Category Archives: Medicare Part B

Which to Choose: Medicare or Medicare Advantage?

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It’s open enrollment season again. From now through Dec. 7, about 65 million Americans are facing the annual question of which Medicare options will give them the best health coverage. An onslaught of television and radio ads, emailed promotions, texts and mailers serve as reminders, though not necessarily clarifying ones.

“It’s a very consequential decision, and the most important thing is to be informed,” said Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation and a co-author of a recent literature review comparing Medicare Advantage and traditional Medicare.

If you are navigating this decision for yourself or for a loved one, here are some of the important factors to consider.

Why the marketing barrage?

Medicare — the federally funded health care program — has been in place since 1965. Since then, an expanding array of Medicare Advantage plans have become available. For 2023, the typical beneficiary can choose from 43 Advantage plans, the Kaiser Family Foundation has reported.

Medicare Advantage plans, like traditional Medicare, are funded by the federal government, but they are offered though private insurance companies, which receive a set payment for each enrollee. The idea is to help control costs by allowing these insurers, who must cover the same services as traditional Medicare, to keep some of the federal payment as profit if they can provide care less expensively.

The biggest providers of Advantage plans are Humana and United Healthcare, and they and others market aggressively to persuade seniors to sign up or switch plans. A new U.S. Senate report found that some of these Advantage plan practices are deceptive; for example, some marketing firms sent Medicare beneficiaries mailers made to look like government websites or letters. This has confused many seniors, and Medicare officials have promised to increased policing.

But the marketing has paid off for insurers. The proportion of eligible Medicare beneficiaries enrolled in Medicare Advantage plans has hit 48 percent. By next year, most beneficiaries will likely be Advantage enrollees.

Which is better: Medicare or Medicare Advantage?

The two plans operate quite differently, and the health and financial consequences can be dramatic. Each has, well, advantages — and disadvantages.

Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation, is a co-author of a recent literature review comparing Medicare Advantage and traditional Medicare. One important finding, Dr. Biniek said: “Both Medicare Advantage and traditional Medicare beneficiaries reported that they were satisfied with their care — a large majority in both groups.”

Advantage plans offer simplicity. “It’s one-stop shopping,” she added. “You get your drug plan included, and you don’t need a separate supplemental policy,” the kind that traditional Medicare beneficiaries often buy, frequently called Medigap policies.

Medicare Advantage may appear cheaper, because many plans charge low or no monthly premiums. Unlike traditional Medicare, Advantage plans also cap out-of-pocket expenses. Next year, you’ll pay no more than $8,300 in in-network expenses, excluding drugs — or $12,450 with the kind of plan that permits you to also use out-of-network providers at higher costs.

Only about one-third of Advantage plans (called P.P.O.s, or preferred provider organizations) allow that choice, however. “Most plans operate like an H.M.O. — you can only go to contracted providers,” said David Lipschutz, the associate director of the Center for Medicare Advocacy.

Advantage enrollees may also be drawn to the plan by benefits that traditional Medicare can’t offer. “Vision, dental and hearing are the most popular,” Mr. Lipschutz said, but plans may also include gym memberships or transportation.

“We caution people to look at what the scope of the benefits actually are,” he added. “They can be limited, or not available, to everyone in the plan. Dental care might cover one cleaning and that’s it, or it may be broader.” Most Advantage enrollees who use these benefits still wind up paying most dental, vision or hearing costs out of pocket.

What are the downsides to Medicare Advantage?

One big downside is that these insurers require “prior authorization,” or approval in advance, for many procedures, drugs or facilities.

“Your doctor or the facility says that you need more care” — in a hospital or nursing home, say — “but the plan says, ‘No, five days, or a week, two weeks, is fine,’” said David Lipschutz, the associate director of the Center for Medicare Advocacy. Then you must either forgo care or pay out of pocket.

Advantage participants who are denied care can appeal, and those who do so see the denials reversed 75 percent of the time, according to a 2018 report by the Department of Health and Human Services’s Office of Inspector General. But only about 1 percent of beneficiaries or providers file appeals, “which means there’s a lot of necessary care that enrollees are going without,” Mr. Lipschutz said.

