theabcsofmedicare

Exposing Looney Left Lie #30 About United States Medicare: Most of You Don't Save Thousands of Dollars in the Part D Donut Hole

Anything you read about the Part D donut hole is just more looney left lies. The Obama-adminstration's Health and Human Services (HHS) progagandists are great for putting out press releases three or four times every month claiming something like millions of Medicare beneficiaries have saved tens of millions of dollars because of the Patient Protection and Affordable Care Act (PPACA). But they never tell you that it is the same relatively few million beneficiaries -- out of over 50,000,000 of us -- who are saving the money over and over. And they never tell you that the people saving the tens of millions of dollars are relatively or outright rich (that's because poor seniors were never affected by the Part D donut hole that was changed by PPACA thanks to George Bush).

The trick in understanding this looney left lie is to understand how the Part D donut hole¹ works. The relatively few Medicare beneficiaries who unfortunately are affected by it even slightly are exposed to roughly $4000 in out of pocket (OOP) costs while in the donut hole because the top line of the initial Part D spend phase (a little below $3000) is retail cost of the drugs, not beneficiary OOP. But the roughly $4500 top line number of the donut hole is true OOP. To reach around $3000 retail, the beneficiary would probably only spend about $500 OOP and then -- before PHRMA gave its big discounts in return for getting the Obamacare business -- the beneficiary would have had to spend another $4000 to get out of the gap.

Now -- as of 2015 -- PHRMA gives the PPACA-enshrined bribe discount of 50% to which it agreed before PPACA, Medicare pays another 10% or so for brandname drugs² (going up to 25% in 2019), and the beneficiary is responsible for 25% (just as he or she is in the initial spend phase on average). It used to be that the relatively few people who needed a lot of drugs and are therefore fully affected by the donut hole would get about $15,000 worth of drugs for about $3,000 to $4000 (and much less in a state with a good pharmaceutical assistance program). When all the monthly blah blah blah from HHS is over in another 10 years, the relatively few people who are so chronically ill that they need these many drugs will save a few hundred dollars more than that on average (inflation adjusted).

According to the Medicare actuaries, the vast majority of us buying Part C or Part D drug coverage will pay higher premiums to make up for that few hundred dollars in savings for the few. I believe that's fair because I might need a lot of drugs some day and that's what insurance is for. But please stop lying to me about it you looney lefties.

And oh by the way, only a few percent of all the people on Medicare ever spend all the way through the donut hole and are fully affected by it.

¹Not that anyone would ever really support repealing the donut hole's so-called closure nor would big PHRMA reneg on its off the books pre-PPACA promise to give donut hole discounts even if PPACA were repealed

²The rules are slighly different for generic drugs today but generic drugs do not usually cause much of a problem. And the rules will be the same in 2020

United States Seniors: What's Next If You Want a Public Part C Medicare Advantage Supplement

OK, Medicare people. its like Lent. Seven weeks to go before so-called Medicare open enrollment ends even though the priests tell you it only lasts 40 days starting last Wednesday.  So... IF...

1. You don't get a Medicare supplement from a former employer. (If you do get a Medicare supplement from a former employer, this whole October 15 to December 7 thing most likely means nothing to you.)
2. You agree you need a Medicare supplement (like about 95% of the rest of us on Medicare).
3. You don't get Social Security Extra Help/LIS and you are not signed up for a State Pharmaceutical Assistance Program. (If you are on either of these plans, the whole October 15 to December 7 thing also means nothing to you; you can change plans as often as every month. But this is still a good time to think about it because everyone else is doing it and you can compare notes.)
4. You compared private Medigap supplements with public Part C Medicare health plans.
5. You decided to go the public Part C route on the "Medicare and You" decision tree¹ (see image above). 

So what's next? You can make your life very complicated and call AARP, Blue Cross, Humana, and all the local insurance companies. Or you can just go to Medicare Plan Finder and enter your zip code. Then come back to this site and follow the other steps that will be added day by day beginning October 19.

¹Even if you decided on private Medigap insurance, you probably need a Part D drug plan unless you have creditable coverage from a former employer or union or the VA. If that's the case, the how-to over the next few days also applies to you as well.

