By D. Kenton Henry, Editor / Agent / Broker — TheWoodlandsTXHealthInsurance.com, AllPlanHealthInsurance.com, HealthandMedicareInsurance.com 30 October 2025
Each November in Texas marks more than just the start of the new health insurance year—it’s your gateway to securing coverage for the year ahead. This time around, the 2026 individual and family health insurance market is undergoing noticeable changes. Here’s what you need to know—and how you can be ready.
1. Why 2026 matters
Open enrollment for 2026 policies begins November 1, 2025, and runs until January 15, 2026 for most Texas consumers. If you don’t act in this window, you could be locked out of making changes until next year unless a qualifying life event occurs. Given major shifts among carriers and plan options, early action is more important than ever.
2. Carrier changes you should track
One of the major headlines: Aetna will exit the Texas individual and family market beginning in 2026. That means if you currently have an Aetna plan, your policy will not renew for 2026. You’ll need to select a different carrier in the upcoming enrollment period.
Other carriers are repositioning their offerings, adjusting networks, benefits, and rates. Even if your carrier is staying, plan names and design may change. As your broker, I’ll review all available options from multiple carriers and ensure you’re not simply renewing by default.
3. What this means for you
No automatic renewal: If your carrier exits the market, your current plan will not carry over. You’ll receive a Notice of Change—or termination—and need to select a new plan.
Shop your options: Differences between plans are not only about monthly premiums. Review networks, cost-sharing, deductibles, out-of-pocket maximums, and whether benefits match your healthcare needs.
Subsidy changes: The federal subsidy rules continue to evolve. Even small changes in income, household, or eligibility can shift your subsidy level. I’ll help you analyse eligibility for Advance Premium Tax Credits (APTC) and other cost-saving tools.
Timing matters: Beginning November 1, I’ll be available to assist you through the selection process—not just on carriers and plans, but on ensuring accurate enrollment to avoid coverage gaps.
4. Why working with a broker matters
As an independent broker specializing in medical insurance since 1986, I work with virtually every major carrier licensed in Texas. My services to you are free of charge. My goal is to ensure you get the best plan that fits your health needs, budget, and preferences—especially in a year of significant market change. Rather than navigating dozens of plan names on your own, let me do the heavy lifting and help you make an informed choice.
5. What to do now
Gather your information – your current health plan, recent premium receipts, summary of benefits, and any health changes.
Schedule your review – open enrollment kicks off November 1. If you’d like early preparation, I’m available now to pre-review your situation so you’re ready to act.
Act during the window – November 1 through January 15 is your open period. Plans go into effect January 1, 2026, or, depending on carrier rules, as early as December 1, 2025.
Don’t wait – with carrier exits and plan redesigns in motion, the sooner you start the review, the better your chance of finding the optimal match.
Working together, we’ll turn these market shifts into an advantage—so instead of scrambling when notices arrive, you’ll move confidently into 2026 with coverage aligned to your needs.Let me handle the complexity so you can focus on your life, your health, and your goals.
If it’s after hours, or you simply prefer, you can do preliminary research before calling me by obtaining quotes from my quoting engine. You do NOT have to log in to obtain them but be certain to call me afterwards with questions, and assistance in finding your providers within the networks, as well as applying. CLICK HERE: https://allplaninsurance.insxcloud.com/get-a-quote
D. Kenton Henry Editor · Agent · Broker TheWoodlandsTXHealthInsurance.com * AllPlanHealthInsurance.com * HealthandMedicareInsurance.com
D. Kenton Henry Editor, agent, broker 30 SEPTEMBER 2025
Medicare 2026: Welcome clients and prospective clients! Before reading this (if you have not already), you should go to your mail box and retrieve your 2026 Annual Notice of Change from Medicare. You were due to receive it no later than today per Center For Medicare Rules and Regulations. If will give you a good idea if you need to re-shop your Medicare Advantage or Part D Drug plan for the coming calendar year. If not, the following changes may.
10 changes to review before the Annual Election period, often referred to as the Open Enrollment (Oct 15–Dec 7)
If you’re on Medicare, 2026 brings important updates—especially to prescription drug coverage. The Part D out-of-pocket cap rises to $2,100, the standard deductible becomes $615, and Medicare’s first negotiated drug prices start on January 1, 2026. Medicare Advantage also gets new guardrails around prior authorization and appeals, and some supplemental “perks” are being narrowed. Check your Annual Notice of Change (ANOC) (it should arrive by Sept 30) and compare your plan options—small differences can mean big savings. If you’d like help, I’ll review your medications, doctors, and benefits to make sure you’re in the right fit for January 1.
Here is an itemized list of the 10 Key Changes:
Medicare changes your 2026 plan review should cover
1) Part D’s annual out-of-pocket cap rises to $2,100. Once a member’s 2026 Part D out-of-pocket spending reaches $2,100, they’ll pay $0 for covered Part D drugs for the rest of the calendar year.
2) The standard Part D deductible increases to $615. Plans can’t set a deductible higher than $615 in 2026 under the redesigned Part D rules.
3) Drug price negotiations start showing up at the counter. Medicare’s first set of negotiated Maximum Fair Prices (MFPs) for 10 widely used Part D drugs take effect January 1, 2026. Members should review their ANOC and plan formularies to determine how these prices impact their medications.
4) Insulin and adult vaccines: protections continue. Part D insulin remains capped and no-deductible; starting in 2026, the cap is the lesser of $35, 25% of the MFP, or 25% of the negotiated price. ACIP-recommended adult vaccines remain $0 under Part D.
5) “Pay-over-time” for prescriptions auto-renews. The Medicare Prescription Payment Plan (monthly billing instead of paying large amounts at the pharmacy) auto-renews in 2026 unless the member opts out. It smooths payments but doesn’t lower total costs—good to remind clients who tried it in 2025.
6) Medicare Advantage prior-auth and appeals guardrails tighten. For 2026, CMS says MA plans must honor previously approved inpatient admissions (can only reopen for obvious error or fraud), and CMS closes appeals loopholes so members and providers receive required notices and can appeal adverse coverage decisions. Expect fewer mid-stay reversals. Centers for Medicare & Medicaid Services
7) Limits on certain “extra perks” in MA (SSBCI) take effect. CMS codified non-allowable Special Supplemental Benefits for the Chronically Ill—examples include non-healthy food, alcohol, tobacco, and life insurance. Some plans may rebalance extras as a result.
8) Star Ratings update: new/returning measures. 2026 Stars add or reintroduce measures like Kidney Health Evaluation for Patients with Diabetes plus Improving/Maintaining Physical and Mental Health (weight = 1). Tougher cut points in 2026 may shift plan bonuses and benefit richness—worth watching locally.
9) Part D benefit design shifts behind the scenes. Liability shares change across phases (plans, manufacturers, CMS), and there’s a new subsidy for selected (negotiated) drugs. Members may see formulary/tier adjustments—another reason to compare plans.
10) ANOC timing: what to tell clients. Remind everyone: Annual Notice of Change (ANOC) letters arrive by September 30 each year; if they didn’t see one, call the plan. Open Enrollment runs Oct 15 – Dec 7 for Jan 1 effective dates.
Check your Annual Notice of Change (ANOC) (it should arrive by Sept 30) and compare your plan options—small differences can mean big savings. If you’d like help, I’ll review your medications, doctors, and benefits to make sure you’re in the right fit for January 1.
Other Developments
Some Medicare Advantage supplemental benefits (i.e. nutrition support, OTC medicine) may be reduced in favor of core services.
In six states, prior authorizations for certain Original Medicare services will be tested.
Part B and Part D premiums and deductibles are both set to increase—Part B premium up ~11.6%, and Part D premium by about 6%.
Who Am I?
In addition to being the editor of this blog I have has been helping individuals and families navigate the health and Medicare insurance landscape since 1986. With nearly four decades of experience, he specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D prescription drug plans.
As an independent broker, I am appointed with virtually every competitive, A-rated Medicare insurance company in Texas, Indiana, Ohio, and Michigan. This broad access allows him to recommend the plan that truly best fits each client’s needs.
Above all, I work for my clients—not the insurance companies. You will never pay more by enrolling through me than you would if you purchased an insurance product directly from the carrier. My mission is to provide clear guidance, personalized recommendations, and ongoing support to ensure my clients get the coverage and peace of mind they deserve.
If you have any questions about 2026 Medicare Part D prescription drug plans, Medicare Advantage, or Medicare Supplement (Medi-Gap) policies, please give me a call.
Average premiums, benefits and plan choices for Medicare Advantage and the Medicare Part D prescription drug program should remain relatively stable next year, CMS said in a Sept. 26 news release. But MA enrollment is projected to decrease 900,000 in 2026.
Despite a slight dip in available MA plans nationally, over 99% of Medicare beneficiaries will still be able to access an MA plan.
The agency estimates the premiums for MA plans to drop from $16.40 to $14.00. On average, the total premium for standalone Part D is estimated to fall $3.81. CMS’ July forecast predicted elevated Medicare Part D base premium increases in the neighborhood of 6%.
Finding Your Doctor and Understanding Subsidies in HMO Plans
Shopping for individual or family health insurance can feel like navigating a maze—with dead ends, confusing signs, and few clear answers. Two of the most common pain points for shoppers are (1) trying to keep your current doctor while limited to an HMO network and (2) figuring out whether you qualify for a subsidy, known as an advance premium tax credit (APTC). Both challenges can make the process frustrating and overwhelming, especially during open enrollment when time is limited.
The HMO Headache: “Will My Doctor Be Covered?”
One of the biggest shocks people face when shopping for health insurance is realizing that their trusted doctor or medical provider might not be covered under a new plan—especially if it’s an HMO (Health Maintenance Organization). Unlike PPOs (Preferred Provider Organizations), which offer broader provider access and out-of-network options, HMO plans restrict coverage to a specific network of doctors and hospitals. If your doctor isn’t in the network, you may have to pay the full cost of your visit out of pocket—or switch doctors entirely.
Unfortunately, trying to find this information is often easier said than done.
Outdated or Inaccurate Provider Directories: Online directories can be incomplete or outdated. It’s not uncommon for a provider to be listed as “in-network” only for you to find out later they’ve left the plan.
Hard-to-Navigate Insurance Websites: Many insurance carrier sites don’t make it easy to search by doctor name, location, or specialty. Even worse, each plan may have its own “network tier,” adding another layer of complexity.
No Universal Search: There’s no centralized tool that lets you enter your doctor’s name and see every marketplace plan that includes them. You have to check each insurance company or plan individually.
For people with ongoing care needs—like managing chronic conditions or continuing with a trusted pediatrician or specialist—the possibility of switching providers isn’t just inconvenient, it can feel risky.
The Subsidy Puzzle: “Do I Qualify for Help Paying My Premium?”
The Affordable Care Act (ACA) made health insurance more accessible by offering subsidies for people who meet certain income guidelines. These subsidies, officially called advance premium tax credits, lower your monthly premium based on your household size and income.
The good news is that many people qualify.
The bad news is that determining whether you qualify can feel like filling out a tax return just to get a quote.
Income Guesswork: Subsidy eligibility is based on your estimated household income for the upcoming year. That’s right—you must predict your future income, even if you’re self-employed or work variable hours.
Family Dynamics Matter: Your household size includes dependents—even if they don’t need insurance—and income from every working member. This means getting it right often requires gathering data from multiple people.
Mid-Year Changes Complicate Things: If your income or family size changes mid-year, you may need to report it or risk having to repay part of your subsidy at tax time.
The ACA “Cliff” and “Glide Path”: Previously, you could lose your subsidy entirely if your income was even $1 over the limit. Recent changes have smoothed this out, but they are still complicated and frequently misunderstood.
And while tools like Healthcare.gov’s calculator are helpful, they often rely on broad estimates. They can’t account for all variables, such as gig work, investment income, or multiple part-time jobs.
Why It Feels So Frustrating
When you shop for health insurance, you’re not just picking a product—you’re making decisions that affect your finances, your family’s well-being, and your access to care. The stakes are high, yet the process often feels opaque and unnecessarily complicated.
You’re expected to:
Compare dozens of plans with unfamiliar terms,
Check if your providers are covered (without reliable tools),
Predict your income a year in advance,
And hope you don’t make a mistake that costs you money or coverage.
Tips for a Smoother Experience
While the system isn’t perfect, there are ways to reduce frustration:
Use a Licensed Agent or Broker: Agents specializing in ACA plans can often help you find plans that include your provider and determine if you qualify for subsidies—all at no extra cost.
Call Your Doctor’s Office: Don’t rely solely on insurance directories. Call your provider’s office directly to confirm if they accept a specific plan.
Keep Documentation: If your income fluctuates, keep clear records. This will help you provide accurate estimates and support your case in the event of an audit or dispute.
Update Changes Promptly: If your income or household size changes mid-year, report it on your health insurance marketplace to avoid surprise bills or tax penalties.
In Summary
Shopping for individual or family health insurance can be a stressful process—especially when you’re trying to keep your doctor and figure out if you qualify for financial help. Between restrictive HMO networks and confusing subsidy rules, it’s easy to feel stuck. But with a little extra diligence, some expert help, and the right questions, you can find a plan that fits your needs without sacrificing peace of mind.
If the process still feels overwhelming, you’re not alone. Many Americans share the same frustrations—and continue to hope for a more user-friendly system in the future.
Below is a chart outlining estimated income thresholds for qualifying for an Advance Premium Tax Credit (APTC) in 2025. These thresholds are based on a percentage of the Federal Poverty Level (FPL), which is adjusted annually. For simplicity, the chart includes 2024 FPL figures (used for 2025 coverage) and the income ranges (100%–400%+ of FPL) where most people qualify for subsidies under the ACA.
📝 Note: Due to the American Rescue Plan and Inflation Reduction Act, subsidies may extend beyond 400% of the FPL, with a sliding scale that caps the percentage of income spent on premiums. These extended subsidies are currently in place through 2025.
2024 Federal Poverty Level (FPL) and APTC Income Guidelines for 2025 Coverage
Household Size100% / FPL400% / FPLTypical APTC Eligibility Range
Minimum Income: You must earn at least 100% of the FPL to qualify for a subsidy in most states. In Medicaid expansion states, if you earn less than 138% FPL, you may qualify for Medicaid instead.
Upper Limit Removed: Thanks to temporary reforms, people earning above 400% FPL may still qualify for a subsidy if the cost of the benchmark plan exceeds ~8.5% of their income.
Household Size: Includes you, your spouse, and any dependents claimed on your tax return.
💡 What This Means for You
If your estimated annual income falls between the ranges shown above, you likely qualify for help paying your monthly health insurance premium.
Households earning more than 400% of the FPL may still qualify if their premiums exceed about 8.5% of income, thanks to current federal subsidy expansions.
Eligibility is based on your tax household — including you, your spouse, and dependents you claim on your tax return.
If your income is below 138% FPL, you may qualify for Medicaid (in most states).
DO NOT CALL AN 800 NUMBER and talk to some anonymous employee of an insurance company. Not only are they restricted to limiting you exclusively to their company’s options—but your personal information will be instantly sold and shared. Your phone is going to begin ringing off the hook!
I’ve been specializing in Medicare-related insurance for over thirty years, right here in The Woodlands, Texas, USA! I represent every Medicare-related product, including Supplement, Advantage, and Part D Drug plans, from virtually every “A” rated company doing Medicare-related business in Texas. And I CHARGE NO FEE for my services! Deal with a local agent/broker who values your business enough not to share it with anyone!
D. Kenton Henry Editor, Agent, Broker Office: 281.367.6565 Text my cell 24/7 @713.907.7984 Email: Allplanhealthinsurance.com@gmail.com
Congratulations! You’ve worked hard, and now you’re turning age 65! Navigating through the myriad of solicitations you are receiving and the choices you have to cover the expenses not paid by Medicare can be overwhelming.
The first thing is what not to do!
DO NOT CALL AN 800 NUMBER and talk to some anonymous employee of an insurance company. Not only are they restricted to limiting you exclusively to their company’s options—but your personal information will be instantly sold and shared. Your phone is going to begin ringing off the hook!
I’ve been specializing in Medicare-related insurance for over thirty years, right here in The Woodlands, Texas, USA! I represent every Medicare-related product, including Supplement, Advantage, and Part D Drug plans, from virtually every “A” rated company doing Medicare-related business in Texas. And I CHARGE NO FEE for my services! Deal with a local agent/broker who values your business enough not to share it with anyone!
D. Kenton Henry Editor, Agent, Broker Office: 281.367.6565 Text my cell 24/7 @713.907.7984 Email: Allplanhealthinsurance.com@gmail.com
By D. Kenton Henry Editor, Agent, Broker HealthandMedicareInsurance.com 11 September 2024
Welcome, fellow boomers and others blessed to have lived long enough to find yourself here. I believe you recognize that the information in my blog posts can contribute to this leg of our journey being the longest and most rewarding. I’m right here with you and doing my best to make it so for all of us. Coming changes in 2025 Medicare plans are significant, so please read this and feel free to take notes. They could impact you and probably will.
We will begin with what your Medicare Part B premium to Medicare for Out-Patient Care will go to: For those earning less than $105,000 your premium will go to $185.00 (up from $174.70) For those in the highest income bracket, earning greater than $500,000 your premium will go to $628.90 (from $594.00) For every income block in between, couples filing jointly, and what Part D premiums to Medicare will go to, please click on this link and scroll down: https://www.irmaacertifiedplanner.com/2025-irmaa-brackets/
An Annual Notice of Change (AOC) from your Medicare Part D prescription drug plan or a private insurer’s Medicare Advantage plan is due you. It will arrive in the United States mail and, per Medicare rules, by September 30th. So, like the pretty woman in the image above, open it and read it. It outlines how much your premiums, deductibles, and co-pays will differ in the coming year. Will your drugs be covered, and will your current drug plan even be available? We don’t yet know. Mutual of Omaha notified agents and brokers that it is withdrawing altogether from the Part Drug plan market beginning January 1. If you are currently with them or have any other plan that is exiting the marketplace, follow the instructions in the next paragraph.
According to eHealth, a mere 36% of those surveyed claim the AOC to be “readily understandable.” The author of the attached article recommends you spend at least 30 minutes reviewing it. However, if you finish this article, you can cut that time considerably. If you have finished all and still feel you are among the remaining (up to) 64%—please call me @ 281-367-6565.
This article is a follow-up to my last blog post on September 3rd. “MAJOR CHANGES IN MEDICARE PART D DRUG PLANS ARE COMING OUR WAY (what we know. and one thing we don’t know).” To read it, please click on this link. (if necessary, copy and paste it in your browser’s URLbox and hit enter):
Well, now we know more of the potential compromises mentioned or alluded to in that article. All of these are covered in detail in Feature Article 1 below.
The changes addressed here are largely because of the new $2,000 per year limit on Medicare Part D drug costs in 2025 (versus $8,000, plus 5% thereafter, in 2024). That leaves Medicare Part D insurance companies looking for ways to compensate for the additional costs shifting from you to them. Come January, you will meet a new deductible of up to $590 (from $545) for applicable drugs. Typically, your plan will apply this to brand-name drugs and not Tier 1 or Tier 2 generics.
Beyond that, the Gap, commonly referred to as the “donut hole” (in which you were previously responsible for 25% of your drug costs), has been eliminated entirely. You will have entered the “Initial Coverage” phase in which your elected drug plan will pay 65% of your applicable drug costs, and you will pay 25%. The Manufacturer (pharmaceutical company) will discount the remaining 10%. When you hit your maximum Out-of-Pocket (OOP) threshold of $2,000, you enter “Catastrophic Coverage”. At that point, your plan will pay 60%. Reinsurance (CMS, the Center for Medicare Services, i.e., the government) will pay 20%, and the Manufacturer will pay the remaining 20%. You will pay $0.
This, of course, sounds very well and good! And for those utilizing large quantities of drugs, or expensive drugs, this will indeed be of great benefit. But in what ways may the drug plans “compensate” for the additional costs they will bear? Much of such was referenced or alluded to above. However, please permit me to drill down on potential measures drug plans may take to offset their increased share of your drug cost. *(I am a Medicare Insurance product broker and not a C.P.A. As such, I will not address the impact on the taxpayer of their increased share of Medicare drug costs in this forum. wink. wink 😉
The drill down:
In addition to the higher deductible, higher premiums may be in store. But it could have been a lot worse. CMS did health insurance companies a favor with a “premium-stabilization” plan. In 2025, they will give them a subsidy in exchange for not “slapping members with exorbitant premium hikes. So, “what might have been a 40%, 50%, or higher premium increase may only be as high as 25%. Either way, it will be a sticker shock when some see how their premiums changed.” *(a paraphrase a quote in Feature Article 1)
The Kaiser Family Foundation says the average cost of a stand-alone Part D drug plan is $43. I have seen previews of premiums which will be $0, but others, have risen. In addition to your premium, co-pays for your drugs could go substantially higher. If your drug plan is obligated to charge you less for (or cover more of) a particular drug, are they simply going to charge you more for others?
And what about “Value Added Benefits” (VAB) available in some Medicare Advantage Plans? These include vision, hearing, and dental services. Other examples include acupuncture, bathroom safety devices, and wigs for hair loss. And what about your gym membership? Embedded dental insurance has been dramatically cut back or removed completely.
VAB are not covered by Original Medicare. Medicare Advantage has been able (often along with a $0 premium) to offer these things as an additional incentive to encourage enrollment in their plans. However, because you left Original Medicare and “assigned” the administration of your benefits and claims to the Advantage company when you enrolled, your plan can choose to provide these ancillary benefits that Original Medicare does not. Or they can choose to cover them no longer. This discretion is on their part because the provision of VAB benefits is not codified in law or per CMS regulation. Resultingly, they are not guaranteed. They are optional benefits that the plans have the right to withdraw at any time. I hope you can continue to “workout” at the gym, at your plan’s expense, in 2025 and beyond. But be prepared to purchase a home gym kit if you learn your membership is downgraded or your Advantage plan disappears entirely.
With no obligation, please feel free to contact me for clarification of these relevant issues and additional guidance in navigating the Medicare system and the changes referred to here. I’m in Medicare with you. I am a “Boomer” who has spent the better part of his life in the medical insurance market. For years, I have assisted individuals, families, and businesses in identifying and enrolling in health insurance plans that came as close as I could get them to fully meeting their medical insurance wants and needs.
To sum things up, I work for my clients. I work for you. Not the insurance company. I study, take their tests, and “certify” to represent their products each calendar year. I just completed certifying with approximately 14 companies in preparation for marketing their products in 2025. They do not pay to renew my licenses or my Errors and Omissions insurance, nor do they cover my office insurance and expenses. Neither they, nor anyone else, pay me wages or a salary. And that is great! I knew and understood those terms when I went out on my own. And that is precisely why I did it. I did not want to be beholden to the insurance company.
After becoming independent, the list of companies I was contracted with grew to over 40 during the 1990s. That number has changed as many of those companies went the way of the steam engine with “Obamacare” and all the red tape and regulations that come with it and remaining in the industry. But I persist. I remain positioned to provide you with virtually every available Medicare and health insurance product in your region.
In conclusion:
If you’re reading this, chances are you remember Jim Rockford (a private detective, portrayed by the actor the late James Garner) in his TV show, The Rockford Files (you can hear the opening music now, can’t you?). In the prelude to each episode, you see his cassette recording answering machine and hear the message, “This is Jim Rockford. At the tone, leave a message …”.
Should you get mine, please do the same. Or you may simply text me.
FORTUNE Richard Eisenberg Updated Mon, Aug 26, 2024
Why this year’s Medicare Annual Notice of Change will be vital reading for beneficiaries
In this article:
If you’re on Medicare, you’ll be getting one or two Annual Notice of Change letters in your mail or email this September about your 2025 coverage and costs. You may be tempted to ignore what looks like junk, as nearly a third of recipients do, according to an eHealth survey.
Don’t.
“So often, a person who is quite happy with their plan and doesn’t bother to look at their Annual Notice of Change then gets a nasty surprise in January” when the plan’s new costs and coverage kick in, says Danielle Roberts, author of 10 Costly Medicare Mistakes You Can’t Afford to Make and founding partner of Boomer Benefits, which sells Medicare policies.
What is an Annual Notice of Change?
An Annual Notice of Change from your Medicare Part D prescription drug plan or a private insurer’s Medicare Advantage plan lays out how much your premiums, deductibles, and co-pays will differ in the year ahead and whether the plan will even be offered. (Medigap plans don’t send these notices because they don’t change much year to year.)
An Annual Notice of Change from your Part D plan also says whether your prescriptions will be covered and, if so, how much you’ll pay. A Medicare Advantage Notice of Change will tell you if your doctors and hospitals will remain in the plan’s network.
While this information is always essential to make smart choices during Medicare’s eight-week open enrollment period (Oct. 15 – Dec. 7), experts say reading your Annual Notice of Change is especially important in 2024.
“There is an excellent chance that something is changing on your plan,” says Roberts. “This year, more than ever, we can expect big changes in the plans.”
Surprising effect of the $2,000 prescription drug cap
That’s largely due to a major Medicare change coming in 2025: the new $2,000 cap on out-of-pocket costs for prescriptions covered by a Part D plan.
Since Part D health insurers will be on the hook for more prescription costs due to the cap, they’ll be looking for ways to compensate.
That could mean higher premiums (currently $43 a month for stand-alone plans, on average, according to KFF), deductibles, and co-pays—possibly substantially higher than in 2024.
“I have been very, very concerned about what the $2,000 cap was going to do to Part D premiums,” says Roberts.
The prescription drug change in 2025 could also lead to your Part D plan no longer covering certain medications you take or raising prices of ones it will.
Medicare Advantage plans—some facing profit squeezes currently—often include Part D coverage, so they may respond to the $2,000 cap by trimming or eliminating benefits to keep their popular $0 premiums intact, experts expect.
As a result, your Medicare Advantage benefits that original Medicare can’t offer—such as dental, vision, hearing, and gym memberships—could be less attractive than in 2024, or possibly gone entirely.
“It really will be important to understand what’s changing in the coming year in my current plan and does the plan still fit?” says eHealth CEO Fran Soistman. “Does it still provide the value that it did when I elected to go in it in the first place?”
Reading and understanding the Notice of Change
Your Annual Notice of Change will tell you—if you can understand it.
Only 36% of Medicare beneficiaries surveyed by eHealth said their Annual Notice of Change letter is “readily understandable.”
Figure on spending about 30 minutes closely reading your Annual Notice of Change to see exactly what will be different in 2025 and whether you’ll want to switch plans or coverage next year as a result.
During open enrollment, you can switch from your current Part D plan to another, from your Medicare Advantage plan to another, from Medicare Advantage to original Medicare as well as from original Medicare to a Medicare Advantage plan.
But don’t feel compelled to switch plans just because your Annual Notice of Change says your premium will go up a little or a benefit will be trimmed slightly.
“If there’s a modest benefit decrease or premium increase, but they’re satisfied with what the carrier is providing, people shouldn’t make a change,” Soistman says.
However, he added, if a medication you take will no longer be covered or your physician or hospital won’t be in network, that’s an important change that may persuade you to switch coverage.
The Medicare Plan Finder on Medicare’s site will let you compare Part D and Medicare Advantage plans for 2025.
And, as Philip Moeller writes in the forthcoming revised edition of his book, Get What’s Yours for Medicare, if your Medicare Advantage plan won’t include your favorite doctor or hospital in its network in the year ahead, it’s legally obligated to work with you to identify other physicians or hospitals in its network that you’d like.
A new program to help avoid big premium hikes
To help prevent drastic Part D premium increases, the government’s Centers for Medicare and Medicaid Services recently threw a bone to health insurers with a premium-stabilization plan.
Medicare will provide a special subsidy to those insurers for 2025 in exchange for avoiding slapping members with exorbitant premium hikes.
“It should take what might have been a 40%, 50%, or higher premium increase down to probably 25%,” says Soistman. “It’s still going to be a bit of sticker shock when some people see how their premiums changed.”
Roberts says, “I’m still somewhat concerned about premiums, but I feel a little better after the stabilization program announcement.”
Getting help if your Medicare plan will change
After reading your Annual Notice of Change, you may want to get help deciding on the right Medicare plans for 2025 and to understand the implications of coming changes to your plans.
You can ask a Medicare broker or agent for assistance; there’s a directory at the National Association of Benefits and Insurance Professionals site. The sooner you do, the better, since agents and brokers will be swamped near the end of open enrollment.
“At Boomer Benefits, we have to stop taking new requests after Thanksgiving,” says Roberts.
If one of your prescriptions won’t be covered by your Part D plan in 2025, call your doctor to see if another covered medication would be okay or if you should find a new plan that includes it, Roberts advises.
For information about Part D and Medicare Advantage plans without purchase recommendations, try yourState Health Insurance Assistance Program or visit Medicare’s site or call Medicare’s toll-free number.
More time for open enrollment?
Soistman believes all the changes coming to Part D and Medicare Advantage plans for 2025 will push back the arrival of the Annual Notice of Change documents to the last two weeks of September.
If so, this will give people with the plans less time than normal to read the notices before open enrollment.
The eHealth agency has asked the Centers for Medicare and Medicaid Services to extend open enrollment by about five days to give beneficiaries, insurers, and Medicare brokers more time. Boomer Benefits favors the extension, too.
So far, the government hasn’t responded to eHealth’s proposal.
Could the 2025 open enrollment become Medicare’s equivalent of the Department of Education’s FAFSA financial-aid form fiasco of chaos and confusion?
“I don’t think it will be quite as drastic. I think it is going to be a year of change, though,” says Soistman. “And change is hard for people.” ********* Please follow me follow D. Kenton Henry @Https://HealthandMedicareInsurance.com
By D. Kenton Henry Editor, Broker, Agent 9 August 2024
For all Americans seeking to obtain or renew “Individual and Family” health insurance in 2025, there are (as always) certain changes to be anticipated.
Open Enrollment Period (OEP)—the period when all U.S. citizens may purchase health insurance for a January 1 effective date of the coming calendar year—runs from November 1st to December 15th. For those who, for whatever reason, want a February 1 effective date—the cutoff is January 15th. After that, a person must qualify for a Special Election Period (SEP). The most common of these is “loss of coverage through no fault of one’s own. During a SEP, an individual has 60 days to pick a plan. That plan will become effective on the first of the month after the date of the application.
To begin, let’s get the negatives out of the way.
THE NEGATIVE:
In 2025, ACA (Affordable Care Act) individual and family health insurance premiums are expected to increase by a median of 7%. This rise is driven by several key factors, including the increasing costs of hospital services, workforce shortages, and growing demand for high-cost specialty medications like GLP-1 drugs commonly used for weight loss and diabetes management (such as Ozempic). General inflation and healthcare provider consolidation are also contributing to these hikes.
Although most enrollees in ACA plans receive subsidies that will mitigate the impact of these increases, the cost burden on the federal government will grow as more funds will be needed to cover the subsidies. Insurers across the country are proposing premium increases that vary significantly, ranging from 5% to 10% on average, with some areas seeing rates fluctuate outside this range.
THE POSITIVE:
As we approach 2025, the Affordable Care Act (ACA) continues to evolve, aiming to address the shifting landscape of healthcare needs and to improve the accessibility and affordability of health insurance for individuals and families. The upcoming changes reflect ongoing efforts to enhance coverage, reduce costs, and ensure that more Americans have access to quality care. Here’s a comprehensive look at what you can expect from the ACA’s individual and family health insurance provisions in 2025.
1. Expanded Subsidies and Enhanced Affordability
One of the most significant changes coming in 2025 is the expansion of subsidies for health insurance premiums. Building on previous enhancements, such as those from the American Rescue Plan Act and the Inflation Reduction Act, the ACA will offer even more robust premium assistance. These expanded subsidies are designed to make health insurance more affordable for a broader range of income levels, particularly benefiting middle-income families who previously struggled with premium costs.
For 2025, the eligibility for premium tax credits will be extended, and the income thresholds for receiving assistance will be adjusted to account for inflation and rising living costs. This means that more individuals and families will qualify for financial help, reducing the burden of monthly premiums and making comprehensive coverage more accessible.
2. Increased Cost-Sharing Reductions
In addition to expanding premium subsidies, the ACA will also introduce enhanced cost-sharing reductions (CSRs). These reductions will lower out-of-pocket costs such as copayments, coinsurance, and deductibles for low- and moderate-income families. The aim is to make healthcare services more affordable at the point of care, not just in terms of monthly premiums.
The improved CSRs will be particularly beneficial for those who purchase coverage through the ACA marketplaces, ensuring that even the most essential health services, like prescription drugs and specialist visits, are within reach for more Americans.
3. Broader Coverage Options and Flexibility
The ACA will introduce more flexibility in plan design and coverage options starting in 2025. Health insurance plans available through the ACA marketplaces will offer a wider variety of coverage levels and network options, allowing individuals and families to choose plans that better match their specific needs and preferences.
For example, there will be more options for plans that cater to different health conditions or provide enhanced preventive care services. This diversification aims to address the diverse needs of the population and provide more tailored solutions to meet individual health requirements.
4. Enhanced Support for Mental Health and Substance Use Treatment
Recognizing the growing importance of mental health and substance use treatment, the ACA will place a stronger emphasis on coverage for these services in 2025. Insurance plans will be required to offer more comprehensive mental health benefits, including increased access to therapy, counseling, and substance use disorder treatment.
This change reflects a broader understanding of the integral role mental health plays in overall well-being and aims to reduce the barriers to accessing necessary mental health services.
5. Strengthened Protections Against Discrimination
The ACA will bolster protections against discrimination in health insurance. New regulations will ensure that insurers cannot deny coverage or charge higher premiums based on pre-existing conditions, gender, or other personal factors. Additionally, there will be greater oversight to ensure that insurance plans adhere to these non-discrimination policies.
These protections aim to create a more equitable healthcare system and to ensure that all individuals have fair access to health insurance, regardless of their personal circumstances.
6. Improvements to the Enrollment Process
The enrollment process for ACA health insurance plans will become more streamlined and user-friendly. In 2025, the federal and state-based marketplaces will introduce enhanced digital tools and support services to assist individuals and families with plan selection and enrollment. This includes improved online interfaces, more robust customer support, and clearer guidance throughout the enrollment period.
The goal is to reduce barriers to accessing coverage and to make it easier for people to navigate their options and secure the insurance that best fits their needs.
7. Emphasis on Preventive and Wellness Services
The ACA will continue to focus on preventive care and wellness services. In 2025, there will be increased incentives for health plans to cover preventive services without cost-sharing and to provide additional resources for wellness programs. This shift aims to encourage healthier lifestyles and early detection of potential health issues, ultimately reducing long-term healthcare costs and improving overall public health.
Conclusion:
The changes to the ACA’s individual and family health insurance provisions in 2025 represent a significant step forward in making healthcare more affordable, accessible, and equitable. With expanded subsidies, increased cost-sharing reductions, broader coverage options, and enhanced support for mental health, the ACA is set to offer even greater support to those in need. As these changes are implemented, individuals and families can expect a more supportive and responsive healthcare system that better meets their needs and helps them achieve better health outcomes.
*Please refer to Feature Articles 1 and 2 below the comments box for details on upcoming changes.
Whether you feel you qualify for an “Advanced Premium Tax Credit” (premium subsidy) or not, I can guide you through the process of determining such and enrolling in the plan of your choice for 2025. My years of experience specializing in medical insurance, including ever since ACA compliant plans became available on January 1, 2014, make the process go as quickly and smoothly as possible. Please contact me. There is no obligation to utilize my service and no charge for doing so. If you elect to acquire a policy I introduced you to, I only ask that you go through me to do so. You will be charged no more for the policy than if you walked through the front door of the insurance company and acquired it directly. I am currently appointed with every insurance company doing business in SE Texas; however, I represent you and your interests first and foremost.
THE KAISER FAMILY FOUNDATION (KFF) – The independent source for health policy research, polling, and news.
The independent source for health policy research, polling, and news.
Tammie Smith August 5th, 2024
Marketplace Insurers are Proposing a 7% Average Premium Hike for 2025 and Pointing to Rising Hospital Prices and GLP-1 Drugs as Key Drivers of Costs
ACA Marketplace insurers are proposing a median premium increase of 7% for 2025, similar to the 6% premium increase filed for 2024, according to a new KFF analysis of the preliminary rate filings. Insurers’ proposed rate changes – most of which fall between 2% and 10% – may change during the review process.
Although the vast majority of Marketplace enrollees receive subsidies and are not expected to face these added costs, premium increases generally result in higher federal spending on subsidies. The justifications insurers provide for these premium changes also shed light on what is driving health spending more broadly.
Insurers cite growing health care prices – particularly for hospital care – as a key driver of premium growth in 2025, as well as growing use of weight loss and other specialty drugs, according to KFF’s examination of publicly-available documents.
This year, increases in the prices insurers are paying for medical care tend to affect premiums more than growth in the utilization of care. Insurers say workforce shortages and hospital market consolidation, which can put upward pressure on health care costs and prices, are increasing 2025 health insurance premiums.
Meanwhile, growing demand for Ozempic, Wegovy, and other costly GLP-1 drugs, which are used to treat diabetes and obesity, is increasing prescription drug spending.
The full analysis and other data on health costs are available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.
One way insurers seek to control costs is to limit the size of the physician networks serving their plans. Providers agree to lower fees and other terms with insurers in order to be included in one or more of the networks they offer. Insurers then either limit coverage to services provided by network providers or encourage enrollees to use network providers through lower cost sharing. Reducing the number of providers in-network can effectively reduce plan costs, but it also limits enrollees’ choices, increases wait times, and can complicate the continuity of care for those switching plans. Enrollees receiving care from out-of-network providers often face coverage denials or substantially higher out-of-pocket expenses. These factors highlight how the size and composition of provider networks impact access to care and the financial protection insurance provides enrollees.
The breadth of provider networks in the Affordable Care Act (ACA) Marketplaces has been the subject of significant policy interest. Insurers often compete aggressively to be among the lowest-cost plans, potentially leaving enrollees with poor access. According to the 2023 KFF Survey of Consumer Experiences with Health Insurance, one in five (20%) consumers with Marketplace plans reported that in the past year, a provider they needed was not covered by their insurance, and nearly one in four (23%) said a provider they needed to see that was covered by their insurance did not have appointments available. Enrollees with Marketplace coverage were more likely than those with employer coverage to face these challenges. While the Centers for Medicare and Medicaid Services (CMS) establishes minimum standards for the adequacy of provider networks for Marketplace plans, insurers retain considerable flexibility in how they design networks and how many providers they include. As a result, the breadth of plan networks varies considerably within counties, presenting challenges for consumers who need to select a plan with little information on the network breadth of their options.
This brief examines the share of doctors participating in the provider networks of Qualified Health Plans (QHPs) offered in the individual market in the federal and state Marketplaces in 2021, and how network breadth affected costs for enrollees. The analysis uses data on the physician workforce, from 2021, matching that to provider networks in marketplace plans from the same year. Doctors filing Medicare Part B claims in or near each county are considered to be part of the active workforce available to Marketplace enrollees. Only doctors filing a claim and therefore known to have engaged in patient care in 2021 were included. The share of local physicians participating in a network is a rough measure of how much access enrollees have; depending on the number of providers in the area and the workloads of those physicians, enrollees in plans with similar breadths may face different wait times to book appointments. The share of local physicians participating in-network distinguishes whether enrollees have a broad or narrow choice of local doctors. Those in plans including a small share of doctors have fewer options when trying to find a provider with available appointments. See the Methods section for more details.
Key Findings
On average, Marketplace enrollees had access to 40% of the doctors near their home through their plan’s network, with considerable variation around the average. Twenty-three percent of Marketplace enrollees were in a plan with a network that included a quarter or fewer of the doctors in their area, while only 4% were in a plan that included more than three-quarters of the area doctors in their network.
Some of the narrowest network plans were found in large metro counties, where enrollees on average had access to 34% of doctors through their plan networks. Marketplace enrollees in Cook County, IL (Chicago) and Lee County, FL (Fort Myers) were enrolled in some of the narrowest networks (with average physician participation rates of 14% and 23%, respectively). Plans in rural counties tended to include a larger share of the doctors in the area, though rural counties had fewer doctors overall relative to the population compared to large metro counties.
On average, more than one-quarter (27%) of actively practicing physicians were not included in any Marketplace plan network.
On average, Silver plans with higher shares of participating doctors had higher total premiums. Compared to plans where 25% or fewer of doctors participated in-network, those with participation rates between 25% and 50% cost 3% more while those with participation rates of more than 50% cost 8% more. (Silver plans are midlevel plans in terms of patient cost-sharing and are particularly significant because they are the benchmark for federal premium subsidies.)
More than 4 million enrollees (37% of all enrollees) lived in a county in which the two lowest-cost Silver plans included fewer than half of the doctors in the area and a broader plan was available. In order for these enrollees to enroll in the cheapest Silver plan that included at least half the doctors, they would have needed to spend an additional $88 per month.
How Broad are Marketplace Plan Physician Networks?
On average, enrollees in the ACA Marketplaces had access to 40% of the doctors near their homes through their plan’s network. This share was similar for pediatric and non-pediatric doctors.
A quarter of enrollees were in plans where fewer than 26% of the local doctors participated in their plan’s network, while another quarter were in plans where at least 54% of local doctors participated.
There is no formal definition of what constitutes a narrow network plan. Some researchers have labeled plans covering fewer than a quarter of the physicians in an area as narrow. Under this definition, 23% of Marketplace enrollees were in a narrow network plan. About seven in ten enrollees (70%) were in a plan that included half or fewer of the doctors near their home. Only 4% of enrollees were in a plan that included at least three-quarters of local doctors, and 1% of enrollees were in a plan that included at least 85% of local doctors.
How Broad Are Plan Networks for Primary Care and Physician Specialties?
Even a plan with a relatively large share of local doctors participating in its network may not have enough doctors in different specialties to meet the needs of plan enrollees. In particular, enrollees with chronic conditions may look for plans that include their doctors across multiple specialties.
Primary Care Physicians: Marketplace enrollees, on average, had plan networks that included 43% of the primary care doctors in their area. A quarter of Marketplace enrollees had plan networks that included fewer than 25% of primary care doctors. More than half a million Marketplace enrollees were in a plan with fewer than 50 in-network primary care doctors near their homes. As is the case for physician networks overall, primary care physician networks tended to be narrower in large metro counties, where the average enrollee had a plan network that included 35% of local primary care doctors. While primary care doctors account for a smaller share of spending than specialists, they play an important role in insurers’ network design either by acting as gatekeepers to specialty care and referring patients to specialists.
Specialists: Marketplace plan networks tended to include a larger share of practicing medical and surgical specialists than primary care physicians. The average Marketplace enrollee had a plan network that included 52% of medical specialists and 53% of surgical specialists in their area; however, one-quarter of Marketplace enrollees had access to fewer than 34% of the medical specialists and 32% of the surgical specialists. On average, Marketplace enrollees had plan networks that included 21% of hospital-based physicians, which may include anesthesiologists, radiologists, pathologists, and emergency physicians.1 Information on additional specialties is available in the appendix.
Psychiatrists: Marketplace networks for psychiatrists were smaller. On average, Marketplace enrollees had access to 37% of the psychiatrists in their area through their plan.2 Twenty-five percent of Marketplace enrollees were in a plan that included 16% or fewer of the psychiatrists near their homes.
How Does Network Breadth Vary by Location?
Network breadth varied based on where plans were offered, with those in urban areas having lower physician participation rates, on average. In 2021, CMS designated county types based on their population and density; there are 78 Large Metro counties and 723 Metro counties. Most Marketplace enrollees lived in one of these urban county designations, including 38% in Large Metro counties and 48% in Metro counties.
Urban Counties: While Large Metro and Metro counties had more doctors, smaller shares of them participated in Marketplace plan networks compared to doctors in more rural areas. Marketplace enrollees in Large Metro counties, on average, had access to 34% of the doctors in their area through their plan networks, with a quarter enrolled in a plan whose network included fewer than 23% of local doctors. Marketplace enrollees in Metro counties, on average, had access to 42% of local doctors through their plan networks, while those in Rural counties, on average, had access to 52% of local doctors.
The 30 counties with the highest enrollment in the Marketplaces collectively represented 34% of all Marketplace enrollees and 21% of the U.S. population. These counties are typically urban and disproportionately in states that have not expanded Medicaid under the ACA.3
There was significant variation in network breadth across these 30 counties. Differences in average network breadth across these counties are the result of a combination of factors including the physician workforce, market characteristics, and insurer strategies. With networks with low provider participation rates, most Marketplace enrollees in Cook County, IL (Chicago) had access to fewer than one in six (14%) doctors in their area on average. Similarly, Marketplace enrollees in Lee County, FL (Fort Myers) and Fort Bend County, TX (outside Houston) had in-network access to less than a quarter of local doctors (23% and 24%, respectively). In contrast, some larger US cities had broader networks than those available in Houston and Chicago. For example, enrollees in Middlesex County, MA (outside Boston), Gwinette County, GA (outside Atlanta), and Travis County, TX (Austin) had in-network access to almost half of the doctors in their areas on average (46%, 46%, and 49%, respectively).
In 2021, 14% of Marketplace enrollees (1.6 million people) lived in four counties: Los Angeles, CA; Miami-Dade, FL; Broward, FL (Fort Lauderdale); and Harris, TX (Houston). On average, enrollees in each of these counties had in-network access to less than 4-in-10 local doctors (25%, 36%, 38%, and 25%, respectively).
High physician participation rates may not result in meaningful choice if there are few doctors in the area in the first place. For example, enrollees in Hidalgo County, TX (McAllen), on average, had access to 61% of local doctors through their plan networks, but this may have reflected chronic shortages in the number of practicing doctors in the county.4
Rural Areas: On average, Marketplace enrollees in Rural counties had access to about half (52%) of local doctors through their plan networks, higher than the average in more urban counties. The higher provider participation rates in rural areas, however, need to be considered in the context of the small number of primary care doctors and specialists practicing in these areas. For example, 2.9 million Marketplace enrollees in Rural counties had fewer than 10 dermatologists in their local area, 2.5 million had fewer than 10 gynecologists, and 1.7 million had fewer than 10 cardiologists in their plan networks. In some cases, these providers may already have full panels, and an enrollee’s choice may be even more limited than the number of physicians who accept the plan.
County Demographics: On average, Marketplace enrollees living in counties with a higher share of people of color had narrower networks than counties with a smaller share.5 The quarter of Marketplace enrollees living in the counties with the highest share of people of color had access to 34% of doctors in-network, on average, compared to 42% in counties with a smaller share of people of color. This difference may reflect the higher concentration of people of color in large metro counties, where plans typically had narrower networks.
How Much Choice Do Consumers Have Over Networks in the County Where They Live?
Provider networks vary within counties, meaning that individuals shopping for a Marketplace plan may have the option to enroll in plans with vastly different network breadths. In 2021, 70% of enrollees (nearly 8 million people) lived in a county where one or more plans covered fewer than a quarter of the doctors in the area. Among these enrollees, nearly 4.3 million (54%) also had the opportunity to enroll in a plan that included more than half the doctors in the area.
In the 30 counties with the most enrollment, enrollees could choose from about 8 distinct plan networks, on average. Even within the same county, enrollees may have access to vastly different shares of physicians in-network. For example, in Lee County, FL (Fort Myers), a quarter of Marketplace enrollees were enrolled in plans with networks that included fewer than 5% of local doctors, while a quarter were enrolled in plans with networks that included more than 45%. Similarly, in Travis County, TX (Austin), a quarter of Marketplace enrollees were enrolled in a plan with a network that included fewer than 36% of local doctors, while a quarter were enrolled in plans that included at least 70%. Consumers in these counties have the opportunity to enroll in plans with vastly different physician networks but often face higher premiums to do so. (See section “How is Network Breadth Related to Plan Premiums?” for details.)
Access to a “Broad” Network Plan: A large share of Marketplace enrollees (91%) lived in a county in 2021 where they could not choose a plan with a network that included at least 75% of doctors in their areas. Among the 30 counties with the most Marketplace enrollment, only two—Middlesex County, MA (outside Boston) and Hidalgo County, TX (McAllen)—had at least one plan network choice with a physician participation rate of 75% or more. In most cases, the broadest Marketplace plan network offered in these 30 counties was much narrower than this. For example, the physician participation rate for the broadest Marketplace plan network offered was 22% in Cook County, IL (Chicago), 38% in Hillsborough County, FL (Tampa), and 40% in Maricopa County, AZ (Phoenix). In these counties, shoppers were unable to enroll in a plan that covered at least half of the doctors in their community, even if they were willing and able to pay more.
Doctors Not Participating in Any Marketplace Network: Some doctors did not participate in any Marketplace plan network in 2021. On average, 27% of actively practicing physicians who submitted Medicare claims were not included in any Marketplace plan network offered to enrollees that year. This means that people transitioning to a Marketplace plan from another coverage source may not have been able to find any plan that included their doctor. In some counties, a much higher share of doctors did not participate in any Marketplace network, including Cook County, IL (Chicago), where 60% of doctors did not participate in any Marketplace plan networks, Dallas County, TX (36%), and Lee County, FL (Fort Myers) (41%).
How Visible Are Differences in Network Breadth to Plan Shoppers?
The difficulty of selecting an appropriate plan for a consumer’s health needs is heightened by the tremendous number of choices in many counties. The average Marketplace consumer had a choice of more than 58 plans (including 23 Silver plans) in 2021, a number that has since grown.6
Plan choices can involve different provider networks. For example, in Harris County, TX (Houston), consumers in 2021 had a choice of 87 plans that used seven different provider networks, with physician participation rates that ranged from 9% to 52%. However, these network differences are largely invisible to consumers. The lack of consumer tools to evaluate and measure plan networks can make it more challenging to choose a plan. Other than in a limited pilot operating in two states (Tennessee and Texas), the only tool available for HealthCare.gov consumers to evaluate a plan’s network is to search for individual providers, one by one, in directories, which may not always be up to date.
Further complicating the challenges of selecting plans, the marketing names of plans offered by the same insurer using different provider networks do not clearly indicate network differences. For example, AmeriHealth of New Jersey offers multiple Silver plans in Camden County, NJ. The narrow plan was marketed as “IHC Silver EPO AmeriHealth Advantage” (with a physician participation rate of 40%), while the broader network Silver plan was marketed as “IHC Silver EPO Regional Preferred” (with a physician participation rate of 74%). Based on these names, shoppers may not be able to discern that these plans had different networks with very different participation rates.
Shoppers can also search by plan type. The vast majority of Marketplace enrollees (84%) were in HMO or EPO plans in 2021, which have closed networks that generally do not cover non-emergency services provided outside of their provider network. A smaller share of Marketplace enrollees were in PPO plans (13%) and POS plans (4%), which provide some coverage for out-of-network care. The cost for such care can be quite expensive because out-of-network providers can sometimes balance bill and cost sharing for their services is typically higher and not subject to the annual out-of-pocket maximum.
Marketplace consumers seeking access to a broader choice of physicians and who have the choice of a PPO plan might assume such plan networks are analogous to the broad PPO networks offered to many in the employer market. On average in 2021, Marketplace enrollees who signed up for PPO plans had access to 53% of local doctors through their plan networks, compared to 37% for those enrolled in HMOs and 38% for those enrolled in EPO plans. However, plan type is not necessarily reflective of network breadth. In almost half (46%) of counties with both a PPO and either an HMO or EPO Marketplace plan, at least one HMO or EPO plan had a broader network than a PPO plan. Many Marketplace enrollees also did not have the option to choose a PPO plan: 60% of enrollees lived in a county in which only closed-network (HMO and/or EPO) plans were available.
Marketplace plans are categorized into metal levels based on the overall level of cost sharing required by the plans (deductibles, copays, etc.). In 2021, enrollees in Bronze, Silver, and Gold plans had access to similar shares of physicians in their areas (41%, 39%, and 44%, respectively). This is the result of issuers utilizing the same networks across metal levels within a county. In only 1% of counties did an insurer’s broadest Silver plan use a different network than its broadest Bronze plan.
HealthCare.gov has not yet widely released a consumer assistance tool to aid shoppers in filtering options by network breadth. Since 2017, CMS has operated a limited pilot with information on network breadth for consumers in Tennessee and Texas.7 Under this network transparency pilot, CMS provides measures of plan network breadth for hospitals, primary care providers, and pediatricians as an aid to Marketplace shoppers in those states. CMS calculates a participation rate by determining the share of providers participating in any Marketplace networks in the area. CMS then categorizes plan networks as “Basic” (0%-29%), “Standard” (30%-69%), or “Broad” (70%+), based on how many physicians participate in at least one QHP network. Whereas the denominator used throughout this analysis is physicians who submitted claims to Medicare, the CMS tool only considers providers that participate in Marketplace plans. Therefore, even plans with narrow networks in areas where most doctors do not participate in Marketplace plans could be labeled “standard” or “broad” using this method. For example, whereas 90% of physicians in Travis County, TX (Austin) who take Medicare participated in at least one Marketplace plan in 2021, only 64% of doctors in Dallas County, TX did. Therefore, a plan covering a quarter of all the available doctors in both counties would be considered a “basic” plan in Travis County, TX but a “standard” plan in Dallas County.
Generally, the method used in the CMS “network transparency” tool does not seem to facilitate comparing plan networks across counties and may exaggerate the breadth of plan networks, potentially leading some consumers to believe that their plan includes a larger share of local providers than it actually does. Under the CMS pilot method, only 16% of Marketplace enrollees in 2021 were enrolled in a plan that would be considered “basic”; this compares to 33% of Marketplace enrollees would be considered to be in a basic plan if the definition of local doctors used in this paper were applied.
Network Breadth by Plan Insurer
Marketplace shoppers may consider who the insurer is when making inferences about plan networks.
Blue Cross and/or Blue Shield (BCBS) plans are sponsored by a mixture of for-profit and tax-exempt insurers. While these companies are run independently, they are affiliated through an association, and many share a common heritage. In many states, the BCBS affiliates are the largest insurers participating in the Marketplace and may in some cases also be the largest insurers or administrators for employer-sponsored coverage as well. On average, enrollees in BCBS Marketplace plans in 2021 had access to 49% of doctors in their areas through their plan networks, a larger share than enrollees in plans offered by other insurers (35%).8 Even so, BCBS Marketplace plan networks, on average, excluded about half of the doctors available to those in traditional Medicare. Further, there was considerable variation in participation rates by doctors among plans sponsored by BCBS insurers, sometimes even within the same county. For example, in Wayne County, MI (Detroit), the Blue Care Network and Blue Cross/BlueShield plan network participation rates ranged from 20% to 59% across plan options. Similarly, in Camden County, NJ, Independence Blue Cross offered two networks, with physician participation rates of 40% and 74%. Florida Blue in Miami-Dade County, FL offered multiple plan networks with participation rates ranging from 25% to 51%.
Insurers Also Participating in Medicaid Managed Care: Insurers with a large presence in the Medicaid managed care organization (MCO) market also have a solid footprint in the Marketplaces. Overall, the breadth of Marketplace plan networks sponsored by MCO insurers was similar to that of insurers overall (41% vs. 40%, respectively).9 One of the largest MCOs that expanded into the Marketplaces is Centene Corporation, which sponsors plans under Ambetter, Health Net, and other brand names. The average participation rate for doctors in plan networks offered by Centene was lower than the overall Marketplace average (33% vs. 40%). Molina, another major MCO insurer offering Marketplace plans, had an average physician participation rate of 35% in its plan networks.
Integrated Delivery Systems: Integrated delivery systems, such as Kaiser Permanente, Geisinger Health Plan, and the Chinese Community Health Plan, institute a different approach to network design. Under these plans, health care financing and delivery are conducted by the same organization. Providers are typically employees of the plan or an affiliated medical group, and these plans generally do not cover non-emergency care provided by doctors outside of the network. Although enrollees in these plans may not have a wide choice of physicians in the area, these integrated models strive to improve access through care coordination and may be less complex for patients to navigate which providers are in and out of their networks. Enrollees in Kaiser plans, by far the largest integrated delivery system, on average, had access to about one in five (19%) doctors in their area. Of note, the breadth of Kaiser physician networks does not lower the overall Marketplace average substantially because only 7% of Marketplace enrollees nationally were enrolled in Kaiser plans.
Non-profit Insurers: On average, Marketplace enrollees covered by plans sponsored by non-profit insurers in 2021 had in-network access to 43% of the doctors in their areas, compared to 38% for those covered by for-profit insurers. Excluding enrollees in Kaiser health plans, enrollees covered by non-profit insurers had access to 47% of local doctors on an in-network basis on average.
How is Network Breadth Related to Plan Premiums?
On average, Silver plans with higher shares of participating doctors had higher total premiums. When compared to plans where fewer than 25% of doctors participated in-network, those with participation rates between 25% and 50% cost 3% more while those with participation rates of more than 50% cost 8% more. While other factors also contribute to plan premiums, including the breadth of hospital networks and the plan design, narrow physician networks were associated with meaningfully lower total costs. The average total premium for a 40-year-old enrolled in a Silver Marketplace plan in 2021 was $466 a month. For these enrollees to sign up for a Silver plan that included more than 50% of area physicians, their premiums would have increased $37 per month. The statistical model used to estimate these premium differences is described in the methods.
Enrollee Cost to Purchase a Broader Plan
Consumers with private health insurance generally consider the breadth of provider networks very important when choosing a plan, yet many remain price-sensitive when selecting plans with higher costs. A 2019 KFF/LA Times survey found that 36% of adults with employer coverage said the cost of the plan (premiums and cost sharing) was the main reason they chose their plan, while 20% cited the choice of providers.
One way to illustrate how the cost of broader plans is passed on to consumers is to consider the counties where enrollees face higher premiums for a broader plan. Most (90%) of Marketplace enrollees receive a tax credit to offset all or part of the cost of the monthly premium. The size of the premium tax credit available to enrollees is based on both household income and the cost of the benchmark plan, defined as the second-lowest-cost Silver plan. ACA enrollees are responsible for paying the entire amount between the cost of the benchmark plan and a higher-cost plan. Enrollees in counties where the benchmark plans have relatively low physician participation rates may need to pay a significant amount to enroll in a broad network plan.
Among Marketplace enrollees, 74% percent, or 8.5 million enrollees, were in a county where the two lowest-cost Silver plans had fewer than 50% of physicians participating in their networks. Of these, about half, or 4.3 million enrollees, did not have a Silver plan available to them that included at least half of the local physicians in its network; 4.2 million enrollees did have at least one such plan available to them. For those 4.2 million people, the average additional cost to enroll in a Silver plan with at least half the local doctors participating was $88 (for a 40-year-old).
One in five Marketplace enrollees (19%, or 2 million enrollees) lived in a county where the two lowest-cost Silver plans included fewer than 25% of local physicians in-network. Fifty percent of these enrollees, or 1 million enrollees, lived in a county where at least one plan included at least half the doctors. Among these enrollees, the cost to enroll in a plan with at least half the local doctors would have cost $95 more than the benchmark plan each month.
Implications for Consumers and Potential Federal Efforts to Increase Access to Care
Having a plan with a narrow network increases the chances that an enrollee receives care out-of-network, either inadvertently (e.g., receiving care from an out-of-network provider they did not choose at an in-network facility), or because they are unable to find an in-network physician at the time and place they need. It can also have consequences for enrollees’ ability to seek care in a timely fashion and their health. The 2023 KFF Survey of Consumer Experiences with Health Insurance found that 20% of adults with Marketplace coverage said that in the past year, a particular doctor or hospital they needed was not covered by their insurance. Among Marketplace enrollees who experienced this problem, 34% said that needed care was delayed, 34% said they were unable to get needed care, and 25% experienced a decline in health status.
Additionally, going out-of-network can be costly for enrollees. Enrollees using out-of-network providers may face higher cost sharing and balance billing if the services provided are not regulated by the No Surprises Act. Among those who indicated experiencing a network adequacy problem in the consumer survey, almost half (47%) said they ended up paying more out of pocket for care than expected, including 22% who said the additional cost was $500 or more.
Some have suggested that the design of the Marketplace encourages insurers to offer narrower networks compared to those included in employer plans in order to keep premiums down. Employers use health benefits to attract and retain workers and have an incentive to create broader networks that appeal to their workforce. One analysis found that primary care networks for large group plans were 25% larger than those found on the Marketplaces.10 The higher prevalence of narrow network plans corresponds to a greater share of enrollees facing challenges finding in-network providers. The 2023 KFF Survey of Consumer Experiences with Health Insurance found that adults with Marketplace coverage were more likely than those with employer-sponsored health insurance to report that a particular doctor or hospital they needed was not covered by their insurance (20% vs. 13%) (Figure 14). Additionally, 34% of Marketplace enrollees in fair or poor health reported that a particular doctor or hospital they needed was not covered by their plan, nearly two times more than those with an employer plan (16%). Similarly, a forthcoming KFF analysis of the 2022 National Health Interview Survey found that challenges finding doctors led some adults to delay or skip care (Appendix Figure 7). Those with non-group coverage, such as Marketplace plans, were twice as likely as those with employer plans to indicate that they had delayed or skipped care in the past year because they couldn’t find a doctor who accepted their plan (7% vs. 3%). Among those who visited a hospital or emergency room during the past year, 11% of non-group enrollees reported skipping or delaying care, compared to 5% of those with employer coverage.
Even still, network breadth is only one component of access to care and may not always gauge how well enrollees are served. There are many aspects consumers consider when selecting a plan. This analysis examines network breadth but does not address other standards that health plans, physician networks, and physicians are required to meet. Enrollees in plans with broad networks may still face challenges scheduling appointments and considerable wait times. For some specialties, such as psychiatry, workforce shortages make it hard for enrollees to find providers even in plans that include a broad swath of physicians. Workforce shortages in many rural areas mean that even if a plan has a broad provider network, there still may be an insufficient number of providers to meet the needs of that community. Furthermore, many enrollees face additional challenges using their plan, including stringent prior authorization requirements.
Similarly, a plan with a narrow network—measured as the share of physicians in the area participating—may still provide adequate access to care, just not necessarily with a broad choice of providers. States use a range of network adequacy rules, with many requiring the inclusion of different types of providers, but only ten evaluate wait times to determine if a network meets minimum standards. The ACA requires that Marketplace plans maintain networks sufficient in number and types of providers for the purpose of ensuring that all services will be accessible without unreasonable delay. Currently, federal network adequacy standards require that plans provide access to at least one in-network provider for 90% of plan enrollees living within certain time/distance thresholds (for example, in large metro areas, no more than 10 minutes or 5 miles from a primary care provider, or no more than 30 minutes or 10 miles from an oncologist.) Although these standards measure geographic proximity to in-network care, they do not measure network breadth. Additionally, starting in 2025, federal Marketplace plans will be required to meet maximum appointment wait-time standards (e.g., no more than a 15-calendar day wait for routine primary care appointments or 30 days for non-urgent specialty care appointments).
A central challenge in analyzing network breadth is the quality of available data. The inclusion of so-called “phantom providers”—physicians listed in the network but who are not actually available to plan enrollees at the location or in the specialty they are listed—may increase the apparent breadth of plan networks without actually increasing access to care. Federal laws and regulations require Marketplace plans to publish online an up-to-date and complete provider directory. However, CMS has found high rates of incomplete and inaccurate information in these directories. Additionally, the No Surprises Act Improvements in plan directory data would facilitate regulation and decrease the burden on consumers comparing and using the plan. In 2022, CMS solicited public comment on establishing a national provider directory that private plans could use as a database for their own plan directories. Further action on this proposal is still pending, but this could improve available information about the landscape of available providers, allowing for the development of improved consumer information about provider ratios that show the share of practicing area providers (overall and by specialty) included in the provider network of each QHP.
In addition to owning the first insurance agency in The Woodlands, Texas, and most of the United States, to create a website (Allplaninsurance.com) in 1995, I was among the first to offer Medicare Advantage and Medicare Part D Prescription Drug Plans (MAPD plans) to Medicare recipients following their creation by the Medicare Modernization Act of 2003. Congress created them to provide a lower premium insurance product as an alternative to Medicare Supplement policies, which has been the standard insurance product to serve as secondary insurance covering medical expenses not paid by Original Medicare. And—with premiums as low as $0—they have certainly done that. Contrary to what may be the common perception of the public, every good agent has a little bit of social worker in them and wants to think they have really helped a person and improved their situation. As an agent (before the advent of Medicare Advantage plans), I would sit across coffee tables from prospective clients living in single-wide trailers and subsisting on social security income alone. I would watch tears come in their eyes as they told me they simply did not have another dime to spend on insurance, leaving me to drive off and them no better off for my visit. So, from that standpoint, they have been a source of great relief for me as well as my clients.
In addition to lower premiums, MAPD plans offer other advantages. Specifically, they are:
The convenience of combining medical coverage with prescription drug coverage under the cover of one policy. Effectively eliminating the necessity of paying a second premium for the latter.
The provision of “extra” benefits such as dental, vision, and hearing benefits
“Guaranteed Approval” during the Annual Election Period October 15th and December 7th and the option of changing your plan each January 1 as the plans and your needs change.
Premiums are not age-based and do not increase due to age as one gets older.
Seniors are inundated with seemingly endless television and radio commercials promoting Medicare Advantage plans ad infinitum. But while they drive home the advantages mentioned above, they virtually never mention the disadvantages or compromises that come with electing them over a Medicare Supplement policy. There are many reasons for this, but this is the one most relevant to you:
Medicare, like Social Security, is hemorrhaging dollars. Please don’t take it from me. Google it. Financial prognosticators project it will enter a default position by 2031. Medicare trustees say the Part A (Hospital and Skilled Nursing coverage) program will begin running deficits again in 2025, drawing down the trust fund until it depletes in 2031. After that date, the program will not bring in enough money to fully pay out Part A benefits. *(See Feature Article 2 below.)
Now, we all know our government will just tax us more, and our treasury will print enough more money to keep things going. But the bottom line is that Medicare is seeking any way of saving money and limiting its losses. The easiest way to do this is to lower its share of claims. The easiest way to lower its share of claims is to increase enrollment in Medicare Advantage plans relative to Medicare Supplement. And why is that?
Opposed to Supplement, Advantage plans . . .
1)Force the insured member to share in more expenses as the medical claims come in.
2) They influence the member to utilize a limited network of providers or pay a higher cost for not.
3) They subject the member to preauthorization of medical tests and procedures, often resulting in significant delays in treatment. *(See Feature Article 1, 2 and 3 below.)
4)Advantage plans that combine prescription drug coverage with medical coverage (MAPD plans) lock the member into a drug plan that may not provide the lowest total cost for drugs or cover them in the first place.
5)Once a member foregoes Medicare Supplement in favor of an Advantage plan beyond 12 months, they may find themselves locked into an Advantage plan—and out of a Medicare Supplement plan—due to preexisting medical conditions for the remainder of their lives.
One reason for these differences in how things are covered is that when a person elects Medicare Advantage, their benefits and administration are assigned to the insurance plan and company issuing it and away from Medicare. Medicare no longer plays a role in your coverage. As Advantage plans are allocated a limited amount of dollars per plan member, the companies will seek to limit expenditures. Recent adjustments in budgets for the plans will result in more of this. *(See Feature Articles below.)
And now, we learn that in addition to the increasing number of denials for tests and procedures by Advantage plans, Medicare is allocating less money to cover benefits, resulting in an actual reduction in benefits in 2025. Depending on the Medicare Supplement plan option (A-N) one elects, these compromises seldom, if ever, apply to their coverage.
All this being said, we get back to affordability and the reality that Medicare Supplement premiums will increase due to the member’s age as the member ages. This could bring me back to that coffee table where clients simply can no longer afford their premiums. While their costs for treatment may increase, some will need a lower premium to afford some type of coverage. Those people should know I offer Medicare Advantage plans from virtually every major carrier in one’s county or region. These include (among others) Aetna, Anthem, AARP Unitedhealthcare, BlueCross BlueShield, Cigna, Kelseycare Advantage, and Wellcare.
Regardless of your situation, I offer whatever product is appropriate and best suited to meet your Medicare-related insurance needs. When you work with me, I will be an advocate on your behalf. I represent you over the insurance company. Yes, I still have a little bit of social work in me.
Please get in touch with me. I am waiting to answer your questions and assist you with your coverage.
Hospitals’ Medicare Advantage problem hits an inflection point
Jakob Emerson – 5 April 2024
The tensions between hospitals and Medicare Advantage plans continue to grow. With the program hitting nearly 34 million enrollees in March, paired with recent policy moves by the federal government, the scene has been set for those relations to worsen.
“The relationship between hospitals and managed care is strained at best right now,” Chip Kahn, president and CEO of the Federation of American Hospitals, told Becker’s. “[Insurers] are finding every way to not pay for the care that Medicare beneficiaries should receive. I don’t know how the issue gets worse — we’re at a critical stage, and I think CMS is sending those signals.”
On April 1, CMS finalized a slight decrease in MA benchmark payments for 2025. The agency has also issued more strict prior authorization rules this year and cracked down on when MA plans must cover inpatient care.
The health insurance industry has said the new rates will “put even more pressure on the benefits and premiums” of MA beneficiaries, a warning that individual insurers have also issued in recent months.
“Payers know that they’re going to have to cut supplemental benefits, and premiums may even have to go up, but I wouldn’t want to be the first one to do it,” Scott Ellsworth, founder and president at Ellsworth Consulting, told Becker’s. Mr. Ellsworth is a former insurance executive, overseeing entire divisions at Centene, Optum and a BCBS plan throughout his career.
“Seniors have seen their benefits get better every year, but now we’re at an inflection point and the free lunch is over,” he said. “There is going to be a sharing of the pain. Providers have disproportionately shared the pain and now you’re seeing many of them say ‘enough is enough, we’re out.'”
In 2023, Becker’sreported on at least 15 hospitals and health systems nationwide that dropped some or all of their Medicare Advantage contracts. Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers. Some systems have noted that most MA carriers have faced allegations of billing fraud from the federal government and are being probed by lawmakers over their high denial rates.
“It’s become a game of delay, deny and not pay,” Chris Van Gorder, president and CEO of San Diego-based Scripps Health, told Becker’s in September. “Providers are going to have to get out of full-risk capitation because it just doesn’t work — we’re the bottom of the food chain, and the food chain is not being fed.”
Scripps terminated MA contracts in January for its integrated medical groups, citing an annual loss of $75 million on its contracts with insurers.
In March, Bristol (Conn.) Health announced it was eliminating 60 positions, 21 of which are occupied and will result in layoffs. Its CEO, Kurt Barwis, laid blame on Medicare Advantage saying, “All the nice-to-haves are being taken out by the lack of insurance payment and the lack of reimbursement.”
In January, the Healthcare Financial Management Association released a survey of 135 health system CFOs, which found that 16% of systems are planning to stop accepting one or more MA plans in the next two years. Another 45% said they are considering the same but have not made a final decision. The report also found that 62% of CFOs believe collecting from MA is “significantly more difficult” than it was two years ago.
“Medicare Advantage net reimbursement right now is terrible for hospitals — our clients average about 85 cents on the dollar, and it’s only getting worse,” Mr. Ellsworth said. “MA is a race to the bottom, and I would argue that we’ve hit that bottom. Payers are going to struggle with this too, but no one wants to be the first to blink.”
Medicare Advantage denials increased almost 56% for the average hospital from January 2022 to July 2023, according to data from a joint American Hospital Association and Syntellis report. The denials and inconsistent reimbursement led to a 28% drop in hospital cash reserves.
Both Mr. Ellsworth and Mr. Kahn noted that it isn’t feasible for most health systems to completely walk away from Medicare Advantage, given that it now makes up more than half of the Medicare population. Instead, many hospitals are paring down contracts and looking for payer partners that align best with their financial objectives. Some systems are even exploring launching their own MA plan built in tandem with one insurer. Others have partnered with grocers or other health systems.
“We will ultimately pick a couple of partners going forward, and I think a lot of health systems are going to do this,” Will Bryant, CFO of Chapel Hill, N.C.-based UNC Health, told Becker’s in November. “They’re going to be the partners who act like partners and not who deny care in order to bolster their billions of dollars of quarterly earnings.”
Sachin Jain, MD, CEO of SCAN Group — one of the nation’s largest nonprofit Medicare Advantage companies — cautioned hospitals that dropping MA plans is a short-term trend that is “going to backfire in a big way for these large health systems.”
“You’re a nonprofit system saying you’re no longer going to accept the insurance that low-income people actually have,” he said. “We’ll see how that works out for you.”
Dr. Jain said any public policy program is going to create unintended consequences, adding, “What I would say to anybody who’s critical about the program is that you’re right, but let’s fix that.”
Former CMS Administrator Don Berwick, MD, toldBecker’s in February that the battle between hospitals and Medicare Advantage is a “manifestation of an underlying broken system in which everyone that gives care wants to give more, and everyone that pays for care wants to pay less.”
“To me, the untold story yet is about the physicians and nurses who don’t feel directly tied to ongoing Medicare Advantage trends, but they are certainly immersed in a changing financial landscape,” Dr. Berwick said. “As venture capital, private equity and ownership of healthcare by private interests increases, it changes their worlds, what it’s like to practice, their feelings about themselves, and the degrees of freedom they have to care for their patients. That chicken is going to come home to roost.”
Despite the tensions with hospitals, the MA program has bipartisan support in Congress and a 95% quality satisfaction rating among enrolled members in 2023. There are about 4,000 MA plans being offered this year nationwide, and MA members spend an average of $2,434 less on out-of-pocket costs and premiums per year compared to traditional Medicare enrollees.
“Medicare Advantage is very important, especially for low-income seniors,” Mr. Ellsworth said. “Hospitals need to acknowledge the reimbursement problem and proactively address their relationships [with payers] head-on.”
The fund covering Medicare‘s hospital-insurance benefits is now projected to run out of money in 2031, according to a new report by Medicare trustees.
This new insolvency date gives policymakers three more years than previously estimated to address impending financial setbacks that are facing the social safety net program, which provides health care benefits to tens of millions of Americans.
The ultimate insolvency date will likely change, the trustees say, due to difficulties in accurately projecting program expenditures. That leaves the exact timeline unclear for lawmakers to hash out a plan to mend Medicare’s finances, which could require an increase in taxes, a cut in benefits or a combination of both to keep benefits paying out in full.
What the report says
In a report released Friday, Medicare’s Board of Trustees provided the latest snapshot of the program’s finances. On the whole, Medicare is on sounder financial footing than indicated in last year’s trustee report, though financial shortfalls still loom.
Medicare hospital insurance benefits, aka Medicare Part A, are expected to fully pay out until 2031, a three-year improvement from the last trustee report.
Medicare Part B and Part D do not face insolvency, the report said, because they are funded separately — partially by premiums and general revenue from the U.S. Department of the Treasury. These benefits help cover typical health-insurance and prescription-drug expenses, respectively.
By contrast, Medicare Part A, which generally covers inpatient hospital care, skilled-nursing facility care, home-health care and hospice care, uses a separate reserve that’s funded by a 2.9% Medicare payroll tax. This is the trust fund at risk of insolvency.
In 2022, Medicare’s balance sheet looked better than previous years, the report shows. The hospital-insurance trust fund had a surplus of $54 billion, and Medicare overall brought in about $84 billion more than it paid out.
Nearly every year since 2008, the Part A trust fund has run a deficit, the report notes, with the exception of 2021 and 2022. The fund ran a steep shortfall in 2020 of more than $60 billion, largely because Medicare began making loans to health care providers to increase their cash flow as they grappled with the COVID-19 crisis. Then in 2021, providers began to repay Medicare, leading to the current surpluses.
The surpluses aren’t expected to last, however. Medicare trustees say the Part A program will begin running deficits again in 2025, drawing down the trust fund until it depletes in 2031. After that date, the program would not be bringing in enough money to fully pay out Part A benefits.
Key context
Medicare covered 65 million Americans last year. The vast majority of those people, about 88%, were 65 or older, though the program also provides health coverage to millions of disabled Americans.
Medicare — particularly Part A — has long faced financial issues. The nation’s changing demographic makeup is a big reason why. Because Medicare Part A relies on payroll taxes, it is more susceptible to insolvency when a growing share of the population is older, ultimately changing the worker-to-beneficiary ratio. In other words: less money coming in and more money going out. These demographic changes are also leading to insolvency issues for Social Security.
Compared to Social Security, projections for Medicare’s insolvency are less certain because it’s difficult for the trustees to accurately predict future health care expenditures. This can lead to some larger swings in the predicted insolvency date. By contrast to the trustee’s estimate, the Congressional Budget Office estimates the fund will remain solvent until 2033.
According to the nonprofit Center on Budget and Policy Priorities (CBPP), if Medicare Part A went insolvent, it would still be able to pay out almost all benefits. This leads some experts to call for tempered reactions to the newly projected insolvency date.
“Medicare does not face a financing ‘crisis’ and is not ‘bankrupt,’ as some critics charge,” tweeted Paul Van de Water, a senior fellow at the CBPP who specializes in Medicare. “Even if policymakers took no further action … tax revenues would still cover 89 percent of scheduled benefits” after the insolvency date.
Avoiding Medicare insolvency
Policymakers have several options to avoid impending insolvency headed for Medicare Part A. The trustees note two options that could immediately solve the issue:
The standard 2.9% payroll tax could be immediately raised to 3.52%, which would be enough to plug any financial shortfalls over the next 75 years.
In lieu of a tax increase, expenditures (read: benefits) would need to be reduced immediately by 13%, the trustees say.
Realistically, a combination of the two could work and the benefits cuts and/or tax increases could be implemented over a longer period of time.
Additionally, President Joe Biden released a plan last month to push the insolvency date back by 25 years.
The central change under the president’s plan would be a Medicare payroll tax increase on Americans earning more than $400,000.
Currently, earnings over $200,000 for individuals are taxed at 3.8% (while income under that amount is taxed at the standard 2.9% rate). These rates are split 50-50 between employees and employers.
The president’s plan introduces a new tier for income over $400,000, a tax rate of 5%.
The president’s Medicare proposal — part of a larger 2024 budget plan — is not expected to make it through the Republican-controlled House of Representatives.
Dozens of health systems ask CMS to crack down on Medicare Advantage Denials
Becker’s Hospital CFO Report
Rylee Wilson – Friday, March 22nd, 2024
Over 100 hospitals, health systems and providers signed on to a call for CMS to do more on Medicare Advantage denials.
Members of Premier, a healthcare services company, penned a letter to CMS administrator Chiquita Brooks-LaSure on March 21, requesting CMS collect more data on claims denied by Medicare Advantage plans and take enforcement action against plans not following the coverage rules set out by Medicare.
A survey of Premier’s member hospitals and health systems found 15% of claims to private payers are denied. A slightly higher portion of Medicare Advantage claims, 15.7%, are denied, according to the survey.
On average, hospitals spend $47.77 in administrative costs to appeal a denied Medicare Advantage claim, according to the Premier survey.
In the letter, the health systems asked CMS to monitor how much MA plans spent on direct patient care to address “potentially dire impacts on Medicare beneficiaries and providers.”
“It is imperative that CMS leverage its full authority to ensure that MA plans’ medical loss ratio (MLR) requirements for revenue used for patient care are satisfied in alignment with the benefits to which Medicare beneficiaries are entitled,” the providers wrote.
Dozens of health systems signed the letter, including CommonSpirit Health, Ascension, Advocate Health, AdventHealth and Providence.
The providers also asked CMS to bar MA plans from delaying or denying claims approved through electronic prior authorization and weight patient experience more heavily in its ratings of MA plans.
A growing number of hospital executives have criticized Medicare Advantage, often citing excessive prior authorization hurdles and delayed payments. A handful of systems have moved to drop the program entirely.
FEATURE ARTICLE 3
Nearly 15% of claims submitted to private payers are initially denied
Nearly 15% of medical claims submitted to private payers for reimbursement are initially denied, according to new survey data released Thursday.
Denied claims are more prevalent for high-cost treatments, with the average rejected charges at $14,000 and up, Premier Inc. reported. Medicare Advantage and other private payers eventually overturned more than half (54%) of denials, with the claims paid, but only after “multiple, costly rounds of provider appeals.”
The findings are from a national survey of hospitals, health systems and post-acute providers, conducted by the Charlotte-based healthcare improvement company.
“To address these potentially dire impacts on Medicare beneficiaries and providers, we urge CMS to stringently monitor MA plans’ reporting of expenditures on direct patient care,” Premier and 118 member organizations wrote in a March 21 letter to the head of the Centers for Medicare & Medicaid Services. “It is imperative that CMS leverage its full authority to ensure that MA plans’ medical loss ratio requirements for revenue used for patient care are satisfied in alignment with the benefits to which Medicare beneficiaries are entitled.”
Premier partnered with member hospitals to conduct the survey from October to December 2023. A total of 516 hospitals across 36 states, representing 52,123 acute care beds responded. Answers were based on claims submitted to private payers in 2022.
On average, hospitals and other providers incurred a cost of $43.84 per claim to fight denials. With insurers processing about 3 billion claims per year, this equates to $19.7 billion per year in expenses for these reviews. An average of about 3% of all claims denied included those that were already preapproved via prior authorization, Premier noted.
The continued burden from these delays and denials has impacted hospital finances. During the past year, average days of cash on hand at hospitals declined by 44 days or 17%. Meanwhile, days of cash on hand increased among insurers such as UnitedHealth Group (up 25.5% on average since 2019) and Cigna (24.4% on average).
The letter writers—who included numerous large health systems and other provider organizations—want CMS to take enforcement action against MA plans that “fail to abide by the coverage rules of Medicare.”
“Additionally, we note that CMS has moved away from holding MA plans accountable for [Consumer Assessment of Healthcare Providers and Systems] and other patient experience measures in recent rulemaking by reducing the weighting of patient experience and access measures in the Star Ratings program. We recommend that CMS return to its past policy of weighting patient experience and access measures more heavily in the MA Star Ratings methodology, empowering beneficiaries to hold their health plans financially accountable,” the letter stated.
The analysis does not specifically mention radiology services, but it mirrors ongoing problems imaging providers have had with prior authorization and the No Surprises Act (links to previous coverage below).
Ever since the passage of the Patient Protection and Affordable Care Act (ACA), commonly referred to as “Obamacare”, in 2010, the Department of Health and Human Services has dictated when and under what circumstances an individual and family can apply for and obtain health insurance. This period is known as the Open Enrollment Period, and it is upon us. Each year, between November 1st and December 15th, U.S. citizens and their families may apply for and obtain health insurance effective January 1st of the coming calendar year. From then until January 15th, they may apply for coverage effective February 1st. Beyond that date, they are locked out of any health insurance plan they were not enrolled in when the year ended. Only special circumstances such as losing “creditable” coverage through no fault of their own, moving out of a plan’s area, birth of a child, or death of a covered family member allow them to apply for coverage beyond the Open Enrollment Period. And only if they were insured when the special circumstance occurred and no more than 60 days have passed. Creditable coverage meets all the mandates of the Affordable Care Act, such as guaranteed coverage for pre-existing health conditions, including pregnancy and mental health disorders, along with no out-of-pocket for preventative medicine. All coverage is guaranteed so long as the above requirements are met.
If affordability of health insurance is an issue, Premium Tax Credits (subsidies) are available from the Department of Health and Human Services (DHS) to people or families whose income falls below a certain threshold.
WHO IS ELIGIBLE FOR THE PREMIUM TAX CREDIT?
To receive the premium tax credit for coverage starting in 2024, a Marketplace enrollee must meet the following criteria:
· Have a household income at least equal to the Federal Poverty Level (FPL), which for the 2024 benefit year will be determined based on 2023 poverty guidelines
· Can not have access to affordable coverage through an employer (including a family member’s employer)
· Can not be eligible for coverage through Medicare, Medicaid, the Children’s Health Insurance Program (CHIP)
· Have U.S. citizenship or proof of legal residency (Lawfully present immigrants whose household income is below 100 percent FPL can also be eligible for tax subsidies through the Marketplace if they meet all other eligibility requirements)
· If married, must file taxes jointly
Income: For the purposes of the premium tax credit, household income is defined as the Modified Adjusted Gross Income (MAGI) of the taxpayer, spouse, and dependents. The MAGI calculation includes income sources such as wages, salary, foreign income, interest, dividends, and Social Security.
Your tax credit is based on the household income estimate you put on your Marketplace application.
Income between 100% and 400% FPL: If your income is in this range (in all states) you qualify for premium tax credits that lower your monthly premium for a Marketplace health insurance plan. The lower your income is as a percent of the FPL—the higher your subsidy.
The easiest way to determine whether and for how much you qualify is to call me. You will estimate your 2024 household’s adjusted gross income and my subsidy calculator will tell us (based on the number of people in your household) how much your subsidy will be. If we give the DHS the same information you give me, my calculations are usually accurate to within $3.00 of what you will actually receive. We then apply that subsidy against the premium of the plan you wish to acquire and arrive at your net premium.
The number of people who qualify for subsidies continues to grow. For details on this, please refer to this chart and my feature article 2 below.
As to how much retail (gross) premiums are expected to grow from 2023 to 2024, estimates put the national average at 6%. (For the details on this, please refer to Feature Article 1 below.) Given the rate of core and real inflation, this should not come as a surprise. Acquisition of a subsidy will certainly offset ever-increasing premiums.
As always, the greatest challenge to the consumer and their agent/broker is affordability or obtaining the desired benefits. Instead, it is finding their doctors in the networks of a health plan. In 2024, as it was this year, there will be over 100 different plans available from six to eight different companies, depending on where one resides. Dealing with this myriad of options is where my three decades specializing in health insurance in the Houston area is invaluable. I know which hospitals are in which plan networks, and my provider search tools scan all plans without you having to go from company to company for results. Because I represent every company doing business in Texas, you can acquire information on all of them with one call to me.
Again, Open Enrollment begins November 1st, and for coverage during the entirety of 2024, it ends December 15th. Unlike going to the marketplace (Healthcare.gov) you will get me each time you call my local office with questions and for assistance and service–as opposed to an 800 number where you will get a different individual each time you call. My service is much more personalized and detailed than that of an hourly worker at the end of that toll-free number. If I don’t provide you with the level of service you deserve, I don’t have a client. And if I don’t have a client, I don’t earn a living. And it costs you no more to go through me than directly to the company whose policy you ultimately acquire.
I look forward to working with you and providing the best of service. Please call me.
D. Kenton Henry
Office: 281-367-6565 Text me 24/7 @ 713-907-7984 Email: Allplanhealthinsurance.com@gmail.com
This analysis of insurers’ preliminary rate filings shows that ACA Marketplace insurers are requesting a median premium increase of 6% for 2024. Insurers cite price increases for medical care and prescription drugs as a key driver of premium growth in 2024, In addition to inflation’s impact on medical costs, insurers point to growth in the utilization of health care, which fell in 2020 but has since returned to more normal levels.
Insurers’ proposed rate changes – most of which fall between 2% and 10% – may change during the review process. Although most Marketplace enrollees receive subsidies and are not expected to face these added costs, premium increases could result in higher federal spending on subsidies.
The analysis can be found on the Peterson-KFF Health System Tracker, an information hub dedicated to monitoring and assessing the performance of the U.S. health system.
Enhanced Marketplace subsidies have continued to drive up enrollment in the individual market, and the loss of Medicaid coverage by millions of people could contribute to this trend, according to a new KFF analysis. Meanwhile, enrollment in non-ACA-compliant plans is at a record low.
As of early 2023, an estimated 18.2 million people have individual market coverage, the highest since 2016. Individual market enrollment grew by about 29% between early 2020 and early 2023 — a result of enhanced subsidies introduced by the Inflation Reduction Act, increased outreach, and an extended enrollment period.
This enrollment growth could continue in 2023 as states resume Medicaid disenrollments amid the unwinding of the continuous enrollment provision. Some of the people losing Medicaid coverage may be eligible for subsidies on the ACA Marketplaces.
Due in part to the enhanced subsidies, about 4 in 5 individual market enrollees have subsidized coverage — the highest share since the ACA was implemented.
The number of people in non-compliant plans has fallen each year and could decrease further due to the Biden Administration’s proposed rule that would reverse the expansion of short-term plans. An estimated 1.2 million people were in non-ACA-compliant plans in mid-2022, compared to 5.7 million in mid-2015. These short-term plans often do not include certain benefits or coverage for pre-existing conditions and can impose a dollar limit on insurance coverage.
If unsubsidized premiums rise in 2024 due to higher health care prices and utilization, enhanced subsidies could shield most individual market enrollees from increases in their monthly payments.
*(IF YOU WATCH TV, YOU HAVE SEEN THE HIGH-PROFILE COMMERCIALS FOR THESE DRUGS. IF YOU’VE BEEN PRESCRIBED ANY OF THEM, YOU KNOW HOW HIGH THE COST CAN BE. FOR MANY, PROHIBITIVELY SO. FOR DETAILS ON HOW RELIEF MAY BE COMING, PLEASE READ THE FEATURE ARTICLE AT THE BOTTOM OF MY OWN JUST BELOW.)
IT’S ALMOST TIME TO RE-SHOP YOUR MEDICARE ADVANTAGE AND DRUG PLAN FOR 2024
By D. Kenton Henry, editor, broker, agent
6 September 2023
With the Labor Day holiday behind us, summer is virtually over. And, the coming of fall brings Medicare’s Annual Election Period (AEP). For those new to Medicare, and as a reminder to those recipients who are not, this period runs from each fall. Beginning October 1, we can preview the new Medicare Advantage and Part D drug plans to determine which, if any, is superior to our current plan, and from October 15 to December 7, enroll in it. Our new plan selection will go into effect on January 1. Of course, if your current plan remains your best option, you need not do a thing, and it will roll right over into the new year. Simply continue to pay your premium.
But how will you know if a superior Medicare Advantage or Part D Drug plan exists for you in the coming year? First, your current drug plan owes you an Annual Notice Of Change (AOC). It must come in your U.S. mail by September 30. If they do not send it, they violate Medicare regulations. So be sure to watch your mail closely. I know we are all being inundated with advertisements this time of year in a frenzied attempt to garner our business, but sort through it long enough to find your AOC!
Then, please review it carefully. While it may remain virtually the same in the coming year, something inevitably changes. Be it the premium, the copays, the out-of-pocket maximum, the doctors and hospitals, or the drugs. Once you are aware of any changes, you must compare your plan to all the new plans in the new year. Or – you may simply call me. I have been in the medical insurance industry since 1986, specializing in Medicare-related insurance and Under Age 65 Individual and Family health insurance. As I and my clientele have grown older, I have focused even more on assisting Medicare recipients.
Researching and identifying a plan that is in my client’s best interest and making my recommendation is an annual service I provide them. While some can do it independently, my familiarity with all the options and the mechanisms for exploring and enrolling in them is so great that many find it easier to sit back and let me do the research for them. Then, if they agree with my recommendation, I am happy to enroll them, making the process go as quickly and smoothly as possible. There is no obligation to take my recommendation, nor is there any fee charged by me whether one does or doesn’t. Should you enroll through me, you will be charged no more for the product than if you walked through the front door and acquired it directly from the insurance company offering it. So I believe you get the benefit of my 37 years of experience in the market at no cost to you. While Medicare requires that I inform you, no one agent can represent every company and plan in the market, I do represent most. I have diligently researched which plans I believe will be most competitive for most people’s purposes and have studied and certified (tested) to be able to insure you with them. And more importantly, I have reviewed all of them relative to your needs before making my recommendation. On the rare occasion I am not appointed (contracted) with a company in your best interest, I will recommend them just the same and encourage you to enroll with them and advise you how to go about that. I do so in the hopes that it will begin a relationship with you and that – next year – I may be appointed with the company with which you wish to enroll.
So, while the leaves don’t fall much around here in October, they do turn brown. And Joe Willy Namath and J.J. Walker will soon be annoying you with their incessant and infernal commercials. Let these things remind you to call me for the answers to your Medicare-related questions and any guidance you would like. Remember, there is no cost to you for such, and, at the very least, you’ll know you are doing everything right and make another friend in the process.
Oh – again! Please read my feature article, which appears directly below this. The current administration is attempting to lower drug costs for Medicare recipients by allowing Medicare to negotiate lower drug prices, for the first time, with pharmaceutical companies. The article identifies 10 of the most expensive drugs they target for lower costs. If you, like me, have been exposed to the never-ending drug commercials accompanying your television programs, you probably can already guess what some of them are. Obviously, advertising works, and the companies must pay for it somehow!
Drugs Up for Medicare Price Cuts Fuel Drugmakers’ Legal Strategy
Ian Lopez: Senior Reporter
Nyah Phengsitthy: Reporter
Drugmakers are poised to change their lawsuits and bring new ones against the Biden administration now that the list of the first 10 drugs subject to Medicare price negotiations is out.
Bristol-Myers Squibb Co., Johnson & Johnson, and other companies with drugs up for negotiation are likely to amend their lawsuits against the price talks under the Inflation Reduction Act to better their chances at taking down the program, legal analysts say.
Amending complaints could bolster the plaintiffs’ chances at overcoming government arguments that they lack standing to sue and allow them to later move for summary judgment or request a preliminary injunction.
Companies like Amgen Inc. and Novo Nordisk that have drugs on the list but haven’t sued yet may do so, or join suits already filed, attorneys say, contributing to a pharmaceutical industry legal strategy geared toward getting the US Supreme Court to intervene.
“Now that the list is announced, we’ll definitely see movement in the lawsuits, because beforehand it was a little more of a theoretical harm,” said Carmel Shachar, a professor at Harvard Law School. “I think we’ll see a big flurry of action when the prices are announced as well, with attempts to hold it up with injunctions and summary judgment.”
Drugmakers and industry groups that sued before the release of Medicare’s list issued statements afterward that they remain steadfast in their position that the price negotiation program is unconstitutional. Eight lawsuits were filed before the list announcement. Another company with a drug on the list, Novartis AG, sued after.
“The IRA’s price control provisions will constrain medical innovation, limit patient access and choice, and negatively impact overall quality of care,” J&J said. “The IRA’s policies put an artificial deadline on innovation, threatening intellectual property protections and shortening the timeframe to deepen our understanding of patients’ unmet medical needs. At the same time, seniors could face bureaucratic barriers to access and potentially higher out of pocket costs even with the IRA’s out-of-pocket cost limits for Part D drugs.”
Attorneys note that some of the lawsuits may be scaled back with the list out, while others are expanded to encompass new claims. Some judges may try and consolidate the litigation, the attorneys say.
They also note that more drugmakers may push courts for a preliminary injunction against the program to buy time while the litigation inches its way to the highest court.
“They’re not going to give this up quietly,” said Yaniv Heled, a professor at Georgia State University College of Law. “You can expect to see lawsuits, and then appeals, and then more lawsuits and then more appeals.”
‘Fight to the Bitter End’
The 10 drugs selected for pricing negotiations are Bristol-Myers and Pfizer Inc.‘s Eliquis, J&J’s Xarelto, Boehringer Ingelheim and Eli Lilly & Co.‘s Jardiance, Merck & Co. Inc.‘s Januvia, AstraZeneca PLC’s Farxiga, Novartis’ Entresto, Amgen’s Enbrel, AbbVie Inc. and J&J’s Imbruvica, J&J’s Stelara, and Novo Nordisk’s Fiasp and NovoLog insulin products.
Pfizer said it wouldn’t be leading negotiations over Eliquis’ list price and that the task would fall to Bristol-Myers. Eli Lilly similarly said the company “will not have any role in whatever price is set” by Medicare for Jardiance.
Novo Nordisk said it “will explore all options that allow us to drive change for people that need it and strive to continue to bring innovative medicines to the market while helping increase access for those that need them,” though it took issue with the government’s approach. Likewise, AstraZeneca said it would “evaluate our next steps over the coming weeks.”
Merck filed the first lawsuit to block the negotiations in June, followed by suits by other drugmakers and their allies, arguing the program was unconstitutional or violated procedural requirements for implementation.
They’re awaiting a decision from Judge Michael J. Newman of the US District Court for the Southern District of Ohio on the U.S. Chamber of Commerce’s request for a preliminary injunction—an ask that could halt the program before negotiations even begin.
The Chamber asked the court to rule before the Oct. 1 deadline when drugmakers must decide if they will enter negotiations. The group said the Biden administration didn’t do its “homework” to understand price control schemes and is rushing for implementation.
“They had a year to research these basic questions,” Neil Bradley, the Chamber’s executive vice president and chief policy officer, said in a press call.
Drugmakers who’ve already filed lawsuits will “fight to the bitter end,” Heled said.
“I can’t imagine that the litigations are going to end before these prices are supposed to take hold or go into force,” Heled said.
Drug manufacturers on the list will also “definitely” want to amend their complaints, said Laura Dolbow, a fellow at the University of Pennsylvania Law School who specializes in administrative law.
Companies may also amend their complaints to include additional causes of actions, said Andrew Twinamatsiko, associate director of the Health Policy and the Law Initiative at Georgetown University’s O’Neill Institute. For example, plaintiffs arguing the program violates the First, Fifth, and Eighth Amendments of the Constitution may consider raising Administrative Procedure Act claims like those in recent lawsuits from AstraZeneca and Boehringer Ingelheim.
Drugmakers “could find a creative way of going around” the drug pricing law’s preclusion of judicial review of prices, he said.
More constitutional claims could emerge, and the courts could have a “remarkably large number of potential avenues to consider,” said Robin Feldman, a law professor at the University of California, San Francisco.
“What are they not claiming?” Feldman said. And “lawsuits already filed have named more constitutional provisions than most people knew existed.”
‘No Standing’
Astellas Pharma Inc., which filed a suit July 14, ended up with none of its products on the list. Legal experts expect Astellas’s case to be dismissed.
The drugmaker said in a statement that no decisions have been made regarding its lawsuit, but it remains confident in its stance that the program “would result in lower costs for the government, but not necessarily reduce out-of-pocket costs for patients.”
The case brought by trade group Pharmaceutical Research and Manufacturers of America also faces possible dismissal.
The Biden administration filed a motion to dismiss the PhRMA suit in the US District Court for the Western District of Texas a day before the list came out, specifically asking that the National Infusion Center Association be dismissed because it lacks standing and failed to allege that the federal program will cause any of its members an injury.
The actions drugmakers with products on the list take now could affect what other manufacturers will do in the future, said Nicholas Bagley, a law professor at the University of Michigan. The experiences of the drugmakers in the first round of negotiations could set the precedent for price talks in later rounds.
“If you’re a manufacturer who doesn’t have a drug listed, you’re likely to sit back and watch these other litigants,” Bagley said.
By D. Kenton Henry editor, agent, broker 12 October 2022
In a year in which the annual inflation rate is over 9%, and the core inflation rate over 6%, there is some good news relative to Medicare Part D 2023 Drugs and Plan costs. And it comes just in time as the approximately 64 million Americans on Medicare will be electing their drug coverage during the “Annual Election Period” from October 15th through December 7th, for coverage to begin January 1.
While Medicare Part A (hospital and skilled nursing facility) coverage has been paid for during the working careers of most Americans or their spouses, Part B (out-patient coverage) has not. Medicare accesses an income-adjusted monthly premium based on a “two-year look-back at one’s income tax return. (for details refer to Chart 1, and Feature Article 1, below)
The base premium for individuals earning $97,000 or less, and couples filing jointly earning $194,00 or less, will be down $5.20 per month from $170.10 to $164.90.The Medicare Part B out-patient deductible will be down $7.00 from $233.00 to $226.00 in 2023. Although these decreases are nominal, to say the least, they are a move in the right direction.
The “not as good news” is that Part A Inpatient hospital costs to the beneficiary will be increasing. The inpatient hospital deductible is going to $1,600 for each admission – due to a different medical condition – or the same medical condition separated by 60 days or more.And the daily coinsurance for days 61-90 is going to $400 and for lifetime reserve days to $800. It is easy to see that most can ill afford to be liable for the cost of an extended hospital stay without supplemental coverage, such as Medicare Supplement or Medicare Advantage, to pay these expenses. (for details, refer to Chart 2 below)
Relative to Medicare Part D Prescription Drug Plans, the headline subject of this article, the best news is probably not that premiums are actually decreasing for many of the approximately 30 plan options available. Surveys show that Americans are more concerned about the price of their drugs than their plan premiums. So, more good news is that the cost of insulin – which has historically created something of a hardship for dependent diabetic patients – will be limited to a $35.00 monthly cap on insulin copays for Part D enrollees. In addition, all vaccines recommended for adults by the CDC will be available at no cost.
If not reversed, even greater cost savings are scheduled for 2024 and beyond. Here are some of the highlights:
2024
i) Part D enrollees entering the “catastrophic” phase of coverage will not owe any additional copays for the year. In other words, they will have 100% coverage.
ii) Part D premiums will be capped at a maximum price increase of 6% annually through 2029. Additionally, the government will expand eligibility for financial assistance.
2025
i) Out-of-pocket Medicare drug costs will be capped at $2,000 each year.
ii) Additionally, Part D enrollees will be able to spread out copay costs over the entire year, preventing hardship created by extremely high one-time bills.
2026
This will be the first year Medicare will be permitted to negotiate the cost of drugs. This will be limited to 10 drugs in 2026, increasing to 60 drugs by 2029.
These proposed changes all sound encouraging. Let us hope they survive to fruition. In the meantime, it is my job to assist my clients, and prospective clients, in identifying their lowest “total” cost Part D Drug plan for each calendar year. While people get fixated with monthly premium, one’s lowest total cost is the sum of their plan’s premium + any deductible due before their drugs become available for copays or coinsurance + their copays or coinsurance. We are seeking the lowest sum. It can be a tedious and confusing task for many and I assume that task for any client or prospective client requesting assistance.
For 2023 plan marketing, Medicare mandates I post the following disclaimer:
While I offer most, “I do not offer every plan available in your area. Please contact Medicare.gov or call 1-800-MEDICARE to get information on all your options.”
That being dispensed with, permit me to add – When someone requests I research the market for their lowest “total” cost drug or Medicare Advantage Plan, I not only employ proprietary software, but I utilize Medicare’s own data to make my recommendation. So rest assured, I have thoroughly reviewed all their options in the market before making my recommendation.
I do not charge a fee for my services. If you do not take advantage of my recommendation, you are out of nothing but the time we have spent together in arriving at it. However, if I introduce you to an insurance product, and you elect to apply for it, I only hope you will go through me to do so. You are not obligated to. Then, and only then, will I be compensated directly by the insurance company whose product you elect. The key to you is – you will pay no more premium for that product than if you were to walk in the front door of that company and purchase it directly from them. All companies in the Medicare Part D and Medicare Advantage market pay me the same so my objectivity is assured. Therefore, I like to think, you gain all the expertise my 36 years in the industry has to offer you at no additional charge. This is as opposed to a different person each time at the end of a toll-free number. I encourage you to take advantage of my offer and I look forward to establishing a working relationship with you.
D. Kenton Henry
All Plan Med Quote
Https://TheWoodlandsTXHealthInsurance.com Https://Allplanhealthinsurance.com Https://HealthandMedicareInsurance.com Office: 281-367-6565 Text my cell 24/7 @ 713-907-7984
CMS: Medicare Part B Premiums, Deductibles Will Decrease in 2023
Monthly Medicare Part B premiums will fall to $164.90 in 2023, marking a $5.20 decrease from this year, while Part A premiums are set to increase by $4 to $7.
September 27, 2022 – Medicare Part B premiums and deductibles will decrease in 2023, while Part A costs will rise, according to a fact sheet released by CMS.
Medicare Part B offers coverage for physician services, outpatient hospital services, certain home healthcare services, durable medical equipment (DME), and other medical services not covered by Medicare Part A.
The standard monthly premium for Part B enrollees will be $164.90 compared to $170.10 in 2022. The annual deductible will be $226, decreasing $7 from $233 in 2022.
Individuals with Medicare who take insulin through a pump supplied through the Part B DME benefit will not have to pay a deductible starting on July 1, 2023. In addition, cost-sharing will be capped at $35 for a one-month supply of covered insulin.
In 2023, Medicare beneficiaries who are 36 months post-kidney transplant can choose to continue Part B coverage of immunosuppressive drugs despite no longer being eligible for full Medicare coverage. These individuals will have to pay a monthly premium of $97.10 for immunosuppressive drug coverage.
Medicare beneficiaries with incomes greater than $97,000 will have higher Part B premiums. For example, monthly premiums will range from $230.80 to $560.50 for high-income beneficiaries. Similarly, monthly immunosuppressive drug coverage premiums will vary from $161.80 to $485.50 for high-income beneficiaries.
The While Part B costs will decrease in 2023, Part A costs are set to increase.
Medicare Part A offers coverage for inpatient hospital services, skilled nursing facility care, hospice care, inpatient rehab, and home healthcare services.
The Medicare Part A inpatient hospital deductible for beneficiaries admitted to the hospital will be $1,600 in 2023, rising from $1,556 in 2022. This deductible covers beneficiaries’ share of costs for the first 60 days of inpatient hospital care.
For days 61 through 90 of hospitalization, beneficiaries will have to pay a coinsurance amount of $400 per day, up from $389 in 2022. Past 90 days, the coinsurance will rise to $800 per day. The daily coinsurance for individuals in skilled nursing facilities will be $200 for days 21 through 100 of extended care services, up from $194.50 in 2022.
The majority of Medicare beneficiaries do not have to pay a Part A premium because they have worked at least 40 quarters in their life, the fact sheet noted. However, for those who have not, 2023 premiums are increasing.
Individuals who have at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage will have a Part A monthly premium of $278 in 2023, compared to $274 in 2022.
Individuals with less than 30 quarters and those with disabilities will have to pay the full 2023 premium of $506 per month, which is $7 higher than in 2022.
The fact sheet also shared 2023 information on Medicare Part D costs. Premiums for Medicare Part D, which offers drug coverage, vary from plan to plan. Around two-thirds of beneficiaries pay premiums directly to their plan, while the other third have their premiums deducted from their Social Security benefit checks.
Beneficiaries with incomes above $97,000 must also pay an income-related monthly adjustment amount in addition to their Part D premium. The amounts will range from $12.20 to $76.40 for high-income beneficiaries.
September 02, 2021 – The Alliance of Community Health Plans (ACHP) is urging the federal government to take action and lower prescription drug prices with a set of recommended actions.
The costs of prescription drugs continue to rise each year, but policymakers have done little to address it. ACHP’s list of suggestions ranges from increasing drug pricing transparency to expanding the use of biosimilars.
Catastrophic Medicare Part D prescription drug spending has been on the rise for over a decade. Seniors do not have an out-of-pocket cap for Medicare Part D, which can leave them with high costs in the catastrophic phase.
ACHP’s first recommendation is to redesign the Medicare Part D benefit including creating an out-of-pocket healthcare spending cap for seniors and to ensure that consumers will not owe anything during the catastrophic phase. Drug companies should also have to assume financial responsibility for each Part D phase and take some of the pressure off of Medicare.
Medicare should also receive resources to allow the program to negotiate lower drug prices for their beneficiaries, ACHP suggested.
ACHP’s next recommendation was for the federal government to allow the US Department of Health and Human Services (HHS) to negotiate prices for expensive prescription drugs that have no generic or biosimilar competition. These drugs were responsible for 60 percent of Part D spending in 2019, the fact sheet noted.
Currently, HHS has no power over competitive drug pricing.
Policymakers should also extend price negotiation to the commercial market to keep drug companies from shifting costs to non-Medicare consumers.
High-cost drugs that face no competition should also have an International Pricing Index applied that will limit the price to no more than 120 percent of its average international market price. The previous administration supported a similar approach through its Most Favored Nation model, but the Biden administration has proposed to rescind that model.
ACHP also urged the federal government to increase the use of biosimilars by informing clinicians and patients of the products and by persuading the Federal Trade Commission to increase biosimilar presence on the drug market. There are 29 FDA-approved biosimilars that are more affordable than other prescription drugs, but less than 12 are available on the market.
Increasing reimbursement rates for biosimilars could also improve utilization, the fact sheet stated.
ACHP’s suggestions also targeted drug companies’ unjustifiable raising of drug prices. At the beginning of 2021, 735 drugs prices increased up to 10 percent without reason.
Prescription drug prices often increase faster than the inflation rate, therefore ACHP recommended that drug manufacturers should have to provide rebates for drug price increase above the inflation rate.
Drug companies should also have to follow a price transparency rule that would require manufacturers to report and justify price increases, ACHP stated.
One example is the FAIR Drug Pricing Act, introduced in the Senate in 2019 and referred to the Committee on Health, Education, Labor, and Pensions. This Act would require drug manufacturers to notify HHS and submit a transparency and justification report 30 days before increasing the price of certain drugs by more than 10 percent.
Lastly, the ACHP recommended that the federal government encourage the use of transparent fee-based pharmacy benefit managers (PBMs). Traditional PBMs are typically not transparent about rebates, which can encourage high-cost drug use, whereas transparent fee-based PBMs pass rebates and discounts onto payers and earn revenue through a clear administrative fee.
Payer organizations have turned to the federal government to get prescription drug prices under control, as pharmaceutical companies are not budging.
In January 2021, AHIP called on the Biden Administration to focus on solutions that would protect Americans from higher drug prices.
The issue is pressing, not only for the seniors on whom some of ACHP’s recommendations focused but for all Americans. AHIP reported that the highest portion of commercial health insurance premiums goes toward prescription drug costs, making prescription drug pricing a widespread concern.
healthandmedicareinsurance.com 
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