Another report this spring by the inspector general’s office determined that 13 percent of services denied by Advantage plans met Medicare coverage rules and would have been approved under traditional Medicare.

Advantage plans can also be problematic if you are traveling or spending part of each year away from home. If you live in Philadelphia but get sick on vacation in Florida, all local providers may be out of network. Check to see how the plan you’re using or considering treats such situations.

So maybe I should just go with traditional Medicare?

“The big pro is that there are no networks,” Jeannie Fuglesten Biniek, a senior policy analyst at the Kaiser Family Foundation, said of traditional Medicare. “You can see any doctor that accepts Medicare,” as most do, and use any hospital or clinic. Traditional Medicare beneficiaries also largely avoid the delays and frustrations of prior authorization.

But traditional Medicare sets no cap on out-of-pocket expenses, and its 20 percent co-pay can add up quickly for hospitalizations or expensive tests and procedures. So most beneficiaries rely on supplemental insurance to cover those costs; either they buy a Medigap policy or they have supplementary coverage through an employer or Medicaid. Medigap policies are not inexpensive; a Kaiser Family Foundation survey found that they average $150 to $200 a month.

The Kaiser literature review found that traditional Medicare beneficiaries experienced fewer cost problems than Advantage beneficiaries if they had supplementary Medigap policies — but if they didn’t, they were more likely to report problems like delaying care for cost reasons or having trouble paying medical bills.

Traditional Medicare also provides somewhat better access to high-quality hospitals and nursing homes. David Meyers, a health services researcher at Brown University, and his colleagues have been tracking differences between original Medicare and Medicare Advantage for years, using data from millions of people.

The team has found that Advantage beneficiaries are 10 percent less likely to use the highest quality hospitals, four to eight percent less likely to be admitted to the highest quality nursing homes and half as likely to use the highest-rated cancer centers for complex cancer surgeries, compared to similar patients in the same counties or ZIP codes.

In general, patients with high needs — people who were frail, limited in activities of daily living or had chronic conditions — were more apt to switch to traditional Medicare than those who were not high-need.

“When you’re healthier, you may run into fewer of the limitations of networks and prior authorization,” Dr. Meyers said. “When you have more complex needs, you come up against those more frequently.”

Another downside to traditional Medicare, though, is that it does not include drug coverage. For that, you need to buy a separate Part D plan.

What should I know about drug plans?

Unlike most Medicare Advantage plans, traditional Medicare does not include drug coverage. For that, you must buy a separate Part D plan.

For 2023, beneficiaries can typically choose between 24 stand-alone Part D plans, at premiums that range from $6 to $111 a month and average $43 for policies available nationwide, said Juliette Cubanski, the deputy director of the program on Medicare policy at the Kaiser Family Foundation.

“If you’re the person who doesn’t take many medications or only uses generics, the best strategy might be to sign up for the plan with the lowest premium,” Dr. Cubanski said. “But if you take a lot of medications, the most important thing is whether the drugs you take, especially the most expensive ones, are covered by the plan.”

Different plans cover different drugs (which can change from year to year) and place them in different pricing tiers, so how much you pay for them varies. And, to make comparisons more dizzying, certain pharmacy chains are “preferred” by certain plans, so you could pay more at CVS than at Walmart for the same drug, or vice versa.

How does Part D work? First, most stand-alone plans have a deductible: $505 in 2023. You pay that amount out of pocket before coverage kicks in.

Then, a Part D plan, either stand-alone or as part of a Medicare Advantage plan, usually establishes five tiers for drugs. The cheapest two tiers, for generic drugs, could be free or run up to about $20 per prescription. Next comes a tier for preferred brand-name drugs, probably $30 to $45 per prescription in 2023.

Drugs on the next highest tier, for nonpreferred brand-name drugs, usually involve coinsurance — paying a percentage of the drug’s list price — rather than a flat co-pay. For national stand-alone plans, that ranges from 34 to 50 percent, Dr. Cubanski said.