Exposing Looney Left Lie #29 About United States Medicare: Obamacare's Cuts to Medicare Were Not All about Medicare Advantage

A very common looney leftist claim by those Democrats and Socialists that admit that the Patient Protection and Affordable Care Act (PPACA) for Americans under 65 is basically funded by cutting Medicare funds¹ intended to support Americans over 65 goes something like this:

“The truth is that the Affordable Care Act² originally cut $500 Billion from Medicare Part C, the Medicare Advantage Program.”

That sentence is both incorrect and possibly misleading.

• Incorrect: PPACA “originally” cut $500 billion from all of Medicare, not just from the public Part C Medicare Advantage health plan program. Most of the $500 billion cut was from Original Medicare Parts A and B, not from public Part C Medicare Advantagte. And most of that was from acute care hospitals and skilled nursing facilities, funded via Part A.
• Possibly misleading: The word “originally” is key because the $500 billion number covers a 10-year period and the number goes up every year; it is now around $800 billion for the period 2015-2024 (whereas the “originally $500 billion ” period was from 2011 to 2020).

¹Many lefties hold on to the canard that PPACA does not cut Medicare at all but actually strengthens it financially. That was quickly debunked by the Medicare actuaries right after PPACA was enacted and President Obama himself no longer says that (but I'm sure Goebells did not believe what he said either).

²The left never uses the law's full name for some reason that escapes me; "patient protection" is a good thing

United States Seniors: What is a "Zero-Premium" Part C Medicare Advantage Plan... and When to Choose One

Earlier Medicare how-to/why-and-why-not posts on this web site concentrated on the big picture and pluses and minuses of private Medigap insurance (the left hand side of the "Medicare and You" decision tree--see image below) as a supplement to your Original Medicare coverage.

About half of you who buy Medicare supplement insurance individually (not through a former employer or union) are under the gun to make a capitated-fee Part C managed care vs. traditional fee for service unmanaged Medigap decision by December 7th. The other half of you are either on Social Security Extra Help/LIS or a state pharmaceutical assistance program and can make a decision at a later time if you wish (but it makes sense to do it now).

If you are thinking of Part C (make sure your doctor and a nearby hospital accept it) let's start with the pluses and minuses of zero-premium Part C plans. For 2015, there are fewer than in years past because of the Patient Protection and Affordable Care Act but they are still out there and a good option for some beneficiaries,  How can the insurers charge no premium you ask? What's the catch?

The answer is that insurance companies that administer Part C Medicare plans receive a capitated payment for you and pass that money on to your providers according to rates they have negotiated with their network of providers ahead of time. (That's the way all capitated plans -- mostly HMOs -- work; it has nothing to do with Medicare.) Conversely the insurance companies that administer Original Medicare Parts A and B and private Medigap supplemental plans pay providers only each time a service is provided and they have to pay a rate set by the government. (Of course, these are all the same insurance companies administering traditional Medicare, Medicare Advantage, Medigap, Medicaid, Obamacare, fire insurance, and so forth.)

The plans with zero premium usually get to that price by offering you a higher annual out of pocket (OOP) limit and/or higher copays than most Part C plans. But traditional Medicare has no OOP limit and much higher co-pays. For example, some zero-premium plans in Massachusetts where I live have a $6700 OOP max whereas the same insurer's other Part C plans cap annual OOP expenses at more like $3400 (do not confuse OOP limits with deductibles; OOP limits are good things; deductibles might be bad things). Zero-premium plans have higher co-pays as well. Some Part C plans¹ may or may not have more constricted provider networks for their zero-premium plans, particularly if they are PPO  plans rather than HMO plans. That's another way they can afford to offer a Part C plan at no cost to you.

¹There are also plans with no built-in drug coverage, designed for people on Medicare who get their drug coverage from a former employer or the VA or some other "creditable" source. The word is "creditable" not "credible" and it's important.

