. 

Infection Control a Major Issue at Medicare ASCs
Earlier this week, the Journal of the American Medical Association published a new study from the Centers for Disease Control and Prevention (CDC) and the Centers for Medicare and Medicaid Services (CMS), that found 2/3 of ambulatory surgical centers (ASCs) in three states experienced infection control lapses.  CMS defines ACSs as facilities that operate exclusively to provide surgical services to patients who do not require hospitalization or stays in a surgical facility longer than 24 hours.  Roughly 70 ASCs that experienced the infection control lapses serve Medicare patients.  The lapses were typically found in process including hand washing, injection and medication safety, and equipment reprocessing.  To view a video overview of the report click here.

AMA Unleashes its Wrath on Congress for Neglecting Medicare
Due to a glitch with our e-mail system last week, many of you missed last week’s article.  To view that article, click here.

Reminder: Modernized Plan Approvals Info
We just wanted to provide you with a friendly reminder that we offer three methods for checking out the latest modernized plan approvals.   First, we post updates immediately to our Twitter feed, second we post the update to our approval chart, and third if a carrier’s plan is new to the state, we’ll add it to our product availability map.  When it comes to modernized plan info, at PSM we’ve got you covered.

Sources: Reuters, Politico, CNN, JAMA, NPR

Starting in the fall of 2011, the Annual Election Period (AEP) will take place beginning October 15 and run through December 7.  This is a change from the current schedule of November 15 to December 31.  

Then on January 1, 2011, the Open Enrollment Period (OEP) will be eliminated.  As many of you already know, this period allowed beneficiaries to switch between “like” plans from January 1 to March 31 each year.

Also in 2011, the first Baby Boomers start to age into Medicare. There are 45 million Medicare eligibles in the country today, and by 2020 that number will grow to over 60 million. If you have any questions regarding these changes, please call us at 1-800-998-7715 or e-mail to info@psmbrokerage.com.

Source: Bravo Health

According to Mark Farrah Associates, a healthcare data aggregator and publisher, the number of newer policies issued over the last three years increased by 1.25% in 2009 when compared to the 2008 base. MFA reports that this continued growth of the Med Supp market is an encouraging sign for Medigap-based organizations looking to capitalize on the new modernized plans taking effect June 1, 2010.

The MFA article also provides other updated Med Supp information from 2009, such as breakdowns of Plan popularity (Plan F still rules), number of carries and plans, premium and claim amount comparisons, and overall carrier market share. Click here to view the article in its entirety.

Many Seniors not in the Best Medicare Advantage Plans

A study released by Avalere Health, a major consulting firm, reports that 47% of seniors on Medicare are in MA plans that rate three or two stars on Medicare’s quality rating scale. Three stars equal medium quality, and two stars equal fair quality. Also, only 23% of seniors on Medicare were enrolled in four to five star rated plans. According to Avalere, these quality ratings will become much more important due to the new health care law passed, as Medicare payments will now be tied to quality. More specifically, beginning in 2012, the new health care law mandates Medicare to award bonuses to four star or better plans. Click here for the full article.

Independent Payment Advisory Board (IPAB) to Cap Medicare Spending

James Capretta of the Ethics and Public Policy Center says “Medicare spending is now officially capped.” He points out that the IPAB, a 15-member independent panel appointed by the president and confirmed by the Senate, is responsible for enforcing an upper limit on annual Medicare spending growth. Mr. Capretta goes on to give a good, thought-provoking assessment of the impact the IPAB will have on the Medicare market.

He is generally against using payment cuts as a way of addressing Medicare’s rising costs stating “Certainly, more of the same payment rate reductions will not do it. Medicare’s chief actuary has already said that the payment cuts in the health reform law are unsustainable because they don’t change the cost structure for those providing care. In a very real sense, seniors will be the ones holding the bag from these cuts when they can’t access care due to a lack of willing suppliers.” Read the full article here.

Various news outlets, such as Kaiser, Bloomberg, U.S. News, and others are reporting Medicare Advantage plan payments to private health insurers will be frozen at 2010 rates throughout all of 2011. This is one of the results from the new health care laws signed by President Obama last month.