Drugs that cost more than $830 a month are considered specialty drugs, the highest-priced tier. You only pay 25 percent of the price, but because these are so expensive, your costs rise.

Once your total drug costs reach $4,660 (for 2023), including out of pocket costs and what your plan paid, you have entered the so-called coverage gap phase and will pay 25 percent of the cost, regardless of tier.

Finally, when your costs reach $7,400 — including what you’ve paid, plus the value of manufacturer discounts — you have hit the threshold for catastrophic coverage. After that, you pay just 5 percent.

After I pick a plan, can I switch if I don’t like it?

You can, but be careful.

Switching between Medicare Advantage plans is fairly easy. But switching from traditional Medicare to an Advantage plan can cause a major problem: You relinquish your Medigap policy, if you had one. Then, if you later grow dissatisfied and want to switch back from Advantage to traditional Medicare, you may not be able to replace that policy. Medigap insurers can deny your application or charge high prices based on factors like pre-existing conditions.

(There are some exceptions. For instance, people who drop a Medigap policy to enroll in an Advantage plan for the first time can repurchase it, or buy another Medigap policy, if they switch back to traditional Medicare within a year.)

“Many people think they can try out Medicare Advantage for a while, but it’s not a two-way street,” said David Lipschutz, the associate director of the Center for Medicare Advocacy. Except in four states that guarantee Medigap coverage at set prices — New York, Massachusetts, Connecticut and Maine — “it’s one type of insurance that can discriminate against you based on your health,” he said.

The fact is, few consumers do any real comparison shopping, or shift their coverage in either direction. Dozens of lawsuits charging Medicare Advantage insurers with fraudulently inflating their profits apparently haven’t made much difference to consumers, either.

In 2020, only 3 in 10 Medicare beneficiaries compared their current plans with others, a recent Kaiser Family Foundation survey reported. Even fewer beneficiaries changed plans, which might reflect consumer satisfaction — or the daunting task of trying to evaluate the pluses and minuses.

Where can I find help with these decisions?

You will find plenty of information on the Medicare.gov website, including the Part D plan finder, where you can input the drugs you take and see which plan gives you the best and most economical coverage. The toll-free 1-800-MEDICARE number can also assist you.

Perhaps the best resources, however, are the federally funded State Health Insurance Assistance Programs, where trained volunteers can help consumers assess both Medicare and drug plans.

These programs “are unbiased and don’t have a pecuniary interest in your decision making,” said David Lipschutz, the associate director of the Center for Medicare Advocacy. But their appointments tend to fill up quickly at this time of year, and the annual open enrollment period ends on Dec. 7. Don’t delay.

Congress pitches bill to warn Medicare beneficiaries of late enrollment fees

Posted on by • Posted in Health Policy, Medicare, Medicare Late Enrollment Penalties, Medicare Part B, Medicare Part D • Leave a comment
https://www.beckerspayer.com/payer/congress-pitches-bill-to-warn-medicare-beneficiaries-of-late-enrollment-fees.html?origin=PayerE&utm_source=PayerE&utm_medium=email&utm_content=newsletter

A bill introduced in Congress would require the government to warn adults 60 and older of penalties associated with late Medicare enrollment, according to a March 2 CNBC report. 

The move targets adults before they reach the Medicare-eligible age of 65, especially those who are not auto-enrolled in coverage through Social Security. The number of beneficiaries who must manually enroll in coverage at age 65 has increased 32 percentage points to 40 percent since 2008, according to CNBC. 

The bill specifically targets Medicare Part B, which hits enrollees with a penalty equal to 10 percent of the standard premium for each 12 months they should have been enrolled in. The penalties last a lifetime and adjust with premiums. 

Roughly 776,200 enrollees face penalties in 2020. Based on current premiums, monthly penalties would be about $46. 

Medicare Part D also has a penalty, but its rate is 1 percent of premiums paid, or about 33 cents based on current rates.

