KPS Pulls Individual Coverage

There aren’t many Washington State based insurance companies offering individual health insurance policies and that number is shrinking by one in the months ahead.

The company that is leaving the market is KPS Health Plans and it will affect approximately 2,900 residents of the state.  That is not a huge number, but it is very important if you or someone you know will be affected. This decision only affects those holding Individual policies. This does not affect any other plans the company offers including Medicare, large employer or Federal Employee plans.

Formerly known as Kitsap Physicians Service (KPS) is a Bremerton based nonprofit health care service contractor that was founded in 1946 by the physicians of the Kitsap County Medical Society.  Over the years many similar county based organizations consolidated into what is known as Regence Blue Shield.

KPS retained it’s independence until late 2005 when it became a wholly owned subsidiary of Group Health Cooperative (GHC) the large Seattle based HMO or managed care organization.

Ms. Cathie Valentine-McKinney who is the Director of Public Relations and Communications for KPS stated that the two companies are acting as totally separate entities and each enjoy an independent board of directors.

One aspect of the Affordable Care Act (ACA) that took effect in 2011 was the removal of lifetime maximums. Previously most individual plans had a lifetime maximum of $1 million, now with the cap removed it can have serious consequences for smaller companies. For example a company with a small number of individual members means a few very large claims can have an adverse affect to the whole group.

The cost of cancer and other serious conditions can easily exceed $1 million and with no limits on expenses this poses a potential problem for smaller insurance companies without a large pool of consumers to spread the risk over.

This could be an unintended consequence of the ACA that may be repeated across the country in the future.

Common sense would say that if you are losing your coverage you just go out and buy another plan. Unfortunately it is not that simple.

In Washington state, you have to complete the Standard Health Questionnaire a 26 page form with 220 questions, unless you qualify for one of the ten exceptions.

Having you insurance company cancel your coverage is not currently one of the listed exceptions.

Each of the 220 questions is assigned a point value and if you score over a total of 325 points you are not eligible for an individual plan. But would qualify for the high risk Washington State Health Insurance Pool program whose premiums are designed to be approximately 50% higher than an individual plan.

But wait that’s not all.  Other potential problems that might arise include, pre-existing conditions not being covered for 9 months, children under age 19, deductibles and out of pocket maximums carry over.

The State Legislature is well aware of these potential problems and are attempting to rectify them via House Bill 2739 and Senate Bill 6412.  The details can be found at the following web-site.  http://apps.leg.wa.gov/billinfo/summary.aspx?bill=6412

I am sure something will work itself out prior to the July 1^st termination date. However, Ms. Valentine-McKinney of KPS is highly recommending those families with children under the age of 19 review their options during the State mandated Open Enrollment Period which runs from March 16^th through April 30^th.

KPS states  “failure to apply during this time frame may exclude your under age 19 applicants from coverage until the next OEP, which does not occur until September 16^th to October 31^st 2012.”

As I have stated in previous columns the health insurance industry will be facing unprecedented changes in the coming years that will potentially affect everyone of us.

If this change affects anyone you know please make sure they fully understand their options. Advice is available from your friendly local insurance agent or the great folks at SHIBA.

Phil’s Insurance Opinions

As you are probably aware I am from the UK and grew up under the National Health Service (NHS).  I left the UK at 18 years of age and had not had any real experience with the NHS prior to that time, other than terrible experiences with an NHS dentist before my parents decided to pay for a private dentist. But maybe I will save those details for another day.

However in the past few years I have heard anecdotally from family and friends lot’s of experiences of the NHS in the UK and also in Canada.

For the most part if a person has an emergent situation or a life threatening condition the service is adequate.  For example, when my Mom was diagnosed with cancer she received fairly prompt attention.  They lived in rural Scotland and for some of the tests she went to three different locations all within a 50 mile radius, between Dumfries, Glasgow and Edinburgh.  Dumfries as that was her local hospital 20 miles away and then Glasgow and Edinburgh for different specialist tests and equipment.

In the US we have far greater accessibility to technology where that amount of travel would be unusual. Look at little ‘ol Sequim where we now have a pretty amazing new cancer center with state of the art technology. Amazing.