For those of you unfamiliar with the situation, you should know that the new health care laws mandate $130 billion in cuts over the next decade to Medicare Advantage.  Politicians who voted for the cuts often defend their decisions by citing a report from Congress' Medicare Payment Advisory Commission that found the government compensated insurers 14% more that it spends on its own to cover people in traditional Medicare.

Since next year's payments will not match ever rising health care costs, many experts expect insurance companies to offset the loss of payment increases by raising premiums on customers.  The freezing of the pay rate is actually better than what many insurance analysts expected - a 4% rate cut. 

In other Medicare Advantage news, CMS also recently announced that it issued a final regulation requiring the elimination of duplication among MA drug and health plans.  This means MA and prescription drug plan sponsors must have significant differences between their products with regard to plan types, client out-of-pocket costs, premiums, and formulary offerings.  The goal of this regulation is to enhance protection from discriminatory cost sharing and the ability to compare plans in 2011.   It is also consistent with the new PP&AC Act that requires Medicare Advantage to no longer impose more expensive cost-sharing requirements than those charged for traditional Medicare. 

Along with the aforementioned changes the PP&AC Act does allow for bonus payments to be made to insurers who offer high-quality Medicare Advantage plans.  The criteria for what the government considers a high quality MA plan wasn't explained in any of the sources I researched, so I'll report it here once the information comes available.  How the high-quality designation will affect the market is unknown at this time.

One other important requirement is that starting in 2014, Medicare Advantage plans will have to spend 85% of health insurance premiums collected by insurers on providing health care to their customers.  Whether this will reduce what the government sees as exorbitant executive compensation at insurance companies, or just end up raising costs to agents and consumers remains to be seen.

Sources: BusinessWeek, U.S. News, Kaiser

Over the next few weeks, we will be receiving rate information for Medicare Supplement Plans M and N from our carriers.  Of the two new plans, Plan N is shaping up to be one of the most attractive and popular insurance products on the market.

As many of you know, one of the biggest reasons seniors don’t or can’t get a Medicare Supplement is due to cost.  Plan N has been designed to be a cost-effective solution that competes directly with Medicare Advantage plans.  We believe many cost-conscious seniors will gravitate towards Plan N, as it offers the stability and standardization of a Medicare Supplement at a price point that is 25%-35% cheaper than the comprehensive and popular Plan F.  Thus, Plan N is a perfect alternative to Medicare Advantage because it allows you to increase your customer base and further elevate your income stream.  This incredible combination of lower price and higher accessibility is going to make Plan N the choice for most seniors in 2010, especially those who are healthy and don’t often need medical care.

The primary reason why Plan N is more affordable is because it requires clients to share the cost of their treatment, much like a Medicare Advantage plan.  Unlike a Med Advantage plan however, Plan N has no network restrictions and much lower out-of-pocket liabilities to the client.  Plan N is different from what is traditionally expected from a Medicare Supplement plan, these new benefit changes now make Medicare Supplements much more accessible to lower income seniors and more attractive to those who are healthy and wouldn’t otherwise see the need for one.

Though Plan F is currently the most popular Med Supp plan because it offers the most comprehensive coverage for the money, we think Plan N represents the future of Medicare.  Medicare can’t continue to shoulder the entire cost burden of rising medical costs and a huge boom in the senior population over the next decade.  If there is still going to be a Medicare in the future, CMS is most likely going to structure future plans so that seniors are going to have to share in financing their healthcare.

To obtain the new Modernized plans for your state with the addition on Plans M & N, Click Here

It’s that time of year again, but this time many of you who sell Mutual of Omaha Medicare supplements will see that rate increases are significantly higher than usual. Click the links below to view the new rates for your state(s).

Mutual of Omaha Companies Med Supp Rate Increase Info is for the following states (April 2010):

AL, AR, AZ, CT, IL, KY, MI, ND, OH, OR, SC, SD, and TN

View Rates

Ohio (April 1, 2010):

View Rates

Missouri (April 1, 2010):

View Rates

WellPoint Announces Rate Increases Between 25% - 39% in California

And if you think these are high, they aren’t as bad as those found in the under 65 market. This past week, WellPoint CEO Angela Braly addressed a U.S. House subcommittee regarding insurance rate increases of 25% to 39% announced by her company’s Anthem Blue Cross of California.

The company line is that these rate increases reflect increases in medical costs, as well as the trend of many young and healthy policyholders dropping or reducing coverage during this great recession.

