The Med Diva

An insider's guide to Medicare Part D and more

Archive for the category “Healthcare Reform”

Just the Facts, Ma’am: Don’t Believe Everything They Say About ACA and Medicare

ImageShortly after 10 a.m. last Thursday, I heard one of my coworkers shout out, “The individual mandate has been shot down. CNN reports that the Supreme Court has found it unconstitutional. Thank goodness!”

I hadn’t checked the news yet, but I got this feeling of dread. Oh no, I thought. How are we going to explain to all these Medicare beneficiaries that they may have just lost all the extra benefits they received under the Affordable Care Act? What a mess this is going to be!

Luckily, I didn’t take my coworkers’ announcement as set in stone and fret all day. Instead, I decided to do some due diligence and read the news for myself. I went to MSNBC.com and read that the Supreme Court had upheld the Affordable Care Act in its entirety. I then read the same news on several other reputable news and healthcare sites. Finally, I did some checking and found out that both CNN and Fox had erred in their initial reporting.

Now, it is very rare that a major news outlet jumps the gun and gets it so wrong. In fact, New York Times reporter Charlie Savage called it a “Dewey defeats Truman” moment for this 21st century. However, the point I really want to make is then when it comes to important information that can affect you, it pays to play detective and do your own research to confirm the facts—or what passes as facts these days.

AARP survey: People are sick and tired of non-factual ‘attack’ ads

Speaking of “facts,” for the past few years—although it seems more like forever—there have been a lot of rumors going around about Medicare and Social Security. These rumors often rear their ugly head in political ads, and from what I’ve been seeing and reading, it’s only going to get worse as we get closer to the November elections.

A new voter survey of 1,001 registered voters by AARP of Washington shows that voters are “sick and tired of negative and misleading political ads, and most are misinformed or unaware of what’s behind the spin.” According to the survey, 79 percent of those polled agree that it is difficult to determine if claims made in TV ads are correct.  But only a third of the respondents said they know that it is NOT a violation of federal law for candidates to use deceptive or misleading statements in political advertising.

Other survey findings:
• 98% said Social Security is important to financial security
• 97% said Medicare is important to health
•  81% agree that politicians are “trying to make too many decisions behind closed doors regarding Social Security and Medicare”
• Only 8% think “most or all of political television ads” have given “objective, factual information about an issue or candidate”
• 13% understand that the contents of political advertising are not regulated by any government agency

Don’t be fooled by ads about Medicare and Social Security

Kathleen Hall Jamieson, a University of Pennsylvania political communications expert, tells AARP members to watch out for ads that play on fear, use emotional images or music, or in any way distract them from thinking critically about what it being said. “There is deception on both sides, and you might be deceived by your own side,” Jamieson tells the AARP.

Jamieson suggests three ways voters can inform themselves:
• Watch the candidate debates.
•  Read, watch and listen to news reports that cover all sides of issues.
• Check politicians’ claims by visiting nonpartisan fact-checking websites such as PolitiFact.com, FlackCheck.org and FactCheck.org.

Some Medicare beneficiaries with employer-sponsored Rx benefits could get the boot in 2013

Medicare beneficiaries get the bootFor what seems like forever, everyone has been talking about the Affordable Care Act (healthcare reform) and whether the Supreme Court is going to strike it down or Republicans are going to repeal it. While no one knows for certain what is going to happen, I can tell you this: Many employers are planning ahead and thinking about dropping retiree prescription drug coverage in 2013 or later.

If healthcare reform is in, the Retiree Drug Subsidy may be out

Under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), employers that sponsor group health plans with drug benefits to retirees can receive a subsidy equal to 28 percent of covered prescription drug costs for their retirees. The MMA established this subsidy, called the Retiree Drug Subsidy, or RDS, to encourage employers to continue offering prescription drug benefits to their retirees rather than require them to get their benefits through Medicare.

Currently these subsidies from the government are tax-free for employers. However, under the ACA, corporations will have to pay taxes on the RDS starting January 1, 2013. (The law will not affect organizations that are not required to pay taxes.)

In response to this potential “increase” in cost of providing retiree drug coverage, some employers are considering eliminating these retiree benefits. According to a 2010 Medicare Trustees Report, about 20 percent of Medicare beneficiaries received their prescription drug coverage through an employer under the RDS program in 2009. As a result of healthcare reform changes, “RDS program participation is assumed to decline quickly to about 2 percent in 2016 and beyond.”

What are your options if your employer drops Rx coverage?

Although not all employers who provide retiree drug benefits participate in the RDS program, it has been a very popular choice. For example, in 2006, 82 percent of sponsors with 1,000 or more employees accepted the RDS.

So keep in mind that:
• If your employer participates in the RDS program, and
• If the ACA survives the Supreme Court or Republican knife, and
• If your employer decides to cut off your prescription drug benefits

The following three things can happen:

1. Your employer can simply drop retiree prescription drug coverage and  suggest you enroll in a Medicare Part D plan on your own.

2. Your employer can seek the help of a Medicare insurance exchange to help you choose a Medicare plan that best meets your needs.

3. Your employer can enroll you in another group benefit called an Enhanced Group Waiver Plan, or EGWP for short. An EGWP is a group Medicare prescription drug plan that, in most cases, provides benefits at least equal to the drug benefits you are receiving through your employer’s current health plan.

Of course, all of the above may be a moot point if the ACA is struck down and the tax deduction for RDS remains in place.

Why women (and men) with Medicare should know about shrinkage

Important Facts about Medicare Part D for 2013

If you’re a fan of Seinfeld, you must remember this classic dialog from the 1994 Hamptons episode, in which George’s girlfriend catches him naked after he gets out of the cold swimming pool:*

Jerry, George Costanza: Elaine!
Jerry: Do women know about shrinkage?
Elaine: What do you mean, like laundry?
Jerry: No, like when a man goes swimming afterwards.
Elaine: It shrinks?
Jerry: Like a frightened turtle!
Elaine: Why does it shrink?
George Costanza: It just does.
Elaine: I don’t know how you guys walk around with those things.

Although I’m going way out on a limb here, I like to think that the Medicare Part D Coverage Gap is also undergoing shrinkage. Albeit, not quite like a frightened turtle – more like a threatened millipede starting to coil up into a ball.

How the donut hole is shrinking

While the entire country is debating whether or not the Patient Protection and Affordable Care Act (ACA) is constitutional, the Medicare Coverage Gap, also called the donut hole, is getting smaller under the public’s radar.

As a result of the ACA, eligible prescription drug plan enrollees who are not Dual Eligibles will pay only 47.5 percent of the costs of covered brand-name drugs in 2013. That’s down slightly from 50 percent this year. If you use generic drugs in the gap (and you should whenever possible), your cost sharing will shrink to 79 percent, from 86 percent in 2012. The Coverage Gap will continue to close a little bit each year, until beneficiaries will pay only 25 percent for both brand-name and generic drugs if they reach this stage.

2013: Three strikes and you’re out

I’m writing this while listening to the Yankees play Tampa Bay on Opening Day, so I couldn’t resist the headline. Basically, what this means is that in 2013, the Centers for Medicare & Medicaid Services (CMS) will alert plan members if their Medicare Part D drug plan or Advantage (Part C) health plan has failed for three years in a row to receive at least 3 out of 5 stars from CMS. If the plan has three strikes, CMS will offer a special enrollment period to allow those members to move to a higher quality plan.

What you will pay for Part D in 2013

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directs CMS to update the parameters for the standard Part D drug benefit each year. These parameters include the standard deductible, initial coverage limit, catastrophic coverage threshold, and minimum co-payments for costs incurred in the Catastrophic Stage.

Following are the 2013 Part D parameters for the defined standard benefit:

  • Deductible: $325  ($320 in 2012)
  • Initial Coverage Limit: $2,970  ($2,930 in 2012)
  • Out-of-pocket threshold: $4,750  ($4,700 in 2012)
  • Minimum cost-sharing for generic/preferred multi-source drugs in the Catastrophic Phase: $2.65  ($2.60 in 2012)
  • Minimum cost-sharing for other drugs in the Catastrophic Phase: $6.60  ($6.50 in 2012)

*The Internet Movie Database

IMDb

Coming soon to a theater near you: Son of the Medicare Donut Hole

Like the Blob, the Medicare Donut Hole can consume you.

The dreaded Medicare Coverage Gap will return if Obamacare goes away

Remember the movie Beware! The Blog (also called Son of Blog), the 1972 sequel to the horror science-fiction film The Blob? In this film, a rapidly-growing mass of red ooze returns to prey upon a small town, consuming everything and everyone in its path.  

I hate to say it, but sometime in the near future the Blob may return again, this time to consume all those new Medicare benefits made possible by the Affordable Care Act, aka, Obamacare. Like all those low-budget horror films of the 1970s, a sequel to Obamacare—be it by way of Republican repeal or Supreme Court decision—could be pretty scary and rotten for many people.

For the past few months, Mitt Romney has been going around the country telling supporters that he vows to repeal healthcare reform on Day One of his presidency. I’m not going to get into the irony of this promise or bring up any other political views here, but suffice it to say that most Republicans are in favor of doing away with both Obama and his administration’s Affordable Care Act. Mind you, repealing the law entirely would be a very difficult and lengthy process, but let’s assume it could happen.

We also have to watch out for those nine men and women in black. Starting today, the Supreme Court will begin hearing three days of arguments over the constitutionality of the healthcare reform law. There are three ways the Supreme Court could rule: It could uphold the law, strike down parts of the law, or strike down the whole law.

If there’s a sequel to Obamacare, the Blob may very well return – albeit, in the shape of a donut hole.

Under the Affordable Care Act, the donut hole is shrinking each year until it closes in 2020. Right now, 3.5 million seniors and disabled citizens with Medicare Part D coverage pay less for prescription drugs when they reach the Coverage Gap. Thanks to the ACA’s Coverage Gap Discount Program, Medicare beneficiaries have already saved an estimated $3.2 billion on prescription drugs. In addition, every senior now receives free preventive-care visits under Medicare Part B.

As Vice President Joe Biden recently told a group of seniors in Florida, if the law is appealed or struck down in its entirety, the donut hole will return and you can say good-bye to free preventive care visits. 

If you would like more information about all the benefits you are entitled to with Medicare under the Affordable Care Act, check out this short video from the Patients Aware campaign.

This campaign was created by the National Committee to Preserve Social Security and Medicare Foundation, the Herndon Alliance, and the National Physicians Alliance to help seniors understand the new Medicare benefits available to them through the Affordable Care Act.

It’s not as exciting as Son of Blob, but it helps show why Obamacare is not the horror show some people want us all to believe.

Extend Health: A Pure-Play Medicare IPO to Consider

I’m going to go slightly off message today and discuss a new initial public offering (IPO) of stock that caught my attention today.  The reason this IPO interests me is because the company is one I’m quite familiar with: Extend Health Inc.

Unlike Medicare plan sponsors such as Medco Health Solutions (MHS), Aetna (AET), or WellPoint (WLP), Extend Health is more of a pure-play Medicare company. It also stands to benefit greatly from healthcare reform.

Extend Health, which bills itself as a health benefit management company, is actually a private healthcare exchange that helps retirees find Medicare plans that meet their needs and budgets. In effect, it is very similar to the health insurance exchanges mandated by the Patient Protection and Affordable Care Act. 

Extend Health helps employers transition Medicare-eligible retirees from group-based, defined benefit plans (those sponsored by the employer) to individual, defined contribution health plans. According to the Securities and Exchange Commission (SEC) filing, Extend Health serves more than 30 Fortune 500 company clients and offers more than 4,000 health plans on its exchange. It generates most of its revenue from commissions it receives from insurance carriers for enrolling individuals into these plans.

According to a registration statement filed with the SEC, Extend Health hopes to raise about $75 million through the IPO. Extend Health’s proposed ticker symbol for the New York Stock Exchange is XH.

Please do your own due diligence

Keep in mind, I am not a financial expert and I do not have any authority to recommend or disapprove a stock. However, because I work in the Medicare industry, I do know a lot about retiree health benefits. So here’s something I can share with you: Due to a little-known provision of healthcare reform that affects Medicare Part D retiree drug subsidy payments to employers in 2013, more employers will be dropping retiree healthcare coverage this year and seeking alternatives. One alternative will be to seek the services of a company like Extend Health to help transition retirees into Medicare.

Whether you like to play the stock market or you’re a retiree with group health benefits who is (or will soon be) Medicare eligible, you may want to become familiar with Extend Health and the services it offers.

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