A few years ago it was reported that Washington State with a population of around 5 million at that time had more MRI machines than did the whole of Canada with a population five times larger.

So, once your condition is diagnosed the treatment is somewhat comparable to the US, with frequently different results.  By that I truly believe that if a person is proactive about their health, conditions will be diagnosed sooner in the US than in the UK and that will lead to a better outcome.  For example, my father is 78 and to my knowledge he has never had his prostrate checked.

That is just but one example. The following comments are from the NHS web-site on Prostate screening and I find them utterly amazing

“It is in some ways a lifestyle choice,” says Dr Parker. “If you want to do everything to maximise your chances of living to a great age, and are willing to risk the side effects of treatment, then PSA testing makes sense.

“If, on the other hand, you are more accepting of your ‘allotted span’, and are keen to preserve normal sexual and urinary function, then you may decide not to have the test.”

Can you believe on the government run web-site they make it sound bad that you want to maximise your chances of a long life, and they then continue to talk about your “allotted span”.

According to the NHS web-site over 1.6 million women a year have a mammogram.  This is for a country of something over 60 million people.  It is available only to those women between ages 50 and 70, and even then only every three years.  Here is a link from the NHS web-site.  http://www.nhs.uk/Conditions/Cancer-of-the-breast-female/Pages/Screeningbreastcancer(female).aspx

I believe the same can be said for Canada.  We have a cousin whose daughter needed a heart transplant as an infant 10 years ago.  That surgery had to be performed in Toronto as that was the only place in the whole country capable of performing such a complex operation at that time.  The cousin became a bit of a crusader and activist and now 10 years later then are very close to having the capabilities for similar surgeries here in Vancouver as opposed to the other side of the country.

The area that I believe both Canada and the UK are lacking is in the treatment of non emergency conditions such as back surgery or hip replacement. The anecdotal reports of extreme waiting periods do have a basis in fact. The NHS has a handbook that outlines what are to be considered acceptable wait times.  The major one is 18 weeks to see a specialist, or 62 days if it is suspected you have cancer.

I don’t know about you but I don’t want to wait 2 months if the doctor’s think I may have cancer, do you???

I sincerely think that the UK system does a certain amount of rationing of services and testing based upon age etc, and this does possibly lead to what has been called “the death panels” in ObamaCare.  From a cynic’s point of view if the government can delay and postpone services it will lead to higher mortality, and if the same government saves money via either social security benefits or in the UK pensions, they have a financial interest and what I believe is a direct conflict of interest in your wellbeing.

My next email will be my opinions on The Patient Protection and Affordable Care Act or what the press call ObamaCare.

A CLASS Act Dies

I know what a depressing title for my first column of a New Year, but more on that later.

As I write this on January 1^st, I have just finished reading all the comic’s in the Sunday paper and was amazed at how many of them made reference to the Mayan prediction of the end of the year in 2012.  If you think that is a likely scenario then you have no need to read the rest of this article as this is about planning for a future hopefully beyond that timeframe.

In 2012 I will celebrate my 25^th anniversary as a licensed insurance agent, and I have a feeling that things are coming full circle.

When I first started in the insurance profession I was primarily offering Long Term Care Insurance (LTCi) which at the time was far more affordable than it is today.  At that time many professionals in the business were somewhat pessimistic in their outlook for the future as it was thought that the government would step in and mandate or cover LTC through either Medicare or another program.

In the ensuing 25 years many attempts have been made on both a national as well as a state basis with very limited, if any level of success.

First, let’s look at the problem.  People are living longer and while most will have a far healthier lifestyle, of those who make it into their late 80’s many will require some level of assistance. Medicare does not cover LTC. Medicare will cover you fully for 20 days, and offer limited coverage up to 100 days for care in a Skilled Nursing Facility, but only if you meet the stringent requirements of three days of prior hospitalization as well the needing skilled nursing. Medicare does cover limited Home Health Care with very real limitations.

