Richard Ybarra Signing Off: I just wanted to say farewell to all of you. It has been both an honor and a pleasure to have managed the Web presence for PSM over the past two years. I enjoyed writing this blog each week and watching its readership greatly expand. Your comments have always been interesting to read, and I encourage you to continue to participate. I wish all of you great success in your endeavors. Here is the first blog post from my successor Lauren Hidalgo:
Campaign Fear Themes: Medicare vs. Social Security
Democrats and Republicans have begun the battle for votes from older voters who consistently turn out for midterm elections. Republicans say Democrats will cut Medicare by $500 billion and Democrats say Republicans plan to cut Social Security. Thus, forcing voters to choose between either potentially losing their health care or losing their financial support. Each party denies the allegations yet continues to invest millions of dollars into advertisements, hoping to sway voters with fear tactics. In the 2006 election 30% of voters were 60 and over and that number continues to grow. Therefore, their loyalties will continue to be pursued.
New Required Checks for Medicare
A new anti-fraud law, proposed Monday, will require Medicare to verify claims first, acting more like a credit card company and flagging suspicious bills. This proposed law could limit wasteful government health care spending and save taxpayers billions of dollars a year. Sen. George LeMieux, a Republican from Florida, sponsored the bill because he is tired of seeing unnecessary, or false, service charges and then having to chase the culprit to recoup a fraction of the money lost. He estimates the cost to implement the technology for this program, which would process claims for both hospitalization and outpatient services, would cost $930 million over the next decade but the anticipated savings would far exceed the expense.
New Center for Medicare and Medicaid Innovation Chief
On Monday, Dr. Richard Gilfillan's appointment as acting director of the Center for Medicare and Medicaid Innovation became public. He has experience as the former president and chief executive officer of Geisinger Health System; as well as, executive vice president of insurance operations for Geisinger Health System, which is a based in Pennsylvania integrated health system that is often a model of how be cost effective in Medicare. During the 2008 election, Gilfillan contributed the maximum allowed $2,300 to President Obama's campaign.
Examining Health Reform's Effect on Medicare Advantage
On Monday, four Senate Republicans asked the top Medicare accountant to release the results of his analysis of health reform's impending effect; as well as, a breakdown of the impact based on "rural versus urban areas" and "an estimate of how much less [MA] plans will be able to spend per member per month on reduced cost-sharing and extra benefits" on the Medicare Advantage program. They fear the new cuts to Medicare Advantage may cause some plans to fold while still others will be forced to drop benefits in order to stay profitable. This comes just a week after Obama released estimates that Medicare Advantage is projected to jump 5% next year and average premiums will fall by 1%. The Republicans have requested the information be released by October 8, 2010.
Sources: The Hill, NPR, CMS, KHN, The Miami Herald
Medicare Blog | Medicare News | Medicare Information
As of Thursday, insurers are no longer able to impose annual limits or lifetime caps on benefits, and they will face a higher standard before they can drop anyone’s coverage. Children will be guaranteed access to insurance no matter what their health condition. Additionally, parents can keep their adult children on their plans up to age 26. Also, insurers can’t charge copays or deductibles for preventive services like breast cancer screening and cholesterol tests. And the last notable change is that insurance companies can’t require you to make additional payments if you visit an emergency room that’s out-of-network for a medical emergency. Of course there are caveats to the aforementioned. To read a more comprehensive breakdown of the recent changes, click here.
Obama Gives $130 Million to Shore Up Healthcare Workforce
Last Friday the Department of Health and Human Services (HHS) allocated $130.8 million to shore up America’s healthcare workforce. The funds will be distributed to six key areas, including oral health workforce training ($23.9 million), primary care workforce training ($42.1 million), health career opportunity programs for disadvantaged students ($2.1 million), patient navigator outreach ($3.8 million), equipment to enhance training across the health professions ($50.5 million), and chronic disease prevention in health disparity populations ($8.3 million).