United States Seniors: If You Choose Medicare Advantage, You Do NOT Replace Original Medicare

There is a constant refrain this time of year in far-left-wing bad-Medicare-advice columns from groups like Consumer Reports, Kiplingers, Reuters, the New York Times, Time, The Boston Globe and so forth that says public Part C Medicare Advantage health plans replace Original Medicare Parts A and B. That is not true. Public Part C Medicare Advantage health plans add to Medicare Parts A and B. You cannot even choose Part C unless you first sign up for both A and B¹.

Public Part C Medicare Advantage plans are like private Medigap insurance plans except they are public (public vs. private also doesn't mean anything in Medicare; that's another one of the deceptions that pop up during the annual Part C and D enrollment period currently in process in the left-wing press). Both Medigap insurance and public Part C Medicare Advantage plans add to Medicare Parts A and B. It's just that the two types of supplements add different things in different ways. The basic difference is that Part C is usually an HMO and Medigap is basically like old Blue Cross Master Medical policies. There are benefits and limitations of both.

This incorrect message must have bothered the people in Washington that run Medicare so much that they changed the wording in the "Medicare and You" booklet a few years ago to make it crystal clear that Part C Medicare Advantage is just a different way to get Original Medicare, not a replacement for it. 

Because of this untruth being spread by someone (besides Democratic politicians, the people that run skilled nursing facilities seem to be the worst offendors), the government specifically says on page 75 of "Medicare and You, 2015":

"If you join a Medicare Advantage Plan, you still have Medicare. You will get your Medicare Part A and Part B from your Medicare Advantage Plan..."

Even the Democrat-party civil servants that run Medicare want you to know:

• You get all the same benefits (and usually more but sometimes lower premium costs instead but you will probably be limited to a network of providers)
• You give up no rights (of appeal and otherwise) that you have through Original Medicare.
• You can always go back to just using Original Medicare² -- only Parts A and B -- if you want. Almost no one does that but nothing will stop you from doing it.
  

As I explained in an earlier post, there are good reasons to choose a private Medigap plan instead of Part C. And there are different good reasons to choose a public Part C Medicare Advantage health plan instead of Medigap. Just don't choose one or the other for the wrong reason.

¹The same is true of Medigap supplements and many private group retiree plans. To choose Medigap, you also first have to sign up for A and B

²This is true as of October 17, 2014 and has been true for many years but it could change any time in the future if the government wants to change it. In Massachusetts where I live you can go back to just having Original Medicare and also immediately sign up for a private Medigap plan with no questions asked at least once a year and more often under many circumstances.  But that is not true in all states so be careful if you live outside Massachusetts or if you spend part of the year here in Massachusetts but are a legal resident of another state and get your Medigap policy in that state.

United States Medicare: New York Times' Attempt to Scare Seniors Into Private Insurance Before Open Enrollment Based on Totally False Reporting of Old HHS Memo

On October 13, I wrote about a New York Times article by Robert Pear that looked like more than the usual and ongoing Gray Lady much-ado-about-nothing far-left-wing attack on Medicare Advantage. I felt that it might be the worst piece of New York Times journalism ever. Now my opinion has been confirmed. Here's the top of the first page of the HHS memo:

Compare what the memo says to what Pear said and I think you will agree. It turns out all the breathless charges by Robert Pear were based on around only 30 audits (see circle in image) conducted over a year ago and that the vague memo¹ on which Pear based his article was just kind of a standard bureaucratic "lessons learned" letter that complemented Part C Medicare Advantage insurance companies² (see underline in image) as much as it criticized them and that the memo was weeks old, and had nothing to do with the so-called Medicare open enrollment period that began October 15 as Pear implied.

The lengths that the far left will go to scare seniors is disgusting. 

¹In case the link looks unfamiliar, it is a Google-cached version of the memo. HHS makes it very hard to find on its web site. If you want to put a version of the pdf file onto your device for easier readability of the appendices, simply click on the link provided at the top of the cached page.