Medicare does not cover custodial care if that is the only level of service you require.  Custodial care is when a person requires assistance with Activities of Daily Living (ADL’s). These ADL’s include things like bathing, toileting, transferring from bed to bathroom etc.  These are services that are usually performed by persons who have had minimal training.

Medicare does not cover Assisted Living Facilities, where a person generally have their own room, and can ambulate themselves to the dining room etc.

Four attempts of government influence have been as follows.

In the early 1990’s the IRS created a provision where plans that were designed to be Tax Qualified allowed for LTCi premiums to be included as medical expenses and thereby be eligible for a tax deduction if a persons eligible medical expenses met a certain threshold.

This provision did stimulate for a short period of time increased consumer participation in the purchase of insurance plans.

Secondly the federal as well as several state governments (including Washington) introduced an LTCi plan that was available for employees on a Guaranteed Issue Basis (no health questions) as with limited underwriting for spouses and additional family members.

Thirdly state governments have implemented various attempts to encourage the purchase of LTCi plans.  In Washington Gov. Gregoire sent a letter to all state residents over the age of 50 urging them to consider the purchase of LTCi.  This had a very minimal impact as it was a suggestion or a recommendation with no incentives for the public.

A number of other states have introduced what are called Partnership Plans, where if a person purchased a plan with let’s say $300,000 of benefits, the state would allow that amount to be exempted as assets in the situation of a LTC confinement and application for Medicaid benefits. This has met with greater success as this has a very real and tangible benefit to policyholders.

Lastly and this is where the title of the article comes from. President Obama had introduced a program called the Community Living Assistance Services and Supports (CLASS act).  This bill was to mandate the compulsory purchase of a limited LTCi plan by all employees, both in the public as well as the private sector.

The twin goals of the program was to provide meaningful benefits at a reasonable costs.  These goals were basically incompatible with each other, as with everything in life, you get what you pay for.

This bill was repealed on November 30^th, which by a strange coincidence was the final day of the annual National Long Term Care Awareness Month.

So folks, the news is that you are not alone as millions of other middle class people are in the same boat as you.  How do you plan for a catastrophic personal expense, you hope you will never face.

The costs of care is expensive with assisted living costing around $5,000 per month and skilled nursing homes in the $6 ~ 8,000 per month.  Care in your own home can be a less costly expense but has a whole other set of inherent problems.

The costs are guaranteed to only increase each year, and your options become more unpalatable as your age and health changes.  So, why don’t you start the New Year by reviewing your options and facing the reality of this situation. Don’t procrastinate, learn the facts.

Many fine resources are available online from both the State of Washington as well as the Federal Government.  The local SHIBA office located at 411 W. Washington, Sequim likewise have information and resources, as well as many local insurance agents and financial professionals.

Operation Give Thanks

Click here for more information.  Drop boxes located inside the Castell Insurance offices located at 426 E. Washington Street, Sequim, WA  98382.  Call at 360-683-9284 for more information and to find out how YOU can help us make a difference.

More Medicare Updates

Let me start with an apology — in the past I have apologized for the use of acronyms in my columns — today will be a little different. Today I will apologize for the use of numbers and figures. At heart I am a bookkeeper and nothing gives me more pleasure than trying to make sense out of random facts and figures.

In the past two weeks, Social Security and Medicare have announced benefit levels for the year 2012.

As many of you are only too painfully aware, Social Security has not allowed a cost of living increase for the past two years. Federal law also said that a person could not receive fewer benefits than previous years because of Medicare Part B premiums increases.

So in effect, a person’s Part B premiums of $96.40 have remained the same since 2009. This is only true for people who already were on Medicare in 2009. Folks who became eligible for Medicare in 2010 and 2011 were subjected to higher Part B premiums. In 2011, it was $115.40 or about 20 percent higher than those whose premiums were frozen at the 2009 level.

So that is the background and the stage is set.

Two weeks ago it was released that Social Security benefits would increase by 3.6 percent for 2012. This would amount to an average increase of $38 per month.

Seniors were dancing in the streets and were overjoyed at the generosity of the increase … not really. But they were guardedly optimistic that their benefit increase would not be devoured entirely by the forthcoming Medicare Part B premium announcement for 2012.

