How to Avoid Costly Mistakes in Choosing a Medicare Plan

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Medicare’s annual open enrollment runs from October 15th to December 7th. During this time, Medicare subscribers can join or change plans including:

  • Medicare Advantage plans:
  • Return to the original Medicare coverage
  • Medicare Supplemental (Medigap) plans;
  • Part D Prescription Drug plan

It is very important to make an informed choice of the best insurance plan for your medical needs, preferences, and budget. A bad choice can cost you thousands of dollars and prevent you from receiving services that you need from your preferred providers.

Medicare Insurance Options for Seniors

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Original Medicare is the government-run health insurance for seniors and disabled people that use private doctors, hospitals and other healthcare providers.

By comparison, Medicare Advantage (MA) plans that often include a prescription drug plan, stand-alone Prescription Drug plans (PDP) that are used with original Medicare and Medigap (Supplemental) plans are all sold by private insurance companies that are subsidized and regulated by Medicare.

These plans are offered by a variety of large for-profits (eg. United Healthcare, Humana, Aetna), national non-profit organizations such as Blue Cross and many regional non-profit insurers.

In addition, some seniors are eligible to receive their health insurance through their current or former employer.  And most Veterans are eligible to receive their health care and medications through the Veterans Administration.

Common Problems to Avoid

Your plan doesn’t include your preferred service providers.

If you don’t verify that your health care providers have a network contract with the insurer that you are considering, you could be facing huge bills. You could be responsible for paying the full cost of expensive services from health care providers or declined service.

Out-of-Network does not mean out of your area. Your preferred health care provider could be next door, but may not have a contract with your insurance company.

Be especially cautious of PPO plans, often sold by national insurers, that lead you to believe that you can go to any doctor anywhere. This is not accurate. Many times national insurers have not developed local provider networks or formal contracts. They often pay commissions to insurance agents to sell policies but do not have local staff to resolve provider and subscriber issues and concerns. These are often handled by central call centers.

The fine print in PPO plan documents includes this disclaimer: “Out-of-Network/non-contracted providers are under no obligation to treat plan members, except in emergencies”

This means that while you may have insurance, you may not be able to find a provider that accepts your plan, for a variety of reasons.

You Didn’t Anticipate High Deductibles and Out-of-Network Costs

Some plans, such as the Aetna Elite PPO are advertised as a $0 premium plan, however you need to pay the first $1,000 for many medical services plus an additional $350 deductible for Tier 3,4 & 5 drugs  including vaccines that do not have a generic equivalent. In HMO plans, you could be responsible for the full cost of “out-of-network” services.

Consumers need to be aware that each insurer decides what drugs to include and exclude, and what they will charge subscribers. Generally, you will be responsible for the full cost of medications that are not included in the plan’s formulary.  Drug prices can also vary by the pharmacy that you choose and if you choose a 90 day mail-order supply versus a more costly monthly supply.

In considering plans, you should not focus solely on the advertised premium cost, but rather your medical, drug, out-of-network needs and your projected out-of-pocket expenses including premiums, deductibles, co-pays, out-of-network charges and drug costs.unknown-1

Medicare.gov provides a  “plan finder” that helps you analyze medical & drug expenses among various plan options that are available where you live.

 

 

You Didn’t Consider Medigap Plans for High Medical Expenses and Maximum Choices

Many Medicare Advantage HMO plans have little or no out-of-network coverage and you may have to pay for the full costs of services that you receive. If you have serious medical conditions that require costly tests, hospitalization, nursing home rehabilitation, outpatient


surgery and intensive outpatient treatment such as cancer, heart disease, renal disease and/or you would like the freedom to select specialty providers outside of your plan’s network, you’ll need good coverage at an affordable price. “Original Medicare” has no limit on your annnual expenses. And, Medicare Advantage plans have a high annual maximum out-of-pocket limit of $6,700 but there is an alternative–Medigap plans.

As a general guide, if your projected annual out-of-pocket medical expenses (premiums, deductibles & co-pays – excluding your prescription drug expenses) exceeds $3,000/yr. and/or you want Medicare coverage across the country, you should explore a Medigap plan.

Medigap plans provide supplemental coverage to original Medicare and pays for deductibles and copays. All healthcare providers who participate in Medicare across the country are included and there are no out-of-network exclusions or surcharges.

Medigap plans are regulated by each state and you can receive information on the availability of plans and their premiums by contacting your state insurance department medicare.gov/contacts.

You Didn’t Think You Needed or Understood Differences in Prescription Drug Plansmed prices

Most Medicare Advantage plans include prescription drug (Part D) coverage. However, if you have “Original Medicare” with/or without a Medigap plan, you will also need to purchase a prescription drug plan (Part D) unless you have an approved employer drug plan or receive your medications from the VA.

If you don’t have a an approved drug plan and you want to purchase one at a later date, you are likely to be subject to a late enrollment penalty.

Part D plans are sold by private insurance companies and vary from state to state. For example, in New York State 27 plans are available from 10 different insurers. The premium and deductible cost of plans in New York varies widely from a Humana Walmart plan that costs $13 a month with a $435 deductible to a SilverScript plan that costs $91 a month with no deductible.

It is also important to check plans that you are considering to confirm that the medications that you need are included and what your co-pays and total annual expenses will be before enrolling in a plan.

Medicare.gov has a planfinder that compares the different cost of the various Part D plans based on the medications that you use and where you live.

You Didn’t Expect a Medicare Enrollment Penalties

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Medicare rules require that if you want to receive Medicare benefits, you need to enroll and pay your Medicare Part B (outpatient) and Part D (prescriptions) premiums when you are first eligible. There are a few penalty exceptions, for example, if you receive creditable medical and drug insurance from you or your spouse’s employer, if you receive your medications from the VA.

Medicare penalties can be significant. The Part B (outpatient care) late enrollment penalty is 10% for each year, from the date of your initial Part B eligibility. The Part D (prescription drugs) penalty is 1% for each month from when you were initially eligible, or June 2006, the start of the program. There are a few circumstances when penalties can be reduced or eliminated.

The Importance of Having a Good Medicare Plan

Selecting the best plan for you or your family member is a very important responsibility since the consequences can be significant, both to your pocketbook and your ability to receive needed health care from your preferred providers.

Investing time in planning and seeking objective advice in selecting a plan, can save you a lot of time, money and headaches. The following is a list of free resources that are available to help you.

Resources

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Social Security Administration, socialsecurity.gov, 800-772-1213

The Social Security Administration is the agency that you need to contact to apply for your Social Security benefits and enroll in Medicare Part B and D., In addition, you can be screened for eligibility (income and resources) and apply for “Extra Help” with your Part D premium and cost of your medications

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Medicare: Medicare.gov – 800-633-4227

An excellent resource with Medicare information and specific help in comparing Medicare Advantage and Prescription Drug Plans in your area.

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State Health Insurance Assistance Program  SHIP 877-839-2675

Medicare contracts with states, counties and nonprofit organizations to provide individuals with personalized education, support, and assistance with Medicare.

These free services include comparative plan information, eligibility for financial assistance as well as help with selecting a Medicare plan, enrolling, and resolving problems.

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Partnership for Prescription Assistance

 This is an online information resource tool. You can learn about assistance programs that are available for specific medications, along with the eligibility criteria and program applications.

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Medicare Rights Center, medicarerights.org , Helpline: 800-333-4114

The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.

 

This article was updated in October 2019 from an earlier post.

Eight Things You Need Know about Medicare Prescription Drug Plans before Enrolling

 

  1. Medicare pays private insurance companies $95 billion each year in subsidies for Prescription Drug Plans (PDP) in addition to what enrollees pay in plan premiums, deductibles and co-pays for your medications.
  2. There is no annual limit on your out-of-pocket prescription drug expenses that are sold by private insurers.
  3. Private insurers control their drug expenses by restricting your access to medications that your doctor prescribes through: their drug formularies that exclude specific drugs, require prior authorization, limit quantities, require you to take lower cost drugs before higher cost drugs are approved and by establishing their own drug price tiers, annual deductibles and the amount that you are required to pay for prescriptions.
  4. There are significant differences among Medicare Part D plans including: the drugs they include, what Tiers they assign to their included drugs, and the premiums, deductibles, co-pays and coinsurance that subscribers are required to pay.
  5. Although Medicare Part D plans are not allowed to deny coverage or charge higher premiums to people with pre-existing conditions, their prescription drug policies provide a clear message of who they want, and don’t want as subscribers.
  6. The cost of medications in the US to treat millions of Americans with life-threating diseases such as diabetes, multiple sclerosis, Hepatitis B, inflammatory diseases, respiratory diseases, various cancers, organ transplants are the highest in the world.
  7. Big Pharma and the insurance industry have been very successful in controlling Congress and the Executive branch with the millions that they pay each year in political campaign contributions and lobbying.
  8. In return, Big Pharma and the insurance industry has insiders working in key executive positions in government, such as the White House advisors, Congressional committees staff, Departments of Health and Human Services (Alex Azar), Center for Medicare & Medicaid Services (Seema Verma) and the Food & Drug Administration (Scott Gottlieb) where they use their industry special interest in writing federal legislation, establishing policies, regulations, administrative practices and weakening regulatory compliance and sanctions for violations.
  9. This situation results in higher taxes, huge goverment debt and the highest prescription drug costs in the world for life-threatening conditions that many Americans can’t afford.

Medicare DrugCost

A review of four major Medicare Advantage plan insurers in Upstate New York including for-profits: Aetna, United HealthCare and WellCare and regional non-profits: MVP and Excellus Blue Cross revealed the following observations.

  • All insurers target enrolling healthy seniors and provide incentives with low or no monthly premiums along with gym memberships.
  • All insurers have developed financial disincentives for individuals that are prescribed: “non-preferred” brand-name and generic medications, specific medications that they have excluded, requiring deductibles up to $380yr., medications that require co-pays up to $100 mo. and co-insurance charges of up to 33%.

In summary, you may have insurance for your prescription drugs in your private Medicare Part D Plan, but you may not have coverage or the ability to pay for your critically needed medications for life-sustaining treatment.

As result,  it is very important that you that you educate yourself and confirm that the Medicare drug plans that you considering meets your needs and budget during this Medicare open enrollment period that ends, December 7th.

Insulin Makers Accused of Fraud and Price Fixing in Class Action Lawsuit

Sanofi, Novo Nordisk and Eli Lilly, who manufacture and sell insulin under the brand names of Lantus, Levemir, Novolog and Humalog, were accused of a price fixing scheme that resulted in excessive price increases to diabetic patients who desperately need insulin to live.

Hagens Berman filed this nationwide class action lawsuit on January 30, 2017 in the US District Court in Massachusetts. The lawsuit alleges that Sanofi, Novo Nordisk and Eli Lilly committed fraud and illegally raised the price of insulin by over 160% in the last five years for millions of diabetic Americans.

Hagens Berman further alleges that the pharmaceutical companies created fictitious list prices that were enormously higher than the actual prices that they negotiated with drug distributers that are known as “pharmacy benefit managers”.

This lawsuit seeks reimbursement from these drug manufacturers to diabetic consumers who were victims of this scheme. To learn more and/or participate in this class action lawsuit go to https://www.hbsslaw.com or call 888-381-2889

The High Cost of Diabetes is Killing Americans and our Economy

Background

According to the Centers for Disease Control and Prevention – CDC , diabetes is a serious disease that affects 30 million Americans with another 86 million individuals who have elevated glucose levels that are considered pre-diabetic.

Diabetes can progress to become the underlying cause of other costly, disabling and deadly conditions such as cardiovascular diseases, damage to the brain, eyes, kidneys, nerves and result in lower limb amputations.

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Diabetes accounts for 4.6 million deaths worldwide and is the 7th leading cause of deaths in the US.

While the cost of treating diabetes and death rates varies considerably among counties, the US leads all other countries with $322 billion annually in direct and indirect costs.

By comparison, the United Kingdom, Japan and Norway have consistently had the lowest death rates due to diabetes over the past five decades and spend only a fraction of what the US does.

Why does the US Spends so Much and Get Such Poor Results?

The answer is simply because pharmaceutical companies, insurance companies and health care providers make billions of dollars with this costly, inefficient and ineffective method of selling, paying and delivering health care in the US.

According to the Center for Responsive Politics – open secrets , the pharmaceutical and health products industry employs more than 3 lobbyists for every member of Congress; spends about $1.2 million lobbying every day Congress is in session. It has also created a career path for loyal Congressional and federal employees to become well-paid private-sector pharma lobbyists.

Hundreds of million dollars are spent each year on lobbying and contributing to House and Senate members to maintain this monopoly and the industry’s control in setting their own drug prices, unlike the rest of the world.

Pharma Net Profits 2005-2012

Pharma’s huge profits occur at the great expense of taxpayers, employers and individuals with diabetes who experience the physical, emotional and financial pain and suffering.

Negative Impact of High Health Care Costs on the Economy

Health care spending in the US far exceeds that of other countries. It consumes 50% more of the economy than other countries. And, high health care expenses have a negative effect on patients, employees, employers, city, county, state and federal governments and the taxpayers that pay higher taxes for this efficient and ineffective system.

High health care expenses increase the cost of everything that is made in America and makes them less competitive to imports that don’t include high health care costs. High medical and drug expenses have resulted in decades of double-digit insurance premium increases, wage stagnation, high personal debt, medical bankruptcies, growing government deficits, higher taxes, the collapse of the middle class and a weaker US economy.

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Price Waterhouse Cooper – PwC   in its Pharma 2020 Vision report concludes: “the current pharmaceutical industry business model is both economically unsustainable and must fundamentally change the way it operates.”

Who Pays for Diabetes

The cost of diabetes treatment in the US continues to rise uncontrollably without any corresponding improvement in outcomes. And taxpayers, employers and patients pay the bills.

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A study by the Health Care Cost Institute – HCCI, showed that employer health insurance spending on employees (under 65) with diabetes was $15,000 a year or 300% more than for people without diabetes.

And, Medicare spending is astronomical with over $5.5 billion dollars being spent on just two diabetes drugs- Januvia and Lantus insulin in 2014.

It Doesn’t Have to be this Way

The most troubling fact is it doesn’t have to be this way. Diabetes is not a rare, deadly infectious disease or an aggressive, deadly form of cancer that can’t be treated. And, no other country in the world allows drug companies to charge these exorbinate prices or regulate and require them to disclose more clinical testing and drug cost information.

Diabetes is a relatively easy to diagnose, monitor and treat disease in the majority of cases with appropriate education and interventions. But like other chronic diseases, diabetes has biological, behavioral, educational, care delivery, political and financial dimensions that need to be addressed in order to improve access to affordable and effective treatment.

Opportunities for Taxpayers to Save Billions and Improve Outcomes of Diabetes Treatment

Politicians frequently campaign on the need to cut wasteful government spending. However, after elected, they protect their sacred cash cows that finance them. They place their political and financial self-interest over the needs of millions of Americans with serious and disabling conditions to have access to affordable and effective health care including prescription drugs.

Numerous studies and reports have indicate that the US wastes hundreds of billions of taxpayer, employer and patient dollars that can be saved by:

  • Congress insuring that all citizens have access to affordable health services like the rest of the develop world.

The excessive financial burden placed on patients with serious and chronic medical conditions that require costly medications and treatment needs to be significantly reduced in employer-sponsored and ACA Exchange High Deductible plans as well as Medicare plans.

  • Medicare, Medicaid, ACA Health Exchange and employer-sponsored plans need to change from paying drug companies and medical providers based on the volume of medications, tests, procedures and visits provided to paying for the value and results of the drugs and treatment provided. To what extent does the treatment cure or manage the progression of the disease and minimize the patients’ pain, suffering and disability?

There is no positive relationship between medical care expenses and success in preventing or managing the debilitating progression of diabetes in the US. 

  • Congress needs to promote competition and free-trade by reducing drug and devise patents terms and extenders consistent with other countries;
  • Congress needs to approve a strict Code of Ethics and Conflict of Interest policies with civil and criminal penalties that prohibits members of Congress and individuals and corporations with a financial interest before the federal government from soliciting or accepting direct or indirect payments, gifts or favors that place private interests over the public good for members of Congress and other federal employees. Investigations and the prosecution of violators should be independent and the responsibility of the US Justice Department and not Congress.
  • The FDA should be adequately funded and authorized to impose sanctions against pharmaceutical companies including the revoking of patents when ethical standards, regulations and laws have been violated;
  • Congress needs to repeal the section of 2003 law that prohibits Medicare (the largest drug purchaser) from establishing reimbursement rates with pharmaceutical companies like the VA and every other country does;
  • Congress needs to eliminating the ban on the importation of lower cost prescription drugs and biologics from Canada and other counties;
  • The Federal government needs to become an equity investor and require a financial return including royalties, from all intellectual property and patents developed and sold that have received government-funded basic & applied research, grants and loans. 
  • Congress needs to ban direct marketing of prescription drugs to consumers and require that pharmaceutical companies fully disclosure the outcome of all clinical trials, drug research and the actual cost of research and development, manufacturing and administration including sales and marketing.

 Summary

The current $322 billion being spent on diabetes with such poor outcomes is not sustainable. For meaningful change to occur, there needs to be major changes in the pricing, financing and delivery of care.

With the entrenched pharmaceutical industry’s interest to maintaining their influence and control over Congress, change will only come about by confronting members of Congress  to determine whether they are for or against actions to lower the price of drugs and medical services, increase transparency and adhere to standards of ethical conduct.

Taxpayers, patients, employers and the US economy are being badly hurt by Congress’s lack of leadership and deference given to the trillion dollar health care and pharmaceutical industries over the interest and needs of American patients, employers and taxpayers.

2016 provides an important opportunity for citizens to learn the positions and records of national candidates for President, the House and Senate and elect candidates who will represent the peoples’ interest over their own political and financial self-interest.

You and your family’s life may depend on it.

Aetna’s Pharmacy Controversy Affects 400,000 and Medicare Allows Subscribers to Disenroll

According to the 2/3/15 Kaiser Health News (KHN) report, Aetna’s errors and omissions in providing prospective and existing Medicare subscribers with accurate network Pharmacy information has affected 400,000 individuals.

The inaccurate and confusing information can affect the individual’s actual cost of their medications as well as potentially ending subscribers’ relationships with their preferred pharmacist and most convenient pharmacies. As a result, the federal Center for Medicare and Medicaid Services (CMS) is offering Aetna subscribers to either select a participating pharmacy that meets their needs or use a special enrollment period through February 28, to disenroll from Aetna and enroll in another Part D prescription drug plan.

Aetna, like a number of other insurers, has established a pharmacy benefit program that utilizes their size and national clout to drive hard deals with drug companies and pharmacies. They want to reduce their cost in exchange for offering a higher volume of business with less competition to their preferred drug companies and pharmacies.

Insurance companies through Pharmacy Benefit Managers (PBM) establish a complex structure of classifying drugs in different classes or tiers with associated co-pays or co-insurances and then add different restrictions such as requiring deductibles,prior authorization, step-therapy and quantity limit for subscribers.

Aetna’s program is a little more complex than other insurers in that they have a limited number of network pharmacies (especially local vs. national) that are grouped into either standard pharmacies and  a smaller number of preferred pharmacies. They also operate their own Aetna Rx Home Delivery pharmacy.

Aetna does offers subscribers choice for the meds and pharmacies that they use, but at a very high price. To illustrate, in the Aetna Medicare Premier PPO plan offered in Rochester, NY, if you want to use a “non-preferred brand” name medication on Aetna’s list of approved meds you will have to pay 50% of the cost for a 30 day supply vs. $45 for a “preferred brand”. Your co-pay for a 90 day supply of a “preferred generic” will be $8 (80%) more at a “standard” vs. ‘preferred” pharmacy and your co-pay for a 90 day supply of a “non-preferred generic” will be $18 (180%) more than a “preferred generic’ medication. Each insurance company through their PBM choses which drugs to include/exclude and in what tier and co-pay/co-insurance. These decisions vary among companies and are only subject to broadly written Medicare rules.

While Aetna has made a major push to expand their presence in the national Medicare Advantage market for 2015, they have not been ready for last year’s Fall Medicare open enrollment period. They heavily advertised and marketed their zero premium “Premier” plan but I have witnessed and heard numerous consumer complaints about their call centers and website regarding the accuracy of participating doctors and hospitals and being very slow in establishing provider contracts.

Hopefully Aetna will learn from this year and make changes in their plans that are responsive to seniors needs and priorities.