Medicare’s looming premium hike

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https://www.axios.com/medicare-premium-increase-aduhelm-coronanvirus-2022-biden-d0c1d191-0fdd-49fa-8787-08e6696740aa.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top
Two workers serve food to two elderly women at a senior living center.

Monthly premiums that cover physician and outpatient care for Medicare patients will increase by 15% next year, the Biden administration said in a notice Friday evening.

Why it matters: People on Medicare are getting slammed with a big hike during an election year, due largely to the big price tag from the questionable Alzheimer’s treatment, Aduhelm, and uncertainty stemming from the coronavirus.

By the numbers: Standard Medicare Part B premiums will be $170.10 per month next year, up from $148.50 per month this year.

  • That equals an extra $259.20 in extra costs over the course of the year, just in premiums.
  • The Part B deductible also is increasing 15%, from $203 to $233.

Between the lines: Medicare is still determining whether it will pay for Aduhelm yet, but federal actuaries have to plan for a “high-cost scenario of Aduhelm coverage,” regulators said.

  • The FDA approved Aduhelm in June, and Biogen priced Aduhelm at $56,000 per year on average.
  • That price tag, along with all of the hospital and doctor costs associated with administering the drug and ancillary tests, could lead to “very significant” costs for the taxpayer-funded program, according to the notice.

The bottom line: The pandemic has made it difficult to predict future Medicare spending, such as trying to determine whether patients will get more non-COVID care that had been put off.

  • But Aduhelm — a treatment that has not conclusively proved that it improves brain function of Alzheimer’s patients — is now a high-profile example of pharma pricing power affecting Medicare patients’ pocketbooks and represents a redistribution of taxpayer money into Biogen’s coffers.

Medicare Advantage vs Medicare Supplement Plan

Posted on by • Posted in Health Insurance Coverage Adequacy, Health Insurance Premiums, Medicare, Medicare Advantage, Medicare Part A, Medicare Part B, Medicare Part D, Medicare Supplement, Narrow Network, Out of Network, Out of Pocket Expenses, Out-of-Network • Leave a comment
Medicare Advantage vs Medicare Supplements (Medigap) | MedicareFAQ

Judge strikes down Trump administration’s site-neutral payments rule

Posted on by • Posted in American Hospital Association (AHA), Center for Medicare and Medicaid Services (CMS), District Court, District Court of Appeals, Health Policy, Health System, Hospital Industry, Medicare, Medicare Part B, Medicare Rate Setting, Rev Cycle Management • Leave a comment

https://www.fiercehealthcare.com/hospitals-health-systems/judge-strikes-down-trump-administration-s-site-neutral-payments-rule?mkt_tok=eyJpIjoiT1dJNE5tUTFZV0k1TVdRNCIsInQiOiJMakFtS1IzZmxaRDlQNUtjdFdMUHVYUFdBd1wvXC9EZFR3ekhHU3ZsYVNib2t3bTlEb0Z2bklLZndEZXFOTjZ1RVZ0bURYMXI5dGFNcW92SXFYV25HTVh4d01tNEY4YkVCUnBMamhpbllXSytVTW5ybGJ1OTh0UjJmVDRmSWJ6c1wveCJ9&mrkid=959610

Gavel court room lawsuit judge

In a huge win for hospitals, a federal judge has tossed the Trump administration’s rule instituting site-neutral payments.

District of Columbia Judge Rosemary Collyer ruled Tuesday that the Centers for Medicare & Medicaid Services (CMS) overstepped its authority when it finalized a plan to extend a site-neutral payment policy to clinic visits with the goal of paying the same in Medicare for evaluation and management services at physician offices and hospitals.

Hospital groups immediately rebelled against the plan. Within hours of the rule’s finalization in November, the American Hospital Association (AHA) vowed to challenge the change, as it would cut payment rates to hospitals significantly. AHA and the Association of American Medical Colleges formally did so about a month later.

