What to Know When Selecting a Medicare Prescription Drug Plan

Background of Private Medicare Prescription Drug Plans

  • Legislation design by the President G.W. Bush administration and approved by Congress in 2003, resulted in the creation of a new privatized Medicare prescription drug (PDP) and Medicare Advantage (MA) plans for millions of elderly and disabled individuals. However, there was no responsible plan to pay for it. No new federal revenue sources were included nor were there cuts to existing federal expenses. Instead, federal subsidies were authorized for these new privatized Medicare benefits and these private insurers could also retain profits above and beyond their costs.
  • Traditional Medicare insurance which was already serving over 40 millions Americans in 2003, was not allowed to offer prescription drugs or other new benefits that private Medicare Advantage plans included.
  • It should also be noted that private insurers are allowed to pick and choose where and how long they want to sell plans compared to Traditional Medicare that is available to everyone that is eligible in the country.

  • As a result, two new publically funded, private health insurance plans were sold to the public on the assumption that they would cost less than Traditional Medicare and provide more benefits. However, today Medicare Advantage and PDPs cost taxpayers $328 billion/annually in federal subsidies.
  • The 2003 legislation also prohibited Medicare from negotiating drug prices on behalf of subscribers (as is done with the VA and Medicaid) and outlawed the importation of prescription drugs from Canada and other countries where they are sold at lower prices. As a result, prescription drug costs have sky-rocketed over the past 15 years.
  • Today, 43 million people are enrolled in private Medicare Part D drug plans either in stand-alone PDP how many people or integrated within Medicare Advantage plans.
  • In addition, the federal Social Security Administration subsidizes the cost of private insurer PDP premiums, deductibles and medications for 13 million low income individuals. This represents 28% of all PDP enrollees.

Important Facts to Know about PDPs

  • Today, the vast majority of Medicare Advantage Plans today include prescription drug coverage. However, Traditional Medicare and private Medicare Supplemental (Medigap) plans don’t include drug coverage, so a separate private PDP is needed for your medications and to avoid a potential late enrollment penalty.
  • Medicare-approved stand-alone PDPs are sold primarily by large, for-profit insurers such as Aetna/CVS, Cigna, Humana, SilverScript, United HealthCare and WellCare.
  • Private insurers are allowed to charge subscribers plan premiums, deductibles and co-pays/co-insurance for medications in addition to the federal subsidies that they receive.
  • Insurers also exclude specific drugs from their formulary, establish restrictions, such as requiring prior insurer authorization, limit medication quantities and require that subscribers take lower-cost drugs before higher-cost drugs.
  • Each insurer establishes their own drug classifications into pricing tiers and there are significant differences among PDPs regarding the drugs that are excluded/included and the premiums, deductibles, co-pays/coinsurance that subscribers are required to pay.
  • Although PDPs are not allowed to deny coverage or charge higher premiums to subscribers with pre-existing conditions and chronic diseases, insurers have latitude with establishing restrictions and subscriber charges.
  • There are no annual maximum out-of-pocket expenses for prescription drugs in either Medicare Advantage or stand-alone PDPs, so the cost of drugs can create serious financial problems for families.

  • In a 2019 study, reported in Health Affairs Journal, more than half of seriously ill Medicare enrollees face financial hardship with their medical bills with the cost of prescription drugs being the leading problem.
  • Unlike the rest of the developed world, in the US there is no public insurance for medications or government negotiation of drug prices, with the exception of the VA and Medicaid. As a result, the cost of medications to treat millions of Americans with life-threatening and disabling diseases such as diabetes, cancer, multiple sclerosis, Hepatitis B, inflammatory diseases, respiratory diseases, organ transplants are the highest in the world.
  • The cost of medications has become a huge burden on taxpayers; federal, state and local governments; employers; patients and families. This results in more costly health care with poorer outcomes, increases in disability, reduced work productivity and results a major cause of personal bankruptcies in the US.

