Op-ed by D. Kenton Henry Editor, Broker 21 March 2022
Greetings from TheWoodlandsTXHealthInsurance.com, deep in the heart of The Woodlands, Texas, for 31 years now!
The “Annual Election Period” (AEP), when Medicare Recipients can change their Part D Drug Plans or enroll in a Medicare Advantage Plan, has closed for 2022. As always, it will reopen October 15th and run through December 7th, for a January 1 effective date. So (minus extenuating circumstances), people are locked into their existing drug and Medicare Advantage Plans for the remainder of the calendar year.
During these AEP’s – when I am inundated with clients who instruct me to shop for their best plan for the coming calendar year – I am also asked, by many, to reshop their Medicare Supplement Plan. This in spite of the fact that I can reshop their Medicare Supplement Plan 365 days of the year! I suppose it’s a combination of not knowing this about Supplement plans and their simply being “out of sight … out of mind” until the AEP when every TV and radio ad is telling them to call for the Medicare benefits “they’re entitled to”!
The first reality is – all Medicare Supplement premiums increase as we age. Couple this with cost increases within Medicare itself – which are inevitably passed on to premiums – and it behooves us to reshop our Medicare plans periodically. I recommend every two to three years.
The second reality is – outside the AEP – January 1 until October 15th – I am in a much better position to give the proper and utmost attention to my clients, and prospective clients, and ensure I am getting them approved for a Medicare Supplement plan for which:
1) they can realistically be fully approved without a rate-up in premium
2) which provides them benefits equal to or appropriate for their needs and
3) saves them significant premium dollars
Things which might provide further incentive to apply for replacement coverage are:
1) they are now eligible for a “household discount” (typically 7%)
2) they are now in Medicare Supplement Plan F and realize conversion to Plan G will save them such significant premium savings it easily offsets the liability for the Part B calendar year out-patient deductible they will have to meet. Or . . .
3) they wish to save even more and apply for Plan N
Before proceeding to take an application, I make it abundantly clear to a prospective applicant that, now that they are more than six months past their date of enrollment in Medicare Part B – they no longer qualify for “Guaranteed Issue.” This means every applicant must qualify based on their health history. The process entails answering health-related questions and providing physician and prescription drug medications. The thing that most often results in an application being declined for issue is a pending or anticipated surgery or hospital stay. Absent these, if a person’s health issues are relatively controlled with medication, or otherwise – and their weight is relatively proportionate to their height – they stand a good chance of being approved. In which case, I would encourage them to apply for replacement coverage. At that point, the only thing at risk is the time it takes to complete an application. The worst case is a declination, which doesn’t preclude you from being approved at a later date. It is not like a derogatory remark on a credit report!
In conclusion (for those of you old enough to remember and – if you are on Medicare – you are!) now is a time when I am a bit like the “Maytag Repairman”. In other words, with the exception tending to my prospects just turning age 65 and aging into Medicare, I am sitting around waiting for the phone to ring. (smiling emoji)
I hope to hear from you, so please refer to my contact information just below. Aside from this, please read my feature article which follows immediately. It is relevant to all Medicare recipients but especially to those currently enrolled in Medicare Advantage primarily for the purpose of consolidating supplement coverage – such as dental and vision – with their medical insurance. Changes could well be coming.
D. Kenton Henry Office: 281.367.6565 Text my cell 24/7: 713.907.7984 Email: Allplanhealthinsurance.com@gmail.com
https://TheWoodlandsTXHealthInsurance.com https://Allplanhealthinsurance.com https://HealthandMedicareInsurance.com
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FEATURE ARTICLE:
BNN BLOOMBERG
Mar 15, 2022
Medicare Watchdog Warns of $12 Billion in Excess Payments
John Tozzi, Bloomberg News
(Bloomberg) — Medicare Advantage is leading the U.S. government to spend billions more on seniors’ medical care than it should and needs a significant makeover, a nonpartisan watchdog said in a report to lawmakers.
The program collected $12 billion in “excess payments” in 2020 over what the U.S. would have paid to cover people who used the private plans under standard Medicare, according to a report by the Medicare Payment Advisory Commission, or MedPAC, released Tuesday.
Medicare has offered some private-sector version since the 1980s, and the current program, called Medicare Advantage, is nearly two decades old. It allows insurers to sell plans that provide Medicare benefits along with add-ons like dental or vision coverage. That can eliminate the need for consumers to purchase supplemental insurance that picks up costs not covered by Medicare itself.
However, MedPAC said swelling costs could threaten the sustainability of Medicare and a major overhaul of the popular program is urgently needed. The program paid Medicare Advantage plans $350 billion last year, MedPAC said.
Enrollment in Medicare Advantage plans has doubled over the past decade to cover nearly half of Medicare’s 64 million beneficiaries, fetching billions for large insurers including UnitedHealth Group Inc., Humana Inc. and CVS Health Corp.’s Aetna unit that have bet heavily on the business.
It has also given rise to an ecosystem of smaller companies eager to cash in, such as tech-focused insurers like Clover Health Investments Corp. and Alignment Healthcare Inc., and clinics that cater to seniors on the plans, including Oak Street Health Inc. and Cano Health Inc.
Many of those companies have seen their shares suffer recently due in part to concerns that it will be more difficult to make profits from the business than investors had once expected.
Appropriate Pressure
MedPAC, established in the 1990s to advise lawmakers on Medicare policy, has long warned about excess Medicare Advantage payments. Private plans are on pace to cover half of all Medicare beneficiaries next year, according to the latest report, and MedPAC said they should be pushed to pare costs.
Medicare Advantage plans “need to face appropriate financial pressure” in line with providers in the traditional fee-for-service Medicare program, the group said.
According to the report, excess payments are driven by plans getting paid more money by the government for taking care of sicker members. Each month, Medicare Advantage plans receive U.S. funds based on the health of their enrollees. For years, MedPAC and other authorities have claimed that insurers manipulate the system to pump up their revenue.
“These policy flaws diminish the integrity of the program and generate waste from beneficiary premiums and taxpayer funds,” MedPAC wrote. The commission said it supports having private plans as an option for Medicare members, but said they have never saved Medicare money.
Industry Backlash
Trade groups such as America’s Health Insurance Plans and the Better Medicare Alliance have disputed MedPAC’s criticism in the past. They say that the program provides better care than traditional Medicare.
Insurers say Medicare Advantage can eliminate the need to buy additional coverage to paper over gaps in the traditional program, and provide other important benefits like meal delivery or transportation. The plans can also cap out-of-pocket costs, which can be unlimited in Medicare without extra coverage.
Payments to Medicare Advantage plans for extra benefits have increased by 53% since 2019, MedPAC said, “yet we have no data about their use nor information about their value.”
The commission acknowledged that Medicare Advantage plans can deliver lower-cost care. Yet the savings don’t accrue to taxpayers or others in the program, the commission wrote.
“These efficiencies are shared exclusively by the companies sponsoring MA plans and MA enrollees, in the form of extra benefits,” the report said.
©2022 Bloomberg L.P.
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