CMS argues that the payment change would save Medicare beneficiaries $150 million per year, lowering average copays from $23 to $9. Those savings, however, are coupled with significant payment cuts to hospitals; the AHA estimated losses of $380 million in 2019 and $760 million in 2020.

In her order, Collyer said that the rule did not meet the standard of a method to control unneeded hospital use, as CMS argued in court filings.

“CMS believes it is paying millions of taxpayer dollars for patient services in hospital outpatient departments that could be provided at less expense in physician offices. CMS may be correct,” the judge wrote. “But CMS was not authorized to ignore the statutory process for setting payment rates in the Outpatient Prospective Payment System and to lower payments only for certain services performed by certain providers.”

Collyner did not require CMS to pay funds lost under policy change so far this year and instead requested a status report by Oct.1 from both parties to determine whether additional briefings are required to decide a suitable resolution.

In a statement, the AHA and AAMC praised the judge’s decision.

“The ruling, which will allow hospitals to maintain access to important services for patients and communities, affirmed that the cuts directly undercut the clear intent of Congress to protect hospital outpatient departments because of the many real and crucial differences between them and other sites of care,” the hospital groups said. “Now that the court has ruled, it is up to the agency to put forth remedies for impacted hospitals and the patients they serve.”

 

 

 

Why have Medicare costs per person slowed down?

Posted on by • Posted in 2020 Election Issues, Aging Population, Baby Boomers, Congressional Budget Office (CBO), Health Policy, Medicare, Medicare Advantage, Medicare Buy-In, Medicare for All, Medicare Part A, Medicare Part B • Leave a comment

https://usafacts.org/reports/medicare-cost-slowed-down-hospital-baby-boomers?utm_source=EM&utm_medium=email&utm_campaign=medicaredive

Image result for Why have Medicare costs per person slowed down? Baby boomers and fewer hospital stays

The 65+ population now makes up 16% of the US population, up from 11% in 1980. In response to an aging population, Medicare costs are going up. Benefits totaled $713 billion in 2018, 25% higher than in 2009, and Medicare spending accounts for a fifth of all healthcare spending as of the latest year of data.

However, while program costs are increasing, there is an interesting counter-trend – the per person cost for insuring someone through Medicare has actually decreased.

In 2018, the overall cost of Medicare per enrollee was $13,339 per year, about $30 less than it was in 2009, adjusting for inflation. That’s even as benefits across Medicare totaled $713.4 billion, $144.4 billion more than in 2009.

Why are the costs of insuring someone through Medicare going down? A combination of demographics and policy changes may point to an answer.

THE AVERAGE MEDICARE BENEFICIARY IS GETTING YOUNGER

The average age fell from 76 to 75 between 2007 and 2017. Enrollment in all types of Medicare increased 29% during that period from 44.4 million to 58.5 million.

That one year drop in average age is significant for Medicare costs.

An influx of Baby Boomers enrolling in Medicare is playing a role in slowing down an increase in costs for Medicare Part A, which funds hospital stays, skilled nurse facilities, hospice and parts of home health care. In 2008, the share of Original Medicare (Part A or B) beneficiaries who were 65 to 74 years old was 43%. In 2017, 65- to 74-year-olds made up 48% of beneficiaries, the group’s highest share in the 21st century.

A 2015 Congressional Budget Office study showed that we spend 73% more on an enrollee in the 75 to 84 bracket than we do on those in the 65 to 74 bracket.

Our analysis below show how demographics factor into Medicare costs, especially age.

In 2017, there were 38,347,556 Medicare Part A enrollees, making up 100.0% of total enrollees. The federal government spent $188,093,274,340 on program payments for this group, 100.0% of the total Total Part A program payments for this type of enrollee changed from $5,052 in 2013 to $4,905 in 2017, a -2.9% change.

With Medicare Part B there were 33,562,359 enrollees, making up 100.0% of total enrollees. The federal government spent $188,886,121,627 on program payments for this group, 100.0% of the total Total Part B program payments for this type of enrollee changed from $5,287 in 2013 to $5,628 in 2017, a 6.4% change.