²Not that the insurers give a damn. They make their pretty predictable 5% profit from the government or companies that self insure no matter which option -- private vs. public, Medicare or Medicaid, Obamacare vs. unsubsidized, group vs. individual -- you choose or get assigned to

Another Right Wing Ideologue Muddies the Waters of United States Medicare Reform

Most but not all bad information about Medicare comes from the left. But the right is not short on saying stupid things about Medicare; this aritcle by some Heritage type says nothing but implies that changing Medicare is worse than doing nothing. What a recipe for disaster. it concludes:

"As Americans live longer lives, and have fewer children, it will not be possible to sustain indefinitely the current policy of fully subsidized Medicare benefits for everyone over the age of 65.

"Addressing this demographic problem may require asking future retirees to pay more for their Medicare coverage. This can be done without undermining the significant value the program provides for these retirees. Medicare's main benefit is that it ensures access to insurance for everyone over the age of 65. Regardless of their health status, the same implied premium applies to all Medicare beneficiaries. This is a significant benefit that a fully private market would not be able to provide. 

"Medicare could be reformed so that it continues to offer insurance to all Americans over the age of 65 at a premium that is the same for every enrollee. What would change are the tax-and-transfer features of the program that are the source the looming financial shortfall. Workers would be asked to save more during their pre-retirement years so that they could pay for more of their Medicare premium when they retired. That is a logical response to the massive demographic changes already underway, and a response that would ensure Medicare is able to provide secure insurance for seniors for many decades to come."

Wow. Nothing this right wing extremist writes could be further from reality.

1. There are not now and have never been "fully subsidized Medicare benefits." Medicare pays less than half we seniors' healthcare costs on average and that has always been the case.
2. And certainly future retirees are going to pay more for their benefits, just as we who are currently retiring (or going on Medicare at least; many of us cannot afford to retire) are paying more than our parents (of course that's true absolutely but I am giving the righty the benefit of the doubt that he means as a percentage of total).
3. And millions of people on Medicare already pay much more than the standard premium for their Medicare insurance today. It is estimated that 20%-25% of people on Medicare will pay more than the standard Part B premium by 2020. This long-ago implemented means testing was a "feature" of both George Bush's Medicare Modernization Act of 2003 and Barack Obama's Patient Protection and Affordable Care Act of 2010 as amended.

What is this guy thinking of?

United States Seniors: If You Need Medicare Help, It's Available Free at a Site Near You!

The Centers for Medicare and Medicaid Services (CMS) funds 54 State Health Insuance Assistance Programs (SHIPs) in the 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands. The programs often go under different names in various states such as HICAP, SHIBA, SHICK, SHINE, and so forth. Unfortunately the are also often controlled by whatever political party controls the respective state government and that is too bad.

In FY2011, the last year for which I could find data, Congress appropriated $50 million in funding for the SHIP program. This includes direct grants to states and support contracts including the SHIP National Resource Center contract and the SHIP National Performance Measurement and Reporting contract. The SHIP network is comprised of paid staff, approximately 1,300 local sponsoring organizations, and 15,000 counselors (approximately 55% are volunteers).

CMS expects SHIPs to provide access to beneficiaries statewide; provide access at the local level; provide access to hard-to-reach populations; have a well-trained workforce (paid and volunteer); provide accurate and timely information to beneficiaries; participate in CMS education and communication activities; and report its activities to CMS through an established CMS data system. All the volunteers pass a national recertification test annually

United States Medicare In Just Five Paragraphs

It's opening day of so-called Medicare open enrollment. If you can't read the full 150 page Medicare and You 2015 booklet, here's the story in five paragraphs:

 