House Bans Bad Executives from Medicare
On Wednesday, the House of Representatives passed a bill that provides HHS with the authority to ban corporate executives whose companies (past and present) were convicted of fraud. The bill was sparked by the case of Rick Scott, a Republican candidate for Florida governor, who continued to work in the Medicare industry despite the fact that a previous company he helmed pleaded guilty of massive Medicare fraud. The bill now moves to the Senate where it is expected to be made law.
Medicare Advantage Rates Fall, Membership Rises
On Tuesday the Centers for Medicare & Medicaid Services (CMS) announced that Medicare Advantage plans will see an average price decrease of one percent in 2011 and that membership will grow by five percent. Last year, Medicare Advantage rates rose 15%. CMS representatives said that seniors should find little to no changes in their benefits in 2011. The cost decrease this year is attributed to the new Affordable Care Act that empowered CMS to better negotiate with health plan providers. CMS also is encouraging seniors to begin reviewing their options as open enrollment starts November 15. You and your clients may be interested in CMS’ official online Open Enrollment Center that can be accessed here
Sources: The Hill, NPR, CMS, KHN
On Thursday, the Census Bureau reported that 50.7 million Americans had no health insurance last year. Never before have so many Americans gone without health insurance since tracking began in 1987. The Midwest and South experienced the largest increases in uninsured. According to KHN both Democrats and Republicans are starting to use the report as fodder for their rhetoric. Democrats are saying the report is evidence of the need for the health care reform law passed this year, while Republicans will say that the report is proof that Democrats are failing to improve the economy.
The report also stated that roughly a third of Americans (estimated at 93 million) are now covered by government insurance, such as Medicare and Medicaid. In addition to insured data, the report also revealed that 43.6 million people lived in poverty in 2009, marking three straight years of an increase in poverty among Americans. Jonathan Oberlander, a professor of social medicine and health policy at the University of North Carolina – Chapel Hill described the report as “devastating.”
Health Care Reform Law FAQ Released
KHN released a very informative FAQ (frequently asked questions) guide for consumers explaining several key provision of the health care law that have taken shape over the past six months. One question is dedicated to Medicare, asking if benefits will change. The answer explains that Medicare benefits will expand, while Medicare Advantage plans will lose some extra benefits. It also states that next year beneficiaries will receive a 50% discount on brand name drugs and a 7% discount on generic drugs while in the doughnut hole. Also, beneficiaries won’t have to pay co-payments or deductibles on many preventative care services. To read the full FAQ, click here.
Medicare Saves $33 Billion through Generic Drugs
According to a Congressional Budget Office report, generic drugs saved both the government and beneficiaries roughly $33 billion in 2007. Businessweek reports the trade group Pharmaceutical Care Management Association expects an additional $14 billion in savings over the next few years due to new generics entering the market through 2012.
Medicare and FDA Testing Concurrent Product Reviews
For years companies and Medicare beneficiaries have complained about the time it takes for products to come to market. Not only does a new product have to go through the Food and Drug Administration (FDA), but it must then also go through the Centers for Medicare and Medicaid Services (CMS). Now the both organizations are starting a pilot project that would see new product reviews take place concurrently by both organizations. This new process is expected to significantly reduce the lag to market and provide much faster access to the latest medical technology.
Jobless Straining Social Security
Yet another government life line is in danger. Though it has long predicted that Social Security would go bankrupt at some point in the future, the Great Recession has accelerated that pace. According to a Washington Post article, the Congressional Budget Office projects that the Social Security Disability Insurance Trust Fund will be exhausted by 2018. According to the article, applications to the program increased 21% in one year alone to 2.8 million.
Social Security officials cite the high unemployment rate as the main reason for the sudden spike in applications and enrollments. One official stated that many of the applicants are older workers who got laid off and can’t find a job. They are too far away from being eligible from the retirement fund, so they do all they can to get on disability. The average age of new recipients is 49, with less than 1% returning to work.
Lawmakers may decide to transfer money from the retirement fund to extend the life of the disability fund, but this decision won’t be an easy one as baby boomers are going to swell the number on the retirement fund. The retirement fund is going to need every penny to handle the influx of retirees, so it will be interesting to see how Social Security resources will be distributed.
Medicare Advantage Quality Ratings Study Released
The Henry J. Kaiser Family Foundation released a new report entitled “Quality Ratings of Medicare Advantage Plans.” The report explains how quality ratings for Medicare Advantage plans are currently calculate, the effects of key changes in the 2010 health care reform law, the share of enrollees in high and low star plans, and more. If you are selling Medicare Advantage, it makes for a good read. Get it here.
Sources: AP, Businessweek, KHN, Reuters, Washington Post
Kaiser Health News in collaboration with The Washington Post published a very interesting article focusing on how more and more Medicare beneficiaries are finding they are not being classified as “admitted - inpatient” when staying at a hospital. Instead, they are being classified as “under observation.” Though the level of care doesn’t vary between either classification, the latter means Medicare beneficiaries will have to pay significantly more out-of-pocket for their total care.
One example given in the article is about Ed Timmins (88) who spent four days in the hospital for extreme back pain and other issues. The whole time he was never admitted, so Medicare isn’t going to cover his $23,864 nursing home bill. The hospital where he received treatment would not discuss his case, but implied that he did not meet Medicare’s “medical necessity” requirement to be in an inpatient status.
According to the Centers for Medicare and Medicaid Services, claims from hospitals for observation care have increased over the last several years. Observation care claims rose from 828,000 in 2006 to more than 1.1 million in 2009. Additionally, observation care claims regarding stays more than two days tripled to 83,183. The article states several reasons for the increase, but focuses on the fact that Medicare is being more aggressive in their audits in order to reduce costs. Click here to read the full article. Also, you may want to forward this useful link to your clients that explains what to do if they are classified as “under observation.”
Selling More with Jeffrey Gitomer
This month’s issue of InsuranceNewsNet has an in-depth interview with Jeffrey Gitomer who wrote The Sales Bible. Here is a list what he believes insurance agents should and should not do to increase their sales.
Google Implements New “Instant” Feature
Since many of you are beginning to utilize search engine optimization as a method of attracting more customers to your business, you will want to know that on Wednesday, Google implemented a new feature they call “Google Instant.” This feature automatically attempts to complete your search terms as you type them. As you are typing Google starts to stream results. These results change dynamically as you further refine your search term. Google says this new feature will reduce search times by two to five seconds. The change will also have a significant impact on SEO strategy. Now you will want to start optimizing for search terms that Google automatically generates. Also, this feature appears to only be available on the most recent browsers, so if you are still using older browsers such as IE 6 or 7, you’ll need to upgrade to use this new feature.
Sources: KHN, Washington Post, InsuranceNewsNet, ComputerWorld
Reminder: This week you have no doubt heard of the new Forethought Medicare Supplement, of which we are an exclusive distributor. To read more about the product, click here.
Avalere Health, a well respected research firm in the medical industry, published a study that estimates over 3 million Medicare beneficiaries will have their current drug plan terminated. This will most likely create an unpleasant inconvenience for these seniors who will see unexpected changes in their premiums and copayments according to the analysis.
The reason for the termination of certain drug plans stems from the Center of Medicare and Medicaid Services’ (CMS) decision to reduce perplexing and identical coverage. By doing this, CMS hopes this will provide seniors with more significant options, while still offering a good selection of about 30 plans or so in each state (down from 40). It should be noted that the change by CMS does contradict President Obama’s promise that people happy with their current health plans can keep them.
Deputy Administrator for Medicare, Jonathan Blum, spoke out against the study saying such studies would be based on guesswork and lead to highly inaccurate results. Insurance industry representatives remain mum on the issue. Consumer advocate groups are praising the changes, as such groups have long held that there are too options right now. According to AP, this year there are nearly 1,600 plans offering a numerous array of options, many of which are identical. As insurance agents, what do you think? Will the simplification of drug plan options make your lives and the lives of your clients easier, or will it reduce your opportunities?
Medicare Expands Smoker Counseling Coverage
On Wednesday, the Department of Health and Human Services (HHS) expanded coverage for smoker counseling. Now, any smoker on Medicare can receive counseling to stop smoking from an authorized professional. Before, Medicare only covered such counseling for those beneficiaries who were diagnosed with or showed symptoms of tobacco-caused disease. By expanding such coverage, HHS hopes to reduce the burden tobacco-related diseases place on the Medicare system. According to Seniorjournal.com, it is estimated that between 1995 and 2015, tobacco-related diseases will cost Medicare about $800 billion.
AARP Study Says Popular Drug Prices Soared in 2009
AARP released a report titled The AARP Rx Price Watch Report that found retail prices of prescription drugs soared, rising more than eight percent in 2009. According to the study, 211 of 217 brand name prescription drugs increased in price, significantly exceeding general inflation last year. All top 25 selling brand name drugs saw price increases. The largest increase was Flomax, which increased 24.8%. Furthermore, the study found brand name manufacturers Boehringer Ingelheim and BTA Pharmaceuticals had average price increases of more than 15%. To read the report in its entirety, click here.
Sources: AP, Seniorjournal.com
On August 23, 2010 Forethought Financial Group announced its new Medicare supplement product will be available this fall in eleven states, including Illinois, Iowa, Indiana, Louisiana, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, and Virginia. The Forethought Medicare Supplement (Medigap) comes at a very good time when millions of baby boomers are now turning 65 and becoming eligible for Medicare. These newly minted seniors will be seeking Medicare supplement products from companies such as Forethought that offer competitive premiums, an excellent financial strength rating, and highly regarded customer service. The Forethought Medigap offers all of the aforementioned and more.
Precision Senior Marketing (PSM), a full-service, national insurance marketing organization, is an exclusive distributor of the Forethought Medicare supplement, and is currently offering direct contracts to independent senior insurance agents who wish to add the Forethought Medigap product to their portfolios. PSM experienced tremendous success last year with the release of several new Medicare supplement products. Exploding demand for these Medigap products exceeded the expectations of the carriers, requiring them to hire additional staff. PSM expects the same level of demand and success for the release of the Forethought Medicare supplement.
In addition to offering a new Medicare supplement product, Forethought is also offering a new final expense. The two new products will be a part of a “combo-app” process whereby agents can sign up consumers for both products in one application. This combo-app will simplify and speed-up the application process for independent senior insurance agents. The new Forethought final expense product offers superior features compared to competing final expense products, and even Forethought’s older final expense product. For more information about either product, agents are encouraged to contact Precision Senior Marketing at 1-800-998-7715 or at firstname.lastname@example.org.
Forethought Financial Group has serviced more than 2 million policyholders since its humble beginnings in 1985. Forethought’s financial strength stems from the fact that it has over $4 billion in assets, more than $5.6 billion of life insurance and annuity business in force, and nearly $1 billion in annual revenue. Unlike many other companies during this Great Recession, Forethought continues to grow and prosper. And though the Forethought Medicare supplement is released in ten states initially, the company expects to expand its offering to other states, as the company is licensed to sell in 49 states, the District of Columbia, and Puerto Rico.
On Wednesday, the Centers for Medicare and Medicaid Services (CMS) announced that Medicare prescription premiums will increase by a small amount next year, and that benefits will improve as well. More specifically, the average monthly premium for standard coverage will rise to $30 in 2011. This represents an increase of $1 over 2010, or a 3% increase, according to Don Berwick the Medicare administrator. The estimate is based on the assumption that seniors will enroll in lower cost plans. Those seniors who stay in their current plans and don’t look for cheaper plans will see a higher average premium of around $32.34 a month, according to Paul Spitalnic, a representative of Medicare’s costs estimates office.
Starting next year Medicare beneficiaries who experience the doughnut hole will get a 50% discount on brand name drugs and 7% off generics. These discounts will continue to increase until there is no gap which is expected to occur in 2020. As you may know, Medicare drug plans vary dramatically in terms of cost and coverage, so we recommend that you check your clients’ plans and inform them of the changes to avoid unpleasant phone calls from surprised individuals.
HP Gets $200 Million Medicare Contract
Medicare has awarded HP Enterprise Services with a $200 million contract to improve claims processing and also the delivery of health care services for Medicare Part B coverage. The contract has a one-year base period, plus seven one-year renewal options.
Medicare Scam Deflated
In a bit of comical news, two men in South Florida running two companies called Charlie Rx and Happy Trips submitted $63,000 in bills to Medicare for male vacuum erection systems (a.k.a. “penis pumps") and collected over $28,000 in Medicare payments. The government also found the two companies billed Medicare for nearly $2 million overall for other medical equipment, receiving a total of $735,000. As usual, the criminals’ arrogance, laziness, and/or stupidity are what led to their capture. Authorities realized something wasn’t right when they received a claim for four male vacuum erection systems for a single female patient.
Third Round of Doughnut Hole Checks Mailed
Last week, a third round of $250 rebate checks was mailed to eligible Medicare beneficiaries who fell into the Medicare Part D doughnut hole. Before this third round was sent out, CMS says that more than 750,000 have already received their checks. Secretary of Health and Human Services Kathleen Sebelius stated that these checks continue to demonstrate the benefits of the Affordable Care Act. This may also be a good time to remind your seniors that they will receive these checks automatically when they reach the doughnut hole. Anyone calling or any website requesting information to receive the checks is a scam.
Sources: AP, BusinessWeek, Senior Journal, CNN
This year Social Security will pay more in benefits than it receives in payroll taxes. We all knew the day was coming, and that day will happen sometime this year and throughout next year according to an announcement by Social Security officials, including Treasury Secretary Tim Geithner, on Thursday. This is the first time in 30 years Social Security will pay out more than it collects, but it surely will become more common place in the near future. According to the same officials, Social Security will be in the red for the foreseeable future beginning in 2015.
Several factors contributed to this year’s dip into the red. First and foremost is our currently high 9.5% unemployment rate. Basically, there are a lot fewer employees paying into the system. Then combine this with 50% of baby boomers taking their Social Security benefits at 62, rather than the full retirement age of 66, and you have a deadly tonic for the Social Security system.
Is this a major cause for concern? Yes and no depending on how you look at it. This isn’t the first time Social Security has been in the red. When America experienced stagflation, Social Security was in the red from 1970 to 1983. Social Security recovered and has been fine until now. So this may very well be a bump in the road. However, as baby boomers continue to inflate the number of Social Security beneficiaries, and with a painfully slow recovery, the future outlook doesn’t look too rosy. Either way, Social Security officials project the system will be exhausted in 2037.
Medicare: Extending its Lease on Life
The same officials that made the Social Security announcement also stated that the new health care law (PP&AC Act) will extend the life of the Medicare Trust Fund 12 more years to 2029 from 2017. Of course this announcement has caused much debate. One doubter is the Medicare program’s independent actuary who said the extra 12 years projection isn’t based on “reasonable” expectations, according to the Wall Street Journal.
One of the unreasonable expectations is Medicare officials’ belief that since employers will save money on health insurance due to the new health reform law, they will transfer those savings to paying higher wages. These higher wages mean more tax collected to pay for Social Security and Medicare. Do you think this expectation is reasonable? Let us know in the comments below.
Medicare Advantage Outlook Not as Dire?
KHN has a good article that explains the consequences of Medicare Advantage cuts by the government may not be the universal doom and gloom that many news outlets are reporting. Check it out here.
Sources: CNN, Wall Street Journal, KHN, The Washington Post
The Wall Street Journal reported on a story involving a 44-year old uninsured diabetic, Mark Baumann, and his mother Mary Baumann. According to the report Humana plans to reduce Mary’s Medicare Advantage plan to compensate for smaller government payments under the PP & AC Act, which stipulates that 15% of the new health care law will be funded by Medicare payment cuts beginning in 2012. The report cites the Congressional Budget Office in stating that Medicare Advantage enrollees will get $68 less a month in benefits by 2019.
The reduced Medicare Advantage plans for Mary and other seniors will result in either higher costs or less benefits. The report also states that dozens of private insurers that offer Medicare Advantage plans are now preparing to reduce dental, vision, and certain prescription-drug coverage beginning next year. Interestingly, the report states that by 2035, if both Medicare and Social Security see no changes, they will comprise 50% of all federal spending. The report goes on to discuss the larger issue of how this represents a shift of how the government applies our social safety net to cover younger people. What do you think of this? Let the PSM community know in the comments below (view the full article here).
Seniors Know Very Little About New Health Care Law
Several news outlets are reporting on a new poll that shows just how little seniors know about the new health law. Politicians, especially Democrats, are concerned since seniors represent a large voting bloc, especially in mid-term elections. The poll, conducted by the National Council on Aging, showed that only 17% of seniors knew the correct answers to more than half of the questions, and only 9% correctly answered two-thirds of the questions.
CMS Issues Final Rule Tying Renal Services to Performance
MordernHealthcare.com reports that the Centers for Medicare and Medicaid Services (CMS) proposed a new rule to tie Medicare payment for end-stage renal disease services with performance on quality measures. Two of these measures include anemia management and hemodialysis adequacy. Providers who don’t meet these standards will have their payments reduced up to 2% beginning January 2012. CMS also issued a final rule regarding a new ESRD payment system that includes adjustments for home dialysis training when clinically appropriate.
Happy Anniversary Medicare!
Yesterday marked 45 years of Medicare.
On Thursday, President Obama signed a bill that mandates federal departments and agencies to reduce misspending. In fiscal year 2009, the federal government doled out nearly $110 billion in improper payments, mostly due to Medicare and Medicaid fraud. The Improper Payments Elimination and Recovery Act also stipulates agencies to invest at least $1 million in audits to identify likely overpayments, and to create processes to reduce such improper payments and establish penalties for government organizations that fail to comply with the new law.
Denials of Insurance Claims Easier to Fight
The Obama administration issued new rules regarding health care reform. The new rules guarantee the right for all Americans to appeal denials of insurance claims, first with their insurance company, and then to a third-party review board if required. Many states already have similar laws in place, however the rules differ greatly. Now the rules will be standard across the United States. The new rules aim to empower consumers when appealing insurance claims that are denied. America’s Health Insurance Plans (AHIP) spokesman Robert Zirkelbach said that his organization supports the standardization of the appeals process. The Obama administration is also providing $30 million in grants to improve state consumer assistance offices. States have until July 2011 to comply.
$251 Million Medicare Fraud Ring in 5 Cities Busted
Last Friday, Federal law enforcement officials announced the arrests of dozens of suspects in five states for defrauding Medicare of $251 million. The suspects, including several doctors and nurses, were apprehended in Miami, New York, Detroit, Houston, and Baton Rouge. 94 suspects were indicted, with 36 being arrested for billing Medicare for unnecessary equipment, and H.I.V and physical therapy treatments that were never conducted. The New York Times reported that violent criminals and mobster were getting into the action, as they viewed Medicare fraud as more lucrative and less risky than dealing drugs and fire arms.
Part D Increases Use of Heart Failure Medication
Reuters reported on a recent study of 7,000 older heart failure patients in one large insurance plan released by the American Heart Journal. The study found that the number of filled prescriptions for heart failure drugs soared after Part D took effect in 2006. Low-income seniors who never had previous drug coverage saw the biggest increase in filled prescriptions. Reuters states that the findings, among other cited in the article, substantiate arguments the goal of the law is being met.