By D. Kenton Henry Editor, Agent, Broker 6 October 2020
For most of us, 2020 can’t be over soon enough. And so, as we enter the last quarter of this watershed year, we hope to put Covid-19 and the uncertainty of the presidential election behind us in 2021.
While Inflation remains low, lower prescription drug costs have, for the most part, eluded us. And the medical costs of the pandemic have only accelerated Medicare’s path to insolvency, as covered in Featured Article 1, below.
Perhaps as a result, Medicare has seen fit to adjust several of the cost variables of Part D Prescription Drug Plans, as is their option on an annual basis. In Texas, in 2021, there will be 35 different Part D Plans to choose from. Why so many, you ask? Because each company has typically elected to offer different plans, each focusing on the type of drugs someone requires in order to meet their needs without forcing them to purchase an inappropriately high priced plan. Consequently, each plan covers some drugs and not others. A plan will either focus on low cost generics, higher cost brand name or specialty drugs, or something in between. All are priced accordingly. The plan which is best for you is based entirely on the drugs and dosages you use – not the drugs your spouse or neighbor uses.
On a bit of good news, for those using no prescription drugs, or only low cost generic drugs, the lowest premium plan for Texans is $7.30 monthly. This is down approximately $6 from 2020! Before you get too excited, be reminded that premium is only one factor in determining which drug plan you elect during the OPEN ENROLLMENT PERIOD beginning October 15th and running through December 7th. During this time, it is my job to first assure all your Rx drugs are covered by the plan you choose. Beyond that, I help you identify the Part D Drug Plan which results in your lowest “Total Cost” (LTC) for the coming calendar year. Your LTC is the sum of the premium you pay + any deductible which may be due + the copays or coinsurance you pay for your prescription drugs. When I add those three things, I am looking for your lowest total sum. That will be my plan recommendation. I do this for each of my clients, who requests such, this time of year.
As stated, I asked you not get too excited over the lower premium option. As implied, it does no good to cut your premium in half if your deductible and / or copays double or triple!
The calendar year deductible allowable by Medicare is going to $445 from $435.
You will enter the Gap (donut hole) when a combination of your drug costs and the plan’s costs exceed $4,130. During this time, you’ll pay your copays or coinsurance for your drugs.
You will remain in the Gap until your personal annual out-of-pocket drug costs reach $6,550.
Beyond that you enter Catastrophic coverage wherein you will pay $3.70 for all drugs treated as generics and the greater of 5% or $9.20 for all other drugs for the remainder of the calendar year.
In addition to identifying and electing your lowest total cost drug plan during Open Enrollment you may be someone who wants to re-shop your Medicare Advantage Plan or elect one for the first time. Those who are my client know that, in my 34 years in the business, I have always preferred – where affordable – my client’s elect Medicare Supplement over Medicare Advantage. This is because I want them to have access to as many provider and treatment options as possible. With a Supplement, an insured member may go to any doctor, hospital, or medical provider that accepts Medicare. Pre-authorization of Medical procedures is not required. However, the reality is – we all get older (or we don’t). And as we get older, our Medicare premiums increase. Unfortunately, many of us are living on fixed incomes and these become a burden. Consequently, while making it abundantly clear their access to providers and treatment will be rationed – and they will pay copays and coinsurance as they go – I offer most all the competitive Medicare Advantage Plans available in Houston and the surrounding counties from a total of 6 companies. The premiums can be as low as $0. This year I have added what, in 2020, is the only 5 Star Medicare Advantage Plan in our area.
(Featured Article 2, below, outlines the liabilities you will be exposed to if you attempt to go with Original Medicare alone.)
For those taking my advice and remaining in Medicare Supplement as long as they can afford to do so I, again, offer most all the more competitive plans in our area. Medicare related insurance company proprietary concerns prohibit me from naming them without first obtaining approval so I will forego doing so until such time as you request quotes from me. There is no obligation to acquire any of the aforementioned products from me and no fee assessed by me for my quotes, advice, or purchase of a plan. The premiums for plans purchased through me are identical to those of the insuring companies as if purchased directly from them. However, in the process of consulting with me, you gain my objective opinion garnered from years of experience in the Medicare related insurance market and as a Medicare consumer, myself.