• Almost everyone on Medicare gets Part A Medicare. It's for ADMITTED acute and skilled-nursing-facility (SNF)/rehabilitation care¹, hospice, and blood. Almost everyone of Part A gets it for free as long as they worked and contributed through Medicare payroll taxes any 10 years in their life. (Others can buy in and some who paid a Medicare payroll tax less than 10 years get a cheaper buy-in.)
• Almost everyone on A (and a very few not on A) choose to get optional Part B Medicare. It's for OBSERVED acute care, outpatient charges, ER charges, emergency ambulance trips (emphasis on emergency), doctors, durable medical equipment, drugs administered at doctors' offices or outpatient, and a few other things -- particularly some good preventive tests.
• -- 70% of the people on B pay $104.90 a month this year and will pay exactly the same in 2015
• -- 15%-20% of the people on Part B get Part B for free or near free (or at least qualify for it free even if they have not asked) through Medicaid. 
• -- 10%-15% of people on B will pay a surtax on top of the $104.90 in 2015 because they took in over a certain amount of money in 2013.
• Almost everyone (over 95%) on both A and B (that is, over 90% of all the people on Medicare) feel the need to supplement A and B because it is not very good insurance compared to what you got from your employer or purchased yourself before you turned in 65 (and even compared to the new Obamacare insurance). Medicare Parts A and B -- called Original Medicare -- have no catastrophic coverage, no annual out of pocket (OOP) limit, no drug coverage, no annual physical, no vision benefits, high deductibles, high co-pays, and a long list of other problems.
• One of the ways to supplement Original Medicare (if you do not get a supplement from a former employer) is through a private Medigap plan. Private Medigap plans like Blue Cross Medex in Massachusetts cover almost all the high co-pays and deductibles not covered by Original Medicare but they do not cover anything that Original Medicare itself does not cover, particularly drugs. For drugs, you go to Part D or you get drug insurance from a former employer or union or the VA.
• Another way to supplement Original Medicare -- but not good for everyone -- is a public Part C Medicare Advantage health plan such as Tufts Medicare Preferred. Part C plans that cover almost the entire amount of the co-pays and deductibles not covered by Original Medicare -- but not the entire amount like Medigap covers -- and also usually provides some of the things missing from Original Medicare noted above -- particularly providing an annual OOP limit. But Part C plans are networked plans, usually HMOs. So, unlike Original Medicare and most private Medicare supplements, you are limited to a network of providers and must sign up for -- and see -- a primary care physician. (This is because it is an HMO, which has nothing directly to do with Medicare.) Most of these plans charge an additional premium. Some have zero premium, usually in lieu of a high annual OOP limit and/or higher copays than most Part C plans (but still much less than Original Medicare by itself).

Remember, this is just a 300-word summary of a  115-page book. Read the book to make sure you getting everything you deserve.

¹ You have to have been ADMITTED to an acute care hospital for three nights -- the rule might be changing to two nights sometime soon (but I said the same thing last year) -- in order to get the rehab/SNF covered by Medicare.

United States Seniors, Despite What Democrats Say, You Are Not Stupid

On the opening day of the 2014 Annual Enrollment Period for Parts A and D of United States Medicare, the United States left-wing press (everything you read) is full of articles telling seniors in the United States how stupid they are for choosing public Part C Medicare health plans and that they are too stupid to figure out how Part D drug plans work. These articles are all part of the Democratic Party's 12-year-plus campaign to repeal Parts C and D of Medicare despite the increasing popularity of the two Republican Party Medicare programs.

This despite the fact that those of us just retiring have been buying healthcare and other types of insurance for 45-55 years. Ignore the fools on the left who want you to have one-size-fits-all national health insurance not designed for

• your health needs (e.g., national drug coverage like the VA's does not cover many popular drugs and makes vets go through hoops to get any drugs at all) or
• where you live or
• your finances (Part C plans are used disproportionately the urban and rural poor--see image above)

I think the fact that 30% of us -- up from 5% just a few years ago -- have decided to go the route of choice over Democratic Party diktat says it all.

United States Medicare: CBO Comes Up with Medicare Part D Solution Looking for a Problem

A bunch of left wing Congressional Budget Office employees (the CBO is run by a Clintonian who appears a little less lefty than his employees) have wasted tax dollars reviewing the most popular Federal health care insurance program ever invented and found it wanting. The document appears to be another propaganda piece in the Democratic Party's 12-year-long effort to repeal Part D. The report about the Part D standalone drug program and -- peripherally -- the Part C Medicare health plan program is probably the worst example of how low-level partisan civil servants completely tied to Democratic Party ideology mislead voters and even Congresspeople.

The report supposedly reviews the Low Income Subsidy portion of the law that set up Part D. It never really identifies any burning issue facing Part D in general or LIS in particular but still comes up with some changes Congress should desparately make.