Every year we have to wait approximately one week between the Social Security benefit announcement and the Medicare benefit announcement.

During that week, as I talked with other professionals and read numerous blogs and listened to pundits on TV, the consensus was that Medicare would not increase Part B premiums from the 2009 level of $96.40 to the 2011 level of $115.40 in one fell swoop, but rather stagger it over a two-year period.

Last week Medicare announced the plan design and premiums for 2012. Drum roll, Maestro …

Part B premiums will be increasing by 3.5 percent to $99.90, for all Medicare beneficiaries. The majority of beneficiaries will see a very modest increase in the Part B premiums, but those people who entered Medicare in 2010 and 2011 will see a decrease, from the $110 or $115 to the 2012 standard of $99.90.

In addition, the Medicare Part B deductible will decrease from $162 in 2011 to $140 in 2012, a decrease of $22 annually or close to 14 percent.

In the press release announcing these figures, a CMS (Medicare) administrator said, “Health care reform passed last year helped limit costs.”

The cynic in me wants to say this is a blatant case of pandering to the electorate by politicians. However, after further thought, it actually may be true.

To my rough estimation it appears as if the four following items when combined would be close to revenue neutral, meaning no tax break or tax increase. These four items are the modest increase of Part B premiums for most people; the large decrease of Part B for those recent enrollees; the additional premiums high earners pay; and the $22 reduction in Part B’s 2012 deductible.

When we also take into account the fact that those people becoming eligible for Medicare at age 65 are generally healthier than those who turned 65 in 1990, these are all factors that could lead to lower utilization of Medicare services. In addition, Medicare now is covering more preventative services, which should lead to earlier detection and therefore lower costs.

Since the 2012 figures were released last week, I have yet to see any official figures concerning the solvency of the Medicare Trust Fund. It is well-known and documented that the Medicare Trust Fund is scheduled to be insolvent in a number of years.

I personally would have thought that the future viability of the Medicare Trust Fund would have been better served by keeping the Part B premium at the $115.40 (2011 level) as opposed to rolling it back to $99.90.

In closing, I have had a few clients forward me e-mails that supposedly are showing the planned premium increases for Medicare Part B with an increase of up to $247 in either 2013 or 2014. These are just plain old scare tactics used by one political party or the other and have no basis in fact.

Remember not everything you read in e-mails is true; otherwise I would be a multi-millionaire many times over, due to the lottery I won, without purchasing a ticket. Or was it the long-lost relative who died in deepest darkest Borneo, or the banking official from Sierra Leone with unclaimed funds he needed MY assistance in getting transferred to the U.S.

 

Phil Castell can be reached at 683-9284 or PhilCastell@msn.com.

Open Season, Times Two.

In past years, my October article has always been about the Medicare open season or more correctly titled, “Annual Election Period.”   This year’s October article will also follow that same path, and years 2011, 2012 and probably 2013, will also partially coincide with another open season.

I can hear you wondering, “How can you have two simultaneous open seasons?”.

The answer is really quite simple.  Each open season is for a different segment of the population.  The State of Washington instituted a semi-annual open enrollment period for persons under the age of 19 to purchase health insurance.  This period will run from September 15^th through October 31^st, so while not exactly on the scale of a lunar eclipse, we will have an overlap of open seasons for a two-week period.

During this time frame a person under age 19 can purchase either as an individual plan or on a parents plan, coverage on a guaranteed issue basis, meaning no health questions.  Outside of these semi-annual open enrollment periods they are unable to obtain individual coverage unless they have an eligible reason for an exception.

Back to the Medicare open season. The biggest and most important change taking place is the change of the dates.  Starting in 2011 and beyond, the Annual Election Period will be from October 15^th to December 7^th.  Yes folks, the same December 7^th that will live in infamy according to the famous FDR speech of nearly 70 years ago.

This change makes it highly likely that if a person chooses to change their Medicare coverage for either a Medicare Advantage Plan, or a stand alone Part D prescription drug plan, they will have their new ID cards in hand prior to the January 1^st effective date, and have a smooth transition from one plan to the other.

From my initial review of plan details which were released on October 1^st,

I think this could be a quiet year for plan changes.  Most of the plan changes appear to be incremental and not drastic in scope. This is where I try not to bore too many people as I do go into some details and numbers. So here goes.

In 2012 Washington State will have choices of 30 different Part D prescription drug plans.  This is down slightly from the 32 choices in 2011 and down drastically from the 50+  plans of the first couple of years of the programs existence.

Of those 30 plans, 27 are continuing plans with 5 plans having chosen to leave the marketplace and 3 new plans entering.

Four of the five sponsors will have other plans available in the state and will just move clients to another of their options.  The only plan that is leaving without a replacement is a plan offered by Rx America and was co-branded with CVS (a large national drug store chain with no Washington State physical locations).

The three new plans for 2012 are from existing participants and we have no new players in the marketplace.

Of the 27 continuing plans, 9 have actually lowered their premiums for 2012, and 18 have increased their premiums.  The premium increases range from a very paltry 10 cents per month for the most expensive Humana plan, to an eye staggering $31.20 for the Unicare Rx Rewards Plus plan.  On the decrease side, the decreases ranged from $1 for the Silverscript Value to an impressive $25.80 for an offering from Aetna.

We have seen quite a lot of reshuffling and merging going on behind the scenes so here are some of the ones that jump out to me.

Aetna has dropped the plan it had co-branded with Costco.  Silverscript has actually purchased the Community Care CCRx  product line from Universal American.  For 2012 Silverscript will be offering both product lines, but as of this date have not appointed any agents to represent the Community CCRx plans. Silverscript have further expanded their branding efforts with the CVS drug stores.  Envision Rx is now co-branding with Rite-aid. We are even seeing more preferred pharmacy discounts than we knew about so make sure you are using a preferred pharmacy in order to receive the biggest discounts you are eligible for.

One of the new plans that appears to be attractive is from First Health Part D. It is called the Premier Plus plan and has a monthly premium of $25.20 with a $0 deductible. It has a $0 co-pay for preferred generics at Walgreens and also Wal-Mart, higher co-pays at other stores. For example, a preferred generic would be $7 per month at other pharmacies. So, at first glance this plan appears to be far more attractive than the lower priced Humana Wal-Mart plan $15.10 because it has a $0 deductible whereas the Humana plan has a $320 deductible, I would strongly recommend that you, and all readers do the following.

Check the formularies of your current plan or any other plan you may be interested in.  I know it can be boring or tedious to read the fine print, but you better believe me the old phrase, “the devil is in the details,” is definitely true with these plans.

By now everyone on a Medicare sponsored program that includes drug benefits,  should have received their Annual Notice Of Change (ANOC) package.  Please take the time to review your benefits, premiums and far more importantly, the formulary to ensure your current medications will be covered for 2012.

The following are ways that you can obtain assistance to review your options for 2012.  The easiest is to visit the wonderful web-site www.medicare.gov .  Enter all your pertinent information and it will miraculously prepare a report with plan options including premiums, co-pays and deductibles for all 30 plans available in Clallam County for 2012.  This same service is available 24/7 7 days a week from calling those same folks at Medicare at 1-800-633-4227.  Local help is also available in person from visiting the local Statewide Health Insurance Benefit Advisor’s (SHIBA) located at 411 W. Washington St or your local insurance agent.

Free Financial Safety Seminar

Financial  Safety  Seminar

Castell Insurance is pleased to invite you to a free and informative seminar about financial safety.

Financial safety includes protection of your finances from others, as well as protection in turbulent times in the economy.  We will offer great tips and protection advice regarding identity theft and the fraudulent use of your personal data, as well as safe places for your money to grow in these uncertain times.

What:                  Financial Safety Seminar

When:                 September 14^th 10am & 1pm

Where:                Holiday Inn Express

                               1441 E. Washington St

                                Sequim, WA 98382

RSVP:                   Call 683-9284  as seating is limited

 

We will be holding two seminars due to the anticipated response,  so please call today to reserve your seat, and don’t forget, you are welcome to bring a friend.

Sincerely,

Phil  Castell