Please call me with your questions and concerns. I eagerly anticipate working with and assisting you in identifying and acquiring the products you feel will limit your medical expense liabilities while providing the greatest quality of life in terms of health and financial well-being.
My sincerest thanks for considering my services,
D. Kenton Henry
All Plan Med Quote TheWoodlandsTXHealthInsurance.com Allplanhealthinsurance.com Office: 281.367.6565 Text my cell @ 713.907.7984 Email: Allplanhealthinsurance.firstname.lastname@example.org
For the latest in health and Medicare-related insurance news go to: Https://HealthandMedicareInsurance.com
FEATURED ARTICLE 1:
Covid-19 is accelerating the Medicare trust fund’s dive toward insolvency
By GRETCHEN JACOBSON
SEPTEMBER 3, 2020
The Covid-19 pandemic has claimed another victim: Medicare’s trust fund. The Congressional Budget Office released a report Wednesday projecting that Medicare’s federal Hospital Insurance Trust Fund, which helps pay for Medicare beneficiaries’ hospital bills, will be insolvent by fiscal year 2024. That means there won’t be enough money in the trust fund to fully pay hospitals, doctors, and nursing homes for the care they provide to Medicare beneficiaries.
These projections describe a crisis for Medicare, a program that, together with Social Security, form the bedrock of our country’s retirement safety net and assure that millions of older adults can get the health care they need.
Concerns about the Medicare trust fund are not new. Insolvency projections for the trust fund have varied over the years, but the outlook has not been this dire since 1971. Before the Covid-19 pandemic, Medicare trustees had projected that the trust fund would become insolvent in 2026. That time frame has accelerated as payroll tax revenue flowing into the trust fund in the next few years is anticipated to be far lower due to the economic recession resulting from the pandemic.
At the same time, health care costs and money flowing out of the trust fund are similar to pre-pandemic levels. In addition, per-enrollee payments, which pay for each person covered regardless of how much health care that person uses, and which play a growing role in Medicare, blunt any reduction in health care spending.
A weekly digest of our opinion column, with insight from industry experts.
Notably, neither candidate for president has mentioned the Medicare trust fund, much less how they would solidify Medicare’s future. Perhaps that is because while Medicare is an important issue for voters, there are a limited number of options for addressing the trust fund’s solvency, none of which are easy choices during normal times, much less during a recession with an ongoing pandemic.
Regardless of who is elected president, come January his administration and Congress will need to develop a plan to address Medicare’s solvency, and decide who will pay to extend it.
The choices for doing so fall into a few broad categories:require Medicare beneficiaries or taxpayers to pay more to support the program
pay health care providers less for the care they provide to beneficiaries
or increase how much the federal government spends on Medicare.
All of these options have significant drawbacks. With unemployment at its highest level since the Great Depression, Americans likely will have little appetite for new or higher taxes or paying more for Medicare services. Providers have suffered financially during the pandemic and paying them less is also likely to be unpopular. And increasing government spending on Medicare means either increasing the country’s debt or making cuts to other federally funded programs.
There are possible workarounds for these challenges. Taxes could be raised on wealthier Americans, though that might be politically challenging and insufficient on its own to achieve enough savings. Cuts to provider payments could be targeted to those on firmer financial footing or take place in the form of initiatives that improve the efficiency of care.
Lawmakers will likely need a multipronged approach that includes a combination of options to generate enough savings and meaningfully extend the solvency of the trust fund. The sooner lawmakers can lay a road map toward Medicare solvency, the more it will help beneficiaries, their families, and health care providers plan for the future.
Gretchen Jacobson is vice president for Medicare at the Commonwealth Fund.
FEATURED ARTICLE 2:
Some Medicare beneficiaries who catch Covid-19 may face huge bills for care
PUBLISHED FRI, OCT 2 202012:54 PM EDT
KEY POINTSOlder Americans, including 74-year-old President Donald Trump, are more at risk for developing complications from Covid-19, especially if they have underlying health conditions.
Among Medicare beneficiaries, there have been more than 1 million cases this year through Aug. 15, according to preliminary data from the Centers for Medicare and Medicaid.
