The Med Diva

An insider's guide to Medicare Part D and more

Archive for the tag “Open Enrollment”

The Blind Leading the Blind: Anatomy of a Medicare Part D Monthly Premium

At least once a week one of my coworkers on our Medicare Part D team will come to me with what they think is a simple job. ‘I just need you to write a short apology letter. It should be simple,” Karen will tell me. “I have a simple project for you. All you have to do is edit this web page for Medicare Open Enrollment,” Tina will say. “We just need to ‘Medicarize’ this brochure, so it will be simple,” Chris will state.

Inevitably, I always respond, “Nothing is simple with Medicare Part D.” And then as what appeared to be an easy project becomes more complex with each new logistical problem that arises, I say, “I told you so.”

One of the most complicated “parts” of Part D – and thankfully, one that I have absolutely nothing to deal with – is what we call the annual Medicare bidding process. As our director of actuarial services notes, the process of bidding on Medicare prescription drug plans is a lot like putting together a giant puzzle. When the puzzle is completed, you end up with a monthly Part D premium of $32.07 or $41.29 or some other odd amount that seems completely random.

Unlike the commercial insurance market where providers set the premiums for a plan, Medicare Part D premiums are determined as part of a blind bidding process that begins in June of each year. Every Part D provider submits bids to the Centers for Medicare & Medicaid Services (CMS) without knowing what the competitors will offer. Then CMS sets premiums based on how the bids average out. Premiums may vary from what providers submitted depending on what their competitors bid and how they differ from expectations.

A few large competitors dominate the marketplace, so the ability to predict premiums, profitability and potential membership growth requires an educated guess as to how other Part D providers will bid. The guesswork can be quite complex and requires a detailed understanding of trends and potential growth strategies in the marketplace.

For example, is a large Part D provider going to try to maximize profits by bidding a higher number or are they looking to increase membership and so plan on submitting a lower bid to CMS? Data and historical trends are helpful, but it’s really more of an art than a science when it comes to making a good bid that has competitive premiums and features that Medicare beneficiaries want in a Part D plan.

During the next two months, CMS will thoroughly review each bid. In August, CMS will release the bid results, giving marketing departments and employees like me just barely enough time to create all the plan materials and marketing communications for Medicare Open Enrollment in mid-October.


Picking a Medicare Part D Plan is not that confusing, but it can be aggravating!

Picking a part D plan can be aggravatingYesterday, I came across an article on the Healthcare Savvy blog titled “Picking a Medicare Part D Plan Is Not as Confusing as They Say.” The author made some valid arguments based on statistics, but I just had to reply to let him know that I beg to differ with him on several points.   

According to the author, although Medicare beneficiaries have numerous Part D plans from which to choose, it really isn’t that difficult to pick a plan once you break them down into three categories:

  • Plans for those who don’t take any drugs
  • Plans for those who take only a few lower-cost generic drugs
  • Plans for those who take numerous or expensive drugs, and therefore end up in the Coverage Gap

 I’m not going to get into the details here (you can read the article for more info if you’d like), but the problem with this theory is that it only looks at one part of the equation, and that is the cost. Yes, if you just look at overall costs it’s fairly simple to pick a Part D plan. The thing is, if you really want to get the most value for your Medicare dollar—and receive high-quality customer service that leaves you feeling satisfied rather than frustrated—there are a few other things to consider.  For example:

  • You should always make sure your drugs are covered under the plan’s List of Covered Drugs (Formulary).  The Medicare Plan Finder can help you find plans that cover your drugs, but I do know for a fact that for someone who takes multiple medications, it can be very time-consuming (and not always easy) to find a plan that will cover them all.
  • Although the author of said article disagrees with me on this point, I always tell people to choose a plan with a high star rating from the Centers for Medicare & Medicaid Services. The star ratings measure everything from customer service issues such as call wait times to clinical issues such as adherence rates for members taking diabetes and hypertension medications. Starting in 2015, CMS will begin terminating the contracts of Part D and Part C sponsors that fail to receive at least a 3-star (average) rating for 3 years in a row—so if you choose a low-rated plan, you may end up having to switch plans in two years. To me, that’s a hassle.
  • If you take a lot of medications—or several expensive medications—you may want to find a plan that can help you lower your prescription drug costs and delay entering the Coverage Gap. For example, plans with home delivery can often save you a lot of money if you choose that option. Unfortunately, not all plans have a home delivery service.

So no, it really isn’t difficult or confusing to pick a Part D plan during Medicare Open Enrollment, especially with online tools like the Medicare Plan Finder. But if you’ve been in a plan that meets all your needs for years and find out you have to leave because of low star ratings—or because the plan decides to raise prices or remove some of your drugs from the formulary—than it becomes an aggravation. Plain and simple.

Medicare Extends Open Enrollment Period For People Affected By Sandy

Breaking News for Hurricane Sandy and MedicareI just got some good news from The Medicare News Group for Medicare beneficiaries who are still coping with damage from Hurricane Sandy in the northeast:

The Centers for Medicare & Medicaid Services (CMS) has extended the December 7 deadline to enroll in a private medical or prescription drug plan for next year if you have been affected by Hurricane Sandy.

According to CMS, beneficiaries hit by the storm can still enroll after the midnight Dec. 7 deadline if they call Medicare’s 24-hour information line,1-800-Medicare (1-800-633-4227).  Representatives will be able to review available plans and complete the enrollment process with them over the phone. Medicare officials have not set a new deadline but are encouraging beneficiaries to make their decisions soon if possible.

The opportunity to enroll in a plan after Open Enrollment ends on December 7 applies to everyone affected by Hurricane Sandy, including those who do not live in the affected areas but rely on help making healthcare decisions from friends or family members who do live in the affected areas.

“This is a really important recognition by CMS to accommodate Medicare enrollees affected by Hurricane Sandy,” said Leslie Fried, director for policy and programs at the National Council on Aging, a Washington, D.C., advocacy group.  I wholeheartedly agree.


Why Medicare star ratings are important to you during Open Enrollment

Medicare Plan Star RatingsGiven the choice of staying in a 2-star hotel in a seedy neighborhood for $60 a night or a 4-star hotel near the ocean for $100 a night, I’m going to opt for the 4-star hotel. Even though it will cost me more, I know that the higher star rating will mean I’m getting a higher-quality room, better service, and more value for my vacation dollars. I may even get an indoor pool, hot tub, and gym, which right away makes it worth paying $40 more.

The same is true for Medicare coverage. I would never recommend a Medicare Part D or Medicare Advantage plan with a low star rating to a friend or loved one. Low star ratings in Medicare mean lower quality. And lower quality often means less value, poor customer service, and less customer satisfaction.

Each year, the Centers for Medicare & Medicaid Services (CMS) rates how well health plans and prescription drug plans perform in different categories, such as customer service, prescription drug safety, and member satisfaction. The Medicare star ratings are important because they help you compare the overall quality of plans during Medicare Open Enrollment. Star ratings range from 1 star (poor performance) to 5 stars (excellent performance), so look for a plan with high ratings (4 or 5) to ensure you get the level of service and safety you deserve.

Use the following resources to get Medicare plan star ratings:
• The overall plan star ratings are available at the Medicare Plan Finder.   
• You can call 1-800-MEDICARE (1-800-633-4227). TTY users: 1-877-486-2048.
• You can call your plan’s customer service number and ask for the plan’s Medicare
   star rating.

More high-quality Medicare plan choices in 2013
According to Health and Human Services Secretary Kathleen Sebelius, more 4- and 5-star plans will be available in 2013 than ever before.
In 2013:
• People with Medicare will have access to 127 four- or five-star Medicare Advantage plans. In 2012, people with Medicare had access to only 106 four- or five-star plans, which served only 28 percent of enrollees.
• People with Medicare will have access to 26 four- or five-star prescription drug plans, which currently serve 18 percent of enrollees. This is an improvement from 2012, in which only 13 plans with four or five stars serve just 9 percent of enrollees.

Switch to a 5-star Medicare Advantage or Part D Plan at any time during the year
If you’re fortunate enough to find a 5-star plan that serves your area and meets your health and budget needs, you can enroll in that plan any one time during the year, starting as early as December 8, 2012.

Study suggests most Medicare beneficiaries are paying too much for their Part D coverage

Seniors Pay Too Much for MedicareApproximately 20 percent of Medicare beneficiaries spend at least $500 more than they need to for their Medicare Part D prescription drug coverage, according to a new Health Affairs study released this week. That’s a lot of money being kept out of the piggy bank.

According to University of Pittsburgh researchers Chao Zhou and Yuting Zhang, only 5 percent of Medicare beneficiaries buying a Part D plan choose the plan that’s cheapest for them relative to their prescription drug needs. Based on their analysis of 2009 Part D data, the average beneficiary paid $368 more in premiums and drug costs than they would have if they’d chosen the least expensive plan that was right for them.

Zhou and Zhang attribute most of the overspending to seniors’ inclinations to pick Medicare plans with more generous features and lower deductibles, and thus, higher premiums. For example, they noted that the biggest mistake people make is picking a plan that covers generic drugs in the Coverage Gap (doughnut hole). Many beneficiaries appear to be paying hundreds of dollars more in premiums for this feature than they get back in drug benefits—perhaps because they don’t ask their doctors to prescribe generic drugs or they just never reach the Coverage Gap.

However, the researchers acknowledge there are also a few reasons why Part D beneficiaries may not want to choose the cheapest plan. Some seniors may choose a more expensive plan because it offers better customer service or has a higher Medicare star rating, or because they may be willing to spend a little more for peace of mind in case their medication needs unexpectantly increase.

So how do you find the lowest-cost Part D plan that’s also the best fit for you?

As I’ve said in the past, you should look for a plan that offers the lowest total cost based on the medications you take.  When shopping for a plan, remember to consider the monthly premium and annual deductible as well as the annual costs for all your medications. Fortunately, those good people at Medicare have a great online tool called the Medicare Plan Finder that makes it easy for you to compare costs each year. Here’s what you do:

1. Go to and click on “Find health & drug plans.”  (You’ll see this in a yellow box near the top left of the page.)  

2. Enter your zip code, and then answer the other questions. Make sure you choose one or two pharmacies that are near you, and specify all the drugs you take (and their dosage). You’ll also need to say whether you get your prescriptions filled at a retail or mail-order pharmacy.  Answering these questions is the only way the tool will give you accurate cost information for your personal drug needs.

3. On the search results page, click on “Prescription drug plans (with original Medicare)” to see a complete list of stand-alone Part D plans available in your area. You can also refine your search on this page.

4. The generated list will show the lowest-cost plan first, which includes monthly premiums as well as out-of-pocket costs for the drugs you selected. And because a cheap plan with a low star rating may end up costing you more in the end (more time, more aggravation, more worry, etc.),  you should also sort results by Overall Plan Rating to make sure the lowest-cost choices have a good star rating (3.5 or more stars). 

Remember, Medicare Open Enrollment is October 15 through December 7, 2012.

I just want to know: Do I need Medicare Part B or not?!?!

The other day, my neighbor and dear friend called me in her usual exaggerated state of panic. But this time she wasn’t calling because one of her dogs got loose outside or she ran out eggs while baking a cake. She was worried about whether she would have to sign up for Medicare now that she’s turning 65.  Vicky is retired, but she is covered under her husband’s health and prescription drug benefits, which he gets through his current employer.   

“I just want to know. Do I need Medicare Part B or not?!” Vicky asked me.

“Well,” I told her. “It all depends.”

“Depends ON WHAT?” she moaned. “What am I supposed to do?”

As soon as I started to explain that it all depends on how her current benefits work with Medicare—in other words, whether her husband’s employer insurance will be “primary”  and pay first or “secondary” and pay second—her panic level rose. So let me see if I can make this easier to understand for you and her.

If you are eligible for Medicare and have coverage through your or your spouse’s current job, it’s a no-brainer to at least take Part A (hospital insurance). That’s because for most people, Part A is free. But it’s a lot more complicated to decide whether to take Part B, for which you’ll have to pay a monthly premium.

What I told Vicky to do—and what I suggest you do if you’re in a similar situation—is to speak with someone in the company’s benefits or human resources department before making any decisions concerning Medicare Part B coverage. Ask this person how your employer group insurance works with Medicare and then confirm this information with the Social Security Administration (SSA) and Medicare. 

• Some companies will continue to provide primary coverage for employers (and their spouses) as long as the employee is still actively employed.
• Some employers provide only secondary or supplemental coverage for employees (or their spouses) who qualify for Medicare.
• Some employees do not provide any coverage once the employee becomes eligible for Medicare.

By the way, Vicky called to thank me the next day. She told me that she spoke with the benefits manager at her husband’s company, who informed her that she would not have to get Part B as long as her husband was still actively employed. I know that her husband, Roy, plans to retire in about a year, so Vicky will save about $1,300 by delaying Part B until that time.

Reminder: Medicare Open Enrollment is October 15 through December 7.

Medicare Part D premiums not expected to rise in 2013

Today the Obama administration announced that the average premium for basic Medicare Part D drug coverage will stay the same next year, at around $30 a month. This makes three years in a row that the monthly Part D premium has stayed in the $30 range for Medicare beneficiaries.

Because we’re dealing with Medicare, there is, of course, a caveat. The $30 amount is just an average, so some beneficiaries may pay a higher premium amount in 2013, while others may pay less. That’s why it’s so crucial to check your plan during open enrollment season this fall (October 15 to December 7) and shop around if your costs go up too much or you’re just not satisfied with your plan.

Why it’s important to choose a plan with the lowest total cost

Although premiums are important, if you’re shopping around for a new Medicare Part D plan, you should look for a plan that offers the lowest total cost based on the medications you take. I really can’t stress this point enough.

All too often, Medicare beneficiaries will choose a plan with the lowest monthly premium, only to find out weeks or months later that they’re going pay more in the long run. It may be that the co-payments for their medications are higher in this “low-cost” plan, or they have a higher annual deductible. As I have mentioned before, remember to consider the monthly premium plus the annual costs for all your medications when making your decision.


Five-star special enrollment period for Medicare will help seniors in only 8 states

Although Medicare Open Enrollment officially ended on Wednesday, a new Special Enrollment Period (SEP) has now kicked in for beneficiaries who would like to enroll in a five-star Part D (prescription drug) or Medicare Advantage plan. This SEP theoretically extends the Open Enrollment period for the 2012 plan year to December 31, 2011, which had always been the deadline in the past. The problem is, most seniors will have a hard time finding a five-star plan, since very few plans received this top-quality rating from the Centers for Medicare & Medicaid Services for 2012.

According to an analysis conducted by Allsup, a Medicare plan selection service, as of November 30, there was only one five-star prescription drug plan available in just eight states:  Iowa, Minnesota, Montana, Nebraska, New York, North Dakota, South Dakota and Wyoming.

There were only eight five-star Medicare Advantage contracts (14 total plans) available 10 states, with one available in each of the following seven states: California, Colorado, Hawaii, Illinois, Maine, Massachusetts and Oregon; two available in Iowa and Washington; and three available in Wisconsin.

How the Special Enrollment Period works

Starting December 8, you can make the switch to a five-star Medicare Advantage plan or Part D prescription drug plan that serves your area. You can make this switch only one time through November 30, 2012. 
• If you enroll December 8 – December 31, 2011, your coverage will begin January 1, 2012.
• If you enroll January 1 through November 30, 2012, your coverage will begin on the month following the month in which you submit your enrollment request.

Consider other factors when switching to a five–star plan

If you are fortunate to live in one of the eight states that offer a five-star plan, you may want to consider it if you are not pleased with your current Part D plan. But remember, while the star ratings are important, there are many other factors to think about, such as total plan costs based on all the drugs you are taking and the plan’s formulary (list of covered drugs.) And should you switch to a five-star plan, there’s no turning back: You only get to switch once, so you’ll have to stick with that plan until the next Open Enrollment period in 2012.

Medicare Open Enrollment Deadline Extended for Those Who Seek Help

In my very first Med Diva blog, I predicted that the phones would be ringing off the hook at the Centers for Medicare & Medicaid Services (CMS) and other senior assistance centers this week. I was right on the mark — and I didn’t even need to put on my “Carnac the Magnificent” hat.

According to counselors at State Health Insurance Program (SHIP) offices, the Medicare Rights Center, and other various agencies on aging, the new December 7 deadline for Part D Open Enrollment has created a crush of last-minute enrollment requests. “Our phones have been ringing off the hook,” said Gina Upchurch, executive director of Senior PharmAssist, which helps seniors choose drug plans and Medicare Advantage health plans.

To accommodate the late rush, federal officials are extending the December 7 deadline for two days for some people—in particular, for those who contact any of several sources of assistance on or before the close of business Wednesday (today). According to a Brian Cook, a spokesman for CMS, seniors can call counselors at SHIPs, the National Council on Aging, local agencies on aging, and the Medicare Rights Center, or call Medicare’s toll-free information line at 1-800-633-4227. Anyone who asks for assistance must be enrolled in a plan by 12:01 a.m. Sunday.

“We are committed to providing Medicare beneficiaries with the information and time they need to make these important decisions about their care,” said Cook.

That’s all well and good, Mr. Cook, but what about all those people who don’t find out about this extension and don’t reach out for help?  I know a lot of senior advocates agree that everyone deserves an extra two-day pass or more, especially those 10 percent of seniors or so who are still not aware that today is their last day to switch their Medicare Part D plan.

Spread the Word: Only 2 Shopping Days Left for Medicare Part D Open Enrollment

There may still be 19 shopping days left until Christmas, but this year the shopping season for Medicare Part D ends on December 7. That means there are only 2 more days (after today) in which you can switch your prescription drug plan for 2012.

You can thank Healthcare Reform for the early deadline this year: The 2010 Patient Protection and Affordable Care Act mandated the earlier enrollment period to give you more time to weigh your plan options and the drug plans more time to complete paperwork and get membership cards and plan materials to beneficiaries by January 1, 2012. The intention was good, but unfortunately, the execution has been poor.

In fact, one recent survey shows that almost 20 percent of seniors are still unaware of the Wednesday deadline.

According to the survey conducted by Opinion Research Corporation and sponsored by PlanPrescriber, one in five seniors 65 years of age and older with Medicare prescription drug coverage were still aware that the Open Enrollment period ends December 7. The national phone survey was conducted between October 28 and October 31, 2011.

Please spread the word

Hopefully, this number has improved during the past month. Ideally, 100 percent of seniors are now aware of the early deadline. However, it’s more likely that a small percentage of beneficiaries are still in the dark about the deadline – which means we must still work hard to get the word out. That’s why I’m asking all of my readers, Facebook friends, and Twitter followers to talk to all the seniors in your lives and remind them that the last day to switch their Medicare Part D plan is Wednesday, December 7.  Thank you everyone!

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