A  Review of PDPs Available in Rochester, New York

Popular plans offered by Aetna/CVS, Cigna, Express Scripts, Humana, SilverScripts, United HealthCare (UHC)  and WellCare reveal the following observations.

  • Each insurer generally offers 3 plans with different premiums and deductibles. Premiums range from Humana’s Walmart Value plan $13.20/mo. with a $435 deductible, to SilverScript’s Plus plan $91.20/mo. with a $0 deductible.
  • It is common that low/no premium plans have higher deductibles, co-pays/co-insurance and limitations.
  • Only 3 plans have no deductibles (down from 7 plans in 2019) but all have high premiums. The 3 plans include SilverScript Plus with a $91.20/mo. premium, United HealthCare AARP Preferred with a $85.60/mo. premium and WellCare Value Plus with a $76.60/mo. premium.  These plans are not affordable for most people, since the average annual premium is over $1,000 and doesn’t include the cost of your medication.
  • All insurers have developed strong financial disincentives for subscribers who use “non-preferred” brand name and generic medications by establishing medication exclusions, deductibles and up to 50% co-insurance for non-preferred brand name Tier 4 drugs.
  • Many insurers also charge higher prices for “standard” versus their “preferred” and “mail order” pharmacies. However, insurers are generally weak in informing current and prospective enrollees of the cost differences among pharmacy options.
  • There are significant differences among insurers in specific brand name drugs that are either excluded from their formulary or placed into either Tier 4 or Tier 5. And, there are differences among insurers regarding the price of T4 non-preferred brand name  vs. T5 specialty medications. To illustrate, it is not uncommon that T4 non-preferred drugs are billed at a high rate of 32%-50% compared to T5 speciality drugs that are billed at 25%-33%. 
  • An insurer’s “Preferred generic and brand name” medications are not the most cost-effective medications with the least side-effects. “Preferred” medications reflect the deals that the insurers have made with the pharma companies to push their drugs over their competitors drugs.
  • This often occurs with medications for common conditions including rheumatoid arthritis, multiple sclerosis, diabetes and various neurological, cardiovascular, inflammatory, autoimmune and respiratory diseases and cancer.

  • Issues of drug cost, insurance prior approvals and access to treatment is a major source of conflicts among insurers, physicians and patients. So, it is very important to compare plans to understand the differences in coverage, restrictions and cost among plans that you are considering.

In summary, in considering PDPs it is important to confirm if the plans:

  • Do they include your medications and at what cost?
  • Is there a deductible expense on your drugs?
  • What restrictions are imposed on your prescribed medications?
  • Does the plan have preferred retail and mail-order pharmacies?
  • What is the reputation of the insurer with your doctors and pharmacies?

And finally, what is the total annual cost to receive your medications from each plan and the comparative differences in the PDP quality, costs and benefits.

Resources

Free resources are available to help you in comparing costs, coverage and quality ratings among plans. These include:

Medicare Plan Finder

Provides detailed information from Medicare to compare Quality Star ratings, your estimated annual and monthly cost (premiums, deductibles, co-pays/co-insurance) for your specific medications and pharmacies among available Prescription Drug Plans and Medicare Advantage Plans sold in your community.

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State Health Insurance Assistance Program

Provides free personal and group information/assistance with Medicare issues and questions.

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MedicareRights

Helps people with Medicare understand their rights and benefits, and navigate the Medicare system

References

Congressional Budget Office, 2019 reports

Center for Medicare & Medicaid Services (CMS)

Health Affairs Journal

Kaiser Family Foundation, 2019 Data Briefs and Fact Sheets

Medicare.gov

Medicare Rights Center

Medicare Trust Fund Board of Trustees, 2019 Annual Report

 

 

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.

Shingrix – The CDC Recommended Vaccine that Most Medicare Plans Cover, But Few will Pay for it.

Background

Shingles affects nearly 500,000 of Americans over 60, every year. It can be a very painful and debilitating condition. However it can be prevented with a vaccine. Shingles causes a rash with itchy blisters on your body along with shooting nerve pain. It can attack older adults’ as well as individuals with weakened immune systems as a result of chemotherapy, long-term use of steroids and other conditions.

Shingles can be contagious to people who have never had chickenpox or have not been vaccinated. People especially at-risk are pregnant women, newborns and children who have not been vaccinated.

The Center for Disease Control (CDC) has recommended Shingrix as the preferred vaccine because it is 90% effective in preventing shingles. The average cost of Shingrix is $300 for the two required vaccines and it’s effective for the rest of your lifetime.

In my work as a Medicare counselor in Rochester, NY (Upstate New York), I have reviewed the formularies of all 24 Medicare Advantage (MA) plans and 27 stand-alone Part D prescription drug plans (PDP) in Rochester service area.

And, here is what  I learned…….

  • All the MA and PDP include Shingrix in their plan’s formulary.
  • However, only one MA plan (nonprofit Excellus Blue Cross/Blue Shield), classified Shingrix as a Tier 1 vaccine with no premium, deductible or co-pay.
  • Other MAs offered by: Aetna/CVS, nonprofit MVP, United HealthCare and WellCare that have monthly premiums ranging from $0 to $350 and deductibles ranging $0 to $395 listed Shingrix as a Tier 3 drug
  • All of the 27 PDPs offered by: Cigna, Emblem, Envision, Express Scripts, Humana, Magellan, JourneyRX, Silverscript, United HealthCare and Wellcare also classified Shingrix as a Tier 3 vaccine with monthly premiums ranging from $13.20/mo. with a $435 deductible to a plan with a $91.20/mo. premium and no deductible.

Conclusion

The bottom line is (with the exception of Excellus Blue Cross) 50 private Medicare drug plans that are under contract with Medicare and receive generous subsidies, include Shingrix in their formulary, but classifying it as a Tier 3 drug make it subject to a deductible that is equal to the price of the vaccine. As a result, you are paying for the full cost of the CDC recommended vaccine and these 50 insurers are paying nothing.

At the same time, The President and Congress give away $95 billion a year of taxpayer’s money to subsidize private insurance companies that sell private Medicare policies. In return, the insurance and pharmaceutical companies pay over $ 9 million a year in campaign contributions to candidates and members of Congress.

Final Thoughts

This is just one of many examples, that illustrates how American health care services are the most costly in the world with the poor outcomes due to unethical practices that have become commonplace on the part of elected and appointed officials, insurance and pharmaceutical companies.

Medicare insurance policies and contracts need to be reformed to make them rational, sustainable and cost-effective. And meaningful ethical standards need to be established, monitored and enforced. Science and accepted clinical evidence needs to replace the dominance of the financial self-interest of elected and appointed federal office holders and the billion dollar insurance and pharmaceutical industries.

If you want to see the Medicare insurance system change, let your elected federal representatives and candidates running for office in 2020 know your views. Remember you pay their generous federal salaries and benefits and it is their job to represent the common good of the people that they are expected to represent.

And, if you plan to get a Shingrix vaccine soon, first check the coverage and cost of your current plan and other available insurance plans in your area. You have the opportunity to change your Medicare plan for next year by December 7th.

Be the change you want to see.

In the interest of full disclosure, I am not compensated or have a relationship with any insurance or pharmaceutical company mentioned in this article.

 

 

 

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.

It’s Not Too Late to Change your Medicare Advantage plan

As a result of new federal legislation, subscribers of Medicare Advantage Plans will have three additional months (January-March each year) to change their plan. 

Why would you want to change plans now?

Some reasons could include:

  •  You missed the Annual Fall Open Enrollment period (October 15-December 7)
  • You didn’t realize your plan doesn’t include your medications, preferred doctors, hospitals, pharmacies, etc.
  • Your health condition has changed and you want better coverage.
  • Your financial situation has changed and you can’t afford your current plan.
  • You or your relative didn’t understand the limitations, cost or consequences of their current plan

Normally, you wouldn’t be able to change plans for these reason during the calendar year, except in special circumstances. However, now you will have 3 additional months to make a change each year.

To be eligible to make a change, you must currently be a subscriber of a Medicare Advantage plan (as opposed to being a subscriber to Original Medicare).

What are Some Permitted Changes?

  • You can change from one Medicare Advantage plan to another (from the same or a different insurer)
  • You can select a new plan that either increases or decreases your coverage and/or cost.
  • You can terminate your Medicare Advantage plan and switch to Original Medicare and buy (or not buy), a stand-alone Prescription Drug Plan (PDP).
  • In some states, like New York, you can also choose to purchase a Medicare Supplemental (Medigap) plan for added coverage to Original Medicare, with or without purchasing a PDP.

Is there anyone who can help you look at your options and their consequences?

Yes, there are a number of free independent resource people that don’t receive any sales compensation that can help you understand these complex issues.  They include:

SHIP connects you with local individual and group information/assistance regarding Medicare issues and questions.

 

https://www.medicarerights.org

National Helpline: 800-333-4114

MRC helps people with Medicare understand their rights and benefits, and navigate the Medicare system.

What to Look for in a Medicare Prescription Drug Plan

 

Background

  • Approximately 43 million or 72% of the people on Medicare are enrolled in Medicare-approved Prescription Drug Plans (PDP)
  • If you have Original Medicare (with or without) a Medigap plan, you likely need a PDP to have drug coverage and avoid a future penalty.
  • You need to have a PDP from the month that you were initially eligible for Medicare, or 2006 when PDPs were first established or you have subject to a penalty.
  • Most Medicare Advantage Plans include prescription drug coverage along with medical coverage.
  • There are no annual maximum out-of-pocket prescription drug expenses for either Medicare Advantage or stand-alone PDPs. Original Medicare & Medigap plans do not cover prescription drug expenses, you need to buy a separate PDP.
  • Medicare-approved stand-alone PDPs are sold primarily by large, for-profit insurers such as Aetna/CVS, Cigna, Humana, and United HealthCare. Medicare enters into contracts with private insurers to provide PDPs that meet specific requirements.
  • Private insurers are also allowed to charge subscribers plan premiums, deductibles and co-pays/co-insurance for medications. They can also exclude specific drugs from their formulary, establish restrictions: such as requiring prior insurer authorization, limit medication quantities and require that subscribers take lower-cost drugs before higher-cost drugs.
  • Each insurer establishes their own drug classifications into pricing tiers and there are significant differences among PDPs regarding the drugs that are excluded/included along with the premiums, deductibles, co-pays/coinsurance that subscribers are required to pay.
  • Although PDPs are not allowed to deny coverage or charge higher premiums to subscribers with pre-existing conditions and chronic diseases, insurers have latitude in establishing restrictions and subscriber charges.
  • Private insurers receive over $95 billion a year in taxpayer subsidies for PDPs. This represents 71% of the total prescription drug plans costs.
  • Unlike the rest of the developed world, in the USA there is no public Medicare insurance for medications or government negotiation of drug prices with the exception of the VA. As a result, the cost of medications in the United States, to treat millions of Americans with life-threating diseases such as diabetes, cancers, multiple sclerosis, Hepatitis B, inflammatory diseases, respiratory diseases, organ transplants are the highest in the world.
  • The cost of medications has become a huge burden on taxpayers; federal, state and local governments; employers; patients and families. This results in more costly health care with poorer outcomes, increases in disability, reduced work productivity and becomes a major cause of personal bankruptcies in the USA.
  • Medicare Quality Star Ratings -Medicare uses a Quality Star Rating System to measure how well Medicare Advantage and Part D plans perform. Medicare scores how well plans perform annually in several categories including quality of care and customer service. Ratings range from Poor (1 star), Below Average (2 Stars), Average (3 Stars), Above Average (4 Stars) and Excellent (5 Stars). Details of specific PDP and Medicare Advantage plan ratings are published on Medicare.gov.

A review of major insurers and their 23 PDPs in Upstate New York including plans by Aetna, Cigna, Express Scripts, Humana, SilverScripts, United HealthCare (UHC)  and WellCare reveal the following observations.

  • Each insurer generally offers 3 plans with different premiums and deductibles. Premiums range from $15.50 a month with a $415 deductible (WellCare Value Script) to $92.50/mo. with a $350 deductible (Express Scripts Medicare Choice)
  • Seven plans have no deductibles with premiums ranging from $39.70/mo.                    (SilverScriptsChoice) to $80./mo.(Humana Enhanced & SilverScript Allure).
  • The Medicare Quality Star ratings of plans vary from 3.5/5 Stars ( 3 SilverScript plans & UHC AARP Preferred) to low-rated plans (EnvisionRx Plus 1.5/5 & three Cigna plans 2/5 Stars). Other plans offered by Aetna, Humana, WellCare, and two UHC plans each received a 3 Star rating.
  • All insurers have developed strong financial disincentives for subscribers who use “non-preferred” brand name and generic medications by establishing medication exclusions, deductibles and up to 50% co-insurance for Tier 4 drugs.
  • Many insurers also charge higher prices for standard pharmacies and 30-day supplies with lower prices for “preferred” retail and mail-order pharmacies. However, many consumers and health care providers are unaware of what pharmacies are preferred and the cost differences that can be substantial.

PDPCostChronicDiseases

  • There are significant differences among insurers in the number of brand name and specialty drugs that are excluded in their formularies. Some diseases including rheumatoid arthritis, multiple sclerosis, diabetes and various neurological, cardiovascular, inflammatory, autoimmune and respiratory diseases have higher-cost Tier 4 & 5 medications and more excluded drugs than other conditions. This creates major conflicts among insurers, physicians and patients.
  • The co-insurance rate for Tier 4 “non-preferred generic and brand” medications in many cases is double the co-insurance rate for more costly Tier 5 specialty drugs. Many plans exclude specific medications or place them in Tier 4, that are used to treat common conditions such as diabetes, inflammatory, autoimmune and cardiovascular diseases in favor of other specific drugs sold by competitor drug companies. Insurers have increased “excluded medications” by 160% in the past 4 years and boast about saving billions of dollars each year by reducing access to treatment and raising patient expenses.

Differences in Subscribers Satisfaction with Plans

One dimension of Medicare’s quality ratings is the analysis of subscribers’ level of satisfaction with their specific PDP or Medicare Advantage plan. Medicare looks at a number of areas including quality of services and customer service. Two area that are important to look at include turnover rates (the percentage of subscribers who leave the plan) and the major reasons for leaving. The following analysis focuses on 23 PDP plans sold in Upstate New York.

SilverScript

  • SilverScript’s three plans: Choice ($37.90), Plus ($73.80) and Alure ($80/mo.) stand out from other plans in that they all have a 3.5/5 Star rating; none have deductibles and they have a low subscriber turnover rate of 6%  but 34% of subscribers who left complained about costs.

UHC

  • UHC AARP 3.5 Star Preferred plan ($77.70) with no deductible) and had a low 7% turnover rate but 56% of the people who left, complained about the high costs.
  • UHC other two plans: AARP Saver Plus ($59.90/mo. + a $415 deductible) and AARP Walgreens ($28.10/mo. + $415 a deductible) have a lower, 3 Star rating and 15% turnover rate with 45% of subscribers who left, complained about costs.

Humana

  • Humana‘s three plans earned 3 star Medicare ratings including its Walmart Rx ($35.70/mo.+ $415 deductible)Preferred Rx ($37.40/mo. + $415 deductible) and Enhanced ($80.50/mo. with no deductible. The plans all had 11% turnover and 31% subscriber complaints regarding costs.

WellCare

  • WellCare’s plans all were rated 3 stars rated and ranged in price from Value Script ($15.50/mo.+ $415 deductible), Classic ($37.90/mo.+ $415 deductible) and Extra ($81.50/mo. with no deductible) all had consistent turnover rates of 13% and 33% complaints about costs.