And somehow incredibly the left-wing CBO's report goes on for 40 or so pages without ever mentioning the Part D donut hole. From the beneficiary’s point of view, the report mentions LIS’ advantages as to premiums, deductibles, co-insurance and co-pays but leaves out the donut hole protection, which in my opinion is the biggest advantage – along with the ability to change plans at any time -- of LIS. The report also seems to leave out how the donut hole coverage is accounted for by the government. Perhaps CBO ignores this because so few people – relatively – reach the donut hole.

This is all significant because the donut hole is the linchpin of Democratic Party propaganda used to promote the repeal of Part D. But the donut hole does not affect people on LIS because of the way the law was passed by the Republicans against almost¹ unanimous Democratic Party opposition. Most of Part D's much maligned unfunced" cost goes to the LIS part of the program, money that was previously spent by Medicaid (so it wasn't unfunded; it just moved from my left pocket to my right pocket). So let's hide these facts under the rug is the Democratic group's approach.

Other problems with the CBO report

• There is no such thing as a Part D “LIS plan” that I can find in the literature but that is a term used throughout the report.
•  The report is full of various indictments against LIS plan sponsors but all the same insruance companies are involved; they offer plans and people on  LIS plans can choose any of the plans in their county; CBO has invented a category of insurance company that “caters to LIS beneficiaries?”
• In some sections the report counts people on both Parts C and D as being on D; people on C generally do not choose a health plan because of the specifics of its built-in drug coverage (although they might choose it because it has built-in drug coverage). Still they get the LIS subsidy if they qualify and can apply it to a Part C health plan if it includes drug coverage.
•  The CBO report mentions “step therapy” as sort of a bad practice against LIS beneficiaries. It is both a major part of almost all Part D plans and is considered a best practice from a health care perspective.
  
• The report's research timeframe predates the increased use of and popularity of the preferred pharmacy concept
  
• The report tries to claim the fact that most plans below the benchmark (average of all plans) had deductibles and most above the benchmark had no deductibles is tied to LIS; it’s just the way pricing for anything is done

 ¹I think the Democrat's opposition to the most popular Federal health plan ever was unanimous but don't feel like looking it up so I threw in the word "almost"

Men On United States Medicare: Don't Run the Risk of Becoming a Medicare Dwarf Joke

There is a great Medicare story making the rounds on Columbus Day weekend but talk about a reporter only getting half of a story. Supposedly a 450-pound, 6-foot-three "personal trainer" in Pennsylvania claimed to be a dwarf to bilk Medicare out of a half a million dollars woth of anti-dwarfism medicine. Actually that is probably not what he was being treated for¹ .

 

It looks to me like the "trainer" is the least criminally culpable person in the story. He is probably mentally ill given the openness by which he went about his scam and other information about him in the indictment. Here are the real questions to ask:

1. Is the guy really a "trainer?" Then, at 45, how is the fake dwarf on Social Security? Find the corrupt lawyer that put in a Social Security Disability (SSDI) claim for him
2. The significance of a monthly $900 Social Security amount being his only income means that not only is the fake dwarf on SSDI (and therefore Medicare after two years) but he is on what is known as Social Security Extra Help, which provides free or almost free drugs. (Extra Help is the most expensive part of the Medicare Part D drug program; accounting for over half the budget but covering only 20% of the beneficiaries.) Find the corrupt and/or inept Social Security bureaucrats that processed both the disability and Extra Help paperwork.
3. Prosecute  the corrupt doctor that wrote the prescription for "40 times the recommended dosage."
4. Name the corrupt pharmacy that filled the script. The indictment tells us it is Walgreen's mail order pharmacy
5. Name the corrupt private insurer that paid Walgreen's $500,000. The indictment tells us it's Highmark.
6. Prosecute Craig's List and the fake dwarf's customers as well
7. Given the indictment's description of the fake dwarf, it seems highly likely some real crooks are behind this scam

And while we're at it, what took the U.S. Attorney two years to bring the case to the Grand Jury? I guess the reporter just wanted to write a dwarf-joke story.

 

¹Apparently it was only the guy's family jewels that were dwarves. Testicular hypofunction is a legitimate disease and the drