2010 Medicare Part D Changes

In last weeks article I talked at some length about the changes that would be occurring with the Medicare Advantage Plans for 2010.   This week I will be explaining  changes in the ever popular Medicare Part D programs for 2010.  It is important that you read very carefully any letters or packages you receive from your insurance company.  Check that all your medications are listed in the formulary, and that you understand how the co-pays and deductibles will work. If you need help free assistance is always available from the following people:

• You can contact Medicare directly at 1-800-633-4227,
• The local SHIBA folk can be reached at 452-3221 and they hold free clinics at the Sequim Senior Center each Tuesday between 10am ~ Noon
• Or, call your friendly local insurance agent – Castell Insurance

In addition I find that the www.Medicare.gov web-site to be extremely useful in helping decipher the jungle, for those who are comfortable using a computer.

Many people do not bother to wade through all the fine print, but you should.  If you do not, you may regret it for all of 2010.   For 2010 the number of plans offered in Washington State has dropped slightly to 44, and of this number a couple of plans are not open to new enrollees, but are just allowing their existing clients to keep their coverage if they so choose.  The biggest change I have noticed this year is that the number of plans that are offering programs with zero deductibles has dropped sharply, from 27 plans in 2009, to 16 plans in 2010.  Over 60% of the programs will have deductibles ranging from $50 to $310 in 2010.

The lowest plan available is just $8.80 per month and is offered by First Health and is only available directly from the company, they do not allow insurance agents to assist members in enrolling or dealing with service issues. This plan has worked fine for persons who do not take any medications at all, and just want to be in the Part D program to avoid penalties at a later date.

Another company that shall go unnamed has changed my commission level to the princely sum of $0. When I have shared a copy of the commission schedule with people in my office their reactions have been funny to watch.

The Humana Standard PDP (that is to be replaced) was the plan that was originally only $6.93 when the plans were introduced 4 years ago.  That premium has rapidly climbed to over $30.

The new lower cost plan from Humana the Value plan has a premium of only $18.60 per month, but the formulary or list of covered medications is not as comprehensive. For example it does not cover the cholesterol medication Lipitor. So, if you enrolled because of the low premium and you took Lipitor, you would be stuck paying 100% of the cost of the medication all year.

Talking of Lipitor, I have completed a little research on that one medication on the 42 plans available for 2010. These plans are offered by 17 different companies.  Of  these 17 companies at least 5 of them offer plans that do not cover Lipitor. These 5 companies are Humana, Unicare, Sterling, United American and EnvisionRx.

Let’s go one step further.  By now everyone is aware of how the insurance companies classify medications in different “Tiers”; this is primarily how much your co-pays will be. Consider the following.

Lipitor is as follows with these companies:

• Humana Enhanced Plan, Tier 2, $45 co-pay
• Aetna (Costco plan)  Tier 3, $33 co-pay
• Coventry Premier Plus, Tier 4, $90 co-pay ~ Based upon a percentage of retail
• Group Health ~ Tiers and co-pays vary depending upon strength of dose

So, you can see the formularies are all completely different as are the co-pays, a Tier 3 with Aetna is less costly than a Tier 2 with Humana.  Things are definitely getting far more complicated as far as tiers and co-pays.

Talking about Tiers, most companies in the past have had 4 basic tiers.  Tier 1 for generics, Tier 2 for preferred brand, Tier 3 for non-preferred brand and finally Tier 4 for speciality drugs.  Many companies now have expanded that to 5 Tiers and in the case of CVS Caremark Plus they even have 6 different Tiers.

In the case of CVS Caremark, they have enhanced benefits if you shop at a CVS drug store or purchase online. They do have one store in the whole State of Washington, and it ain’t on the Peninsula.

Both Humana and Aetna offer plans that have a $0 co-pay if you purchase 90 days supplies via mail order.  Did I say purchase?, how can you purchase something for nothing???

The surprising thing is that the Aetna Plan that offers this tremendous benefit is the Costco branded plan.  The other two Aetna plans do not even give a discount if you order generics via mail order.  So, I wonder if the genius at the Costco Headquarters who signed off on a Costco branded product that actively encourages people NOT to visit the store will find they will be promoted or fired. Any comments??

Castell Insurance will be representing over 50% of the plans available including AARP, Humana, Sterling, Group Health, Aetna and numerous others.  In addition we never charge for our services as all compensation is paid by the companies we represent.

As always at this time of year, I urge people to take care and read all the material you receive from your insurance plans.

www.castellinsurance.com

2010 Medicare Plan Confusion

We are fast approaching the fifth Medicare Annual Enrollment Period (AEP) for Medicare Part D and Medicare Advantage Plans, and this year I am seeing far more changes than ever before.   This column will deal with the Medicare Advantage Plans as this is where many Peninsula residents will be seeing the most changes.

It is imperative that you read very carefully any letters or packages you receive from your insurance company.  If you do not understand what they are telling you, I strongly recommend you get assistance to make sure you are fully aware of your options.

You can contact Medicare directly at 1-800-633-4227, the local SHIBA people can be reached at 452-3221 and they hold free clinics at the Sequim Senior Center each Tuesday between 10am ~ Noon, or call your friendly local insurance agent.  In addition I find that the www.Medicare.gov web-site to be extremely useful in helping decipher the jungle of information.

Many people do not bother to wade through all the fine print, but you should.  If you do not, you may regret it for all of 2010.  These warnings are not meant to be scare tactics; the following are some examples of what is changing:

Thousands of people all across the Peninsula will be receiving letters from their insurance companies telling them that their coverage is not going to be available in 2010.  These terminations include plans from Coventry Health Care, Secure Horizons and Aetna.  These are just the ones I am aware of so far.  If your plan is being non-renewed you have many options available to you on a guaranteed basis.  Do not panic, but do not ignore it either. Learn what your options are.

One option is to return to original Medicare and purchase a supplemental policy.  But if you have been satisfied with your Medicare Advantage plan, other similar plans will be available for 2010.

In my September column I wrote that Group Health was considering re-entering Clallam County in 2011.  Boy, was I ever wrong.  Forget 2011, it is 2010.  They are in the midst of holding educational seminars in Sequim, Port Angeles and also Port Townsend.  They will be in the populous portions of the Peninsula, and will not offer coverage to the West End of Clallam or down the Hood Canal.  The plans appear to be very attractively priced and I am sure will be very popular to many people.  The one big advantage of the Group Health Plan is that it is a PPO plan that comes with a list of providers that will accept the plans terms and conditions.  The web-site lists 132 providers here in Clallam County, however that number includes providers who are based elsewhere and are only in Sequim for a day or two each week.

Most of the competing Medicare Advantage Plans, other than Regence Blue Shield, are of the PFFS variety where there is no list of providers and it can be hit and miss as to which provider or hospital you can go to.

The Group Health people were in my office this week, and I am pleased to say that they are contracting with local agents to assist you with their plans, as well as provide service to you throughout the year.  So far we are the only local agency who has expressed any interest in representing their fine plans.

Another big change on the Medicare Advantage side is regarding Sterling Health Plans.  Sterling were the very first company Medicare used on a trial basis for these plans way back in the mid-1990’s when the plans were called Medicare+ Choice.  Until this year they have only allowed captive agents or employees to represent their products.  This year they have decided to expand their marketing clout by allowing independent agents to represent them. Needless to say we at Castell Insurance will be offering their products as appropriate.

I know that if you are still reading this you are probably numb with so many details, believe me you are not alone.  I have an expanded version of this along with more details available on my web-site at  www.CastellInsurance.com , so if you are a glutton for punishment please check it out there.

As always at this time of year, I urge people to take care and read all the material you receive from your insurance plans.

Medicare Part D Annual Notice of Change….

A.N.O.C…. A.N.O.C.

Opportunity is a knocking.

Sorry for the feeble attempt at humor. Believe me there is nothing funny about this time of year for many people.

A.N.O.C. is an acronym for the Annual Notice Of Change, that the Medicare Part D and Medicare Advantage plans have to mail to each and every one of their subscribers at this time of year.

If an insurance company is choosing to leave a marketplace, by law they have to give subscribers 90 days notice in writing.  A few large insurance companies are choosing to exit the Medicare Advantage marketplace in 2010 and so their subscribers will have received a notice in the past few days outlining this to them.

One of the largest that we have here on the Peninsula is Coventry Healthcare, they have decided that the Medicare Advantage plans are no longer a good fit for their business model. In addition plans from Aetna and a few smaller companies have likewise decided to leave the Peninsula.

Is this because of reduced Federal reimbursement rates, higher than anticipated claims, a lack of provider networks ? The answer is probably a combination of all three as well as others we may not be aware of.

So, what are your options?. Here I can share some good news.

The Federal government mandates that if you lose your coverage involuntarily you have a “guaranteed” right to purchase any plan you choose.  This can be a plan similar to the plan you had, or a plan that is different from what you had.

For example if a person had a Coventry Advantra Freedom plan and they have received notice that their plan will be terminated at the end of the year their options are as follows.

They could purchase a similar Private Fee For Service (PFFS) plan from companies like Secure Horizons for a relatively low premium. However these plans will probably go away at the end of 2010, and then you are back at square one.

You could purchase a Preferred Provider Organization (PPO) plan from Regence Med-Advantage.  These plans should still be available in both 2010 and also 2011, however beware of the costs of these plans as they appear to be rising very rapidly. If you want drug coverage with a PPO plan you must purchase it from the same company.

Or, you go back to traditional Medicare and purchase a Medicare Supplement plan or Medigap plan from anyone of a number of plans available in Washington State. These are the plans most people are familiar with from companies like AARP, Mutual of Omaha, Regence & Premera, and go by letters “A” through “J”.

Plans K & L are available, but I have never seen one yet.  With a Medicare Supplement plan you can choose any Part D drug plan.

Many people I have spoken to who have tried the PFFS plans are quite happy to go back to traditional Medicare and a supplement. They may not have liked the uncertainty of the co-pays when they needed treatment, or even finding out some hospitals in the Seattle area did not accept the plans at all.

However, many people either can’t afford or don’t want to pay the much higher premiums of Medicare Supplement policies.  In addition people who are under age 65 may find they have very few options as the number of companies offering Medicare Supplement plans for persons under age 65 is relatively low.

So, the bottom line is, if you get an “Annual Notice Of Change” letter please make sure you read it very carefully as it may contain very important information about the plan benefits in 2010.

Oh yes, please do not forget you can always review your options at www. Medicare.gov or 1-800-medicare (1-800-633-4227), the local Statewide Health Insurance Benefits Advisors (SHIBA) 452-3221, and your local health insurance agent.  By the way, no one can ever charge you a fee for assisting you review your options, so please seek help if needed.

Private Label Insurance.

Before I start with the subject of this months column, I would like to provide you with an update to last months column. In that column I explained that I had written to 20+ government officials, both elected and appointed regarding my observations and opinions of the Medicare system. The letter was mailed on May 1st, and as I write this on June 26th I have had an underwhelming response from two recipients. For this I would like to publicly thank Sen. Patty Murray and Mr. Daniel Schreiner, the Medicare Beneficiary Ombudsman, for their responses. To those other recipients including President Obama, Rep. Norm Dicks and Kerry Weems, CMS Administrator I say “Shame on you for not having your staff have the courtesy to reply.”

Now for the real subject of this month’s article. Let me explain what the phrase “Private label” means for most people. When you are in the grocery store and you are looking for ketchup you have a choice between Heinz, Hunts or usually a store brand. I believe most people recognize that the store brand is probably made and packaged in the same factories that produce the brand name, and the ingredients will be virtually the same as well. Insurance plans are also something that can be made “private label”. The most recent version of “private label” insurance that I am aware of is very interesting. It is concerning Medicare Supplement insurance. Most readers are aware that since 1993 individual Medicare Supplement plans have been standardized where the benefit levels are identical from company to company. The main criteria for choosing a company are usually premium, service and reputation. Most people are willing to switch if the premium savings are substantial enough. In the State of Washington we are very fortunate that people can switch from one insurance company to another at any time regardless of their age or health. In addition there are no exclusions for any pre-existing health conditions. The insurance company that has released the “private label” plan is called Woodmen of the World. It enjoys an A+ rating from A.M. Best. How does this “private label” plan work. Woodmen of the World, while they have a very high rating they have little experience in the Medicare Supplement business. They have contracted all the administrative work out to another company that has far more experience and already has all the necessary systems in place. The administrative company will receive all the applications, issue all the policies, provide service and pay the claims for Woodmen of the World. So, the policy is Woodmen of the World in name only, as all other functions are handled by the administrative company. In this instance Woodmen have contracted with Mutual of Omaha to provide all the administrative work. The premium for the Plan F with Woodmen is a very low $ 154.17 per month. When this is compared to $186 for Mutual of Omaha, and well over $200 per month for Regence Blueshield, Premera Blue Cross, State Farm and Kitsap Physicians Service the savings per person can be quite dramatic, in many cases over $700 per year per person for identical coverage. The question I hear most frequently is “Why can their premium be so low?” It is really very simple, all the other carriers who have offered Plan F in the State for many years have a very large and rapidly aging clientele. The age of the clients translates into more claims and that translates into higher premiums. In my opinion, when a company is new to the marketplace and the state they offer a very competitively priced plan to build marketshare and name recognition. Like Humana did in the Medicare Part D arena a few years ago. What usually occurs is that over the next 5 to 7 years the premiums of the Woodmen Plan F will probably increase to be more in line with the other companies. However, if you can save hundreds of dollars for a number of years for exactly the same benefits why wouldn’t you? We are currently in the process of moving hundreds of clients to this plan to save them money. Why do we do this? We believe as a small town local agency it is imperative that we offer the best plans available to our valued clients. In today’s economy this is especially true. I hope you have enjoyed this behind the scenes glimpse into the industry.

If I were the Medicare Czar….

This week’s blog is regarding the Medicare Part D and Medicare Advantage programs and changes I would like to see implemented.  I wrote a letter to President Obama and 30 other politician’s and government administrators outlining these changes.  The two links are for the letter and then an addendum I called “If I were the Medicare Czar”.