The cost of treatment for Medicare enrollees depends on the specifics of their coverage, which varies from beneficiary to beneficiary. With 74-year-old President Donald Trump testing positive for Covid-19, Medicare beneficiaries may be reminded of their own vulnerability.
For the 62.7 million people enrolled in Medicare — the majority of whom are age 65 or older — the coronavirus generally poses a greater health risk. While Congress and regulators have nixed out-of-pocket outlays for testing, the potential cost of treating the virus may pose a greater concern, due to the greater likelihood of individuals in that age group developing complications from the virus.
In the U.S., the pandemic has resulted in more than 7.28 million cases and nearly 208,000 deaths. Among Medicare beneficiaries, there have been more than 1 million cases this year through Aug. 15, according to preliminary data from the Centers for Medicare and Medicaid.
President Trump, FLOTUS test positive for Covid-19
More than 284,000 of those involved hospitalizations. Almost half (49%) of those stays lasted one to seven days, according to the data. Roughly 5% last longer than 30 days.
While some Medicare beneficiaries have additional insurance that covers the out-of-pocket costs — i.e., copays and deductibles — others pay more than their peers for hospital stays and various medical services.
Although most people recover from the coronavirus without requiring significant medicare care, here are costs that could come with Medicare coverage if treatment is needed.
Basic Medicare costs
About 60% of beneficiaries stick with basic, or original, Medicare. Many of them also have additional coverage — e.g., Medicaid, an employer plan or a supplemental policy (Medigap).
Basic Medicare, which has no cap on out-of-pocket spending, consists of Part A (hospital coverage) and Part B (outpatient care).
If you don’t have additional coverage beyond basic Medicare — 6.1 million beneficiaries did not, at last count — you’d pay a $1,408 Part A deductible if you’re admitted to the hospital.
That would cover the first 60 days per benefit period. Beyond that, daily copays of $352 apply up to the 90th day. Anything above dips from “lifetime reserve” days at a rate of $704 daily. For patients moved to a skilled nursing facility, there is no copay for the first 20 days; it’s $176 after that.
Medical services like doctor’s visits are delivered through Part B. It has a $198 deductible and beneficiaries typically pay 20% of covered services.
If you have a Medigap policy, many of these costs would be covered, either partially or fully. However, Medigap policies have their own rules for enrolling, which can limit who has access to them. And, they can cost several hundred dollars a month.
Meanwhile, Medicare Part D (prescription drug coverage) also has no cap on out-of-pocket spending. The cost of medicine depends on the specifics of coverage. If there’s a deductible with your plan, it can be up to $435.
About 24 million Medicare beneficiaries get Parts A and B delivered through an Advantage Plan, which also usually includes prescription drug coverage.
These plans may or may not have a monthly premium on top of what beneficiaries pay for basic Medicare. They also typically have different deductibles and copays from original Medicare, and those costs can vary from plan to plan.
For instance, while you might not face a Part A deductible of $1,408 for a hospital stay, your Advantage Plan may charge you a daily copay for the time you’re an inpatient.
FEATURED ARTICLE 3:
PHARMACEUTICALS & MEDICAL TECHNOLOGY
Recent press reports and other evidence suggest that Medicare Part D plans may be encouraging the use of brand-name drugs instead of generics. However, the scope of such practices is unclear. We examined Medicare Part D formulary coverage and tier placement of matched pairs of brand-name drugs and generics to quantify how often preferred formulary placement of brand-name drugs is occurring within and across Part D plans and to assess the cost implications for Medicare and its beneficiaries. We found that in 2019, 84 percent of 4,176,772 Part D plan-product combinations had generic-only coverage (that is, the brand-name counterparts were not covered). Another 15 percent covered both the brand-name and generic versions of a product. For the small number of products whose brand-name versions were covered preferentially to their generic equivalents, beneficiary and Medicare prices were generally low for both products. Overall, we found that most Part D plan formularies are designed to encourage the use of generics rather than their brand-name counterparts. Policy makers should continue to monitor Part D formulary coverage patterns to ensure consistent and generous coverage for generic drugs, given their important role in reducing prescription drug spending.