Committee Democrats argued that Anthem e-mails demonstrate that the company seeks to increase its profit margin and to reduce coverage. The politicians pointed out that in 2008, WellPoint paid $115 million to 85 senior executives, and compensated 39 executives more than $1 million each. The company also spent over $27 million on 103 executive retreats.

According to a report released Thursday by the Community Oncology Alliance and Avalere Health, Medicare currently only pays 56% of chemotherapy expenses and will further decline by 20% down to 45% in 2013. The report states that the average oncology practice currently loses $500,000 a year and many are being forced to pass on some or all of their losses onto patients with private insurance.

The Reuters article from which this post is sourced, interviewed Dr. Shannon Penland of Jefferson Medical Associates in Laurel. Mississippi. Dr. Penland explained that the more business she took in, the more money was lost. In just eight months since starting she amassed a $300,000 debt. She later went on to state that treating cancer is threatening the entire practice, and that she is considering leaving cancer care and going into internal medicine.

The report concludes that many cancer centers are losing money on patients and predict many will be forced out of business. The report also identified that patients in rural areas are the most likely to see their cancer treatment centers closed first. One other thing to note about the report is that it mentions that the cuts to Medicare will threaten other specialties in the medical field as well.

Special Notice: Big changes are coming to psmbrokerage.com. Over the next few days we will be making changes to our site. This will not affect functionality of our site, however you may see some visual inconsistencies during the process. The changes we are making aim to improve site navigation, provided added content, and refresh the overall look of the site.

The big news of the week was not so much the passing of the Senate Finance Committee bill as was expect, but rather it was the single Republican vote of support by Maine Senator Olympia Snowe. Snowe stated that the bill is not perfect, but does represent the best balance of what has been proposed thus far. She further commented that the threat of maintaining the status quo is too great to Americans. More liberal Democrats also chimed in stating that the bill was far from their ideal, but supported it with the hope that it could be reshaped later.

President Obama described the passage as a “critical milestone” towards achieving health care reform, as the event advances current health care legislation further than any other attempt over the past several decades.

Now the Finance bill will most likely go through a process of merging with a bill passed earlier by the Health, Education, Labor, and Pensions Committee. The big point of contention will be whether a merged bill will include a public option. The Finance Committee bill doesn’t include it, while the latter does. This process will not be a walk in the park if the merging of legislation approved by three House of Representatives Committees is any indication. The details of a merged House bill are currently the source of much frustration and struggle in the House.

As health care reform progresses, insurance companies and industry representatives are ratcheting up their opposition to much of the legislation currently under consideration. AHIP this week released a PricewaterhouseCoopers Report on the Impact of Reform Proposals on Costs that essentially states that the Finance Committee bill will raise premiums significantly for most people who already have insurance. The report can be read here. The report is currently being criticized for only analyzing four provisions of the bill. Additionally, AHIP is running TV ads in six states criticizing current legislation for making more than $100 billion in cuts to Medicare Advantage and reducing benefits to seniors.

Weekly Recap:

Internet Use Decreases Senior Depression: The Phoenix Center, a non-profit research group, released a report today that shows seniors who use the Internet can reduce their depression by 20%. The report further states that reducing depression can lead to decreased health care costs for both seniors and the industry in general. The report explains that the Internet facilitates increasing communications with family, friends, and society at large especially for seniors who have mobility difficulties. For the full report, click here.

No 2010 COLA Increase Official: On Thursday, the Social Security Administration officially stated that there will be no automatic Cost Of Living Adjustment. The SSA explains that due to the recession there was no inflation this year, thus no need for a COLA increase. To offset this, President Obama on Wednesday announced a $250 Economic Recovery Payment to seniors, veterans, and disabled people who have not recovered from their losses from the recession. The payments are expected to go out to more than 50 million people. For more information click here.

H1N1 Flu Information for Seniors: CMS now has a Web site with information specifically for people on Medicare and Medicaid. Click here to visit the site.

Standard Prescription Drug Benefit for 2010 Info: The Center for Medicare Advocacy, Inc. has a great comparison chart showing info regarding Part D standard benefits Info. For more information on the subject, click here.

Sources: Associated Press, CMS, SSA, CMA, The Phoenix Center