Aetna

  • Aetna’s 3 star Select ($17.70/mo. + $330 deductible) had 12% turnover and 33% complaints about costs while their 3-star Value Plus plan ($58.80/mo. with no deductible) had 24% turnover and 53% complaints about costs.

In summary, in considering PDPs it is important to confirm if the plans:

  • Include your medications and at what costs
  • Have a deductible expense on your drugs;
  • Have restrictions on access to your medications,
  • Have preferred retail and mail-order pharmacies,
  • Have high subscriber turnover and/or have other significant negative issues identified by subscribers and/or Medicare.

And finally, what is the total annual cost to receive your medications from each plan and the comparative differences in quality, costs and benefits.

Resources

Free resources are available to help you in comparing costs among plans. These include:

Medicare Plan Finder

Provides detailed information from Medicare to compare Quality Star ratings, your estimated annual and monthly cost (premiums, deductibles, co-pays/co-insurance) for your specific medications and pharmacies among available Prescription Drug Plans and Medicare Advantage Plans sold in your community.

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State Health Insurance Assistance Program

Provides free personal and group information/assistance with Medicare issues and questions.

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MedicareRights

Helps people with Medicare understand their rights and benefits, and navigate the Medicare system

References

Congressional Budget Office, 2018 reports

Kaiser Family Foundation, 2018 Data Briefs and Fact Sheets

Medicare.gov

Medicare Rights Center

Medicare Trust Fund Board of Trustees, 2018 Annual Report

The Doctor-Patient Rights Project

 

 

Eight Costly Medicare Mistakes You Can Avoid

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Ten thousand Baby Boomers turn 65 every day and are faced with making a decision of what Medicare option to select from many choices.

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

  • 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 could cost you thousands of dollars and prevent you from receive services that you need from your preferred providers.

Medicare Insurance Options for Seniors

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Original Medicare is the government run health plan for seniors and disabled people that uses private doctors, hospitals and other health care providers.

By comparison, Medicare Advantage (MA) plans, Prescription Drug plans (PDP) and Medicare Supplemental plans (Medigap) are all run by private insurance companies but are subsidized and regulated by Medicare.

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

In addition, some individuals are eligible to receive their health insurance, as a retiree or spouse, through their current or former employer and others receive their health care and medications through the Veterans Administration.

Eight Costly Medicare Mistakes to Avoid

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  1. Your plan doesn’t include your preferred doctors, hospitals, pharmacy and other service providers.

If you don’t confirm with your preferred providers that they have a network contract with the insurer you are considering, you could be facing a huge bill. For example, in some Aetna and United Health Care plans, you could be responsible for paying up to 40% of the cost of expensive services from out-of-network providers.

  1. Your plan’s coverage is too limited and costly for your needs.

Some plans that are sold, such as the Aetna Elite PPO ($0 premium plan), require that you pay the first $1,000 for many medical services and then pay up to 20% for future medical services. In addition, they require a $200 deductible for Tier 3-5 drugs.

While this plan is advertised as a zero premium, if you use a moderate amount of services and drugs, you could be paying up to the equivalent in $1,200/yr. in deductibles before your plan pays anything.

You should not focus solely on the advertised premium cost but rather your anticipated medical, drug and out-of-network needs and your projected total out-of-pocket expenses including premiums, deductibles, co-pays, out-of-network charges and drug costs.

Some regional plans such as Excellus Blue Cross and MVP limit your out-of-network coverage to $3,000 or less and you have to pay 30% of the cost of these services. If you have a serious medical condition that may need intensive treatment, and/or you travel for extended periods and would like the freedom to select specialty medical providers out of your plan’s network for your diagnosis and treatment, you’ll need adequate coverage at an affordable cost.

  1. Medical services that you need are very costly and uncertain.

Most insurers have shifted significant risks and financial responsibility from their company to their subscribers. It is common that plans now expect that subscribers will pay 20% of the cost of many expensive medical services such as Diagnostic Radiology (eg. MRI, CAT, PET scans); Outpatient Surgery; Radiation Therapy; Chemotherapy and other infusions; Dialysis; Medical Equipment and Prosthetics. These treatments could cost you thousands of dollars in annual out-of-pocket expenses.

If this is a concern, you should consider a Medigap plan that will eliminate the uncertainties of high out-of-pocket expenses and give you the broadest nationwide provider options for one monthly premium. With a Medigap plan, you will also need a separate prescription drug plan, but you can generally find both plans for a total cost of under $250 a month in upstate New York. The availability of Medigap plans and their premiums vary significantly by insurer, state and county. Here’s a link to locate plans in your community: Medigap .

  1. Prescription drugs that you need are not covered in your plan, or are too costly.

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Each plan creates their own formulary of drugs that they will cover, restrict, exclude and charge their subscribers. Insurers have been successful in moving subscribers away from brand name drugs to use their “preferred” generics and brand-name drugs by restricting access and offering lower co-pays for their “preferred” medications.

Each insurer separates their covered medications into 5-6 groups or tiers and each tier has the same subscriber dollar or percentage monthly charge.

However, there are significant differences among plans including which drugs they cover, if they charge deductibles and the cost they charge the subscriber. Your drug expenses will also vary, based on if you use a network “preferred”, standard or mail order pharmacy and if your pharmacy is subject to out-of-network charges. This is especially true of high-cost brand name and specialty drugs.

Another trend is that more plans are adding drug deductibles of up to $400 a year. This means that your insurer is not paying anything for your medications until you have paid the first $400.

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Medicare.gov has a very good Plan Finder feature that lets you enter your meds, preferred pharmacies and compare the plan’s total annual cost; what meds the plans cover, restricts and excludes; if there are deductibles, co-pays and restrictions; if there are generic equivalents; the cost of mail-order drugs and other network pharmacy options.

 

  1. You are not receiving federal or state financial assistance that you need and are eligible to receive.

There are a number of federal and state financial assistance programs that help low to moderate-income seniors and disabled persons. These can help lower the cost of your Medicare Part B (outpatient) health care and Part D (medications) premiums and co-pays; energy bills; VA benefits; food; property tax exemptions; housing, in-home services and much more.
benefitscheckupCheck Up is an excellent, free service offered through the National Council on Aging that screens people for hundreds of programs and services in each community across the country. For more information go to benefitscheckup.org/

  1. 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) 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 since you were initially eligible, or June 2006, the start of the program.medicarepenalties

  1. Your choice of plans is not based on your likely needs and costs for the coming year.

You can easily be under-insured for your needs or paying too much in premiums, deductibles and co-pays for the services that you are likely to use in the coming year.

Make sure you’re not staying in your current plan because: it’s easier than changing; a persuasive salesperson, repetitive TV ads or friends have influenced you; you’re attracted to a low premium and not the true full cost of the plan.

You need to have objective and factual information that compares the benefits, costs and value of your various Medicare options to your needs and budget.

If you need help, contact State Health Insurance Assistance Program (SHIP)         877-839-2675 for free assistance in your community

  1. You’re not aware of your plan’s procedures for appealing the denial or restriction of services/medications and other quality of services issues.

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All private Medicare Advantage and Medigap plans are required to have procedures for reviewing and responding to complaints and appeals of decisions that deny or restrict medical services and prescription drugs.

To avoid problems, you should first review the plan’s Summary of Benefits, Drug Formulary, Provider directory and Appeals and Grievance procedures. These procedures include both internal and external reviews and responses to your concerns.

To start the process, you should contact your plan’s customer care center at the number on your insurance card.

You can also engage your medical provider and name a representative to assist you with your concerns. Medicare monitors the nature and frequency of complaints and disenrollment of subscribers from plans. These are factors in Medicare’s rating of plan. For more information, go to Medicare Quality Star Ratings.

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.

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 throughout the country 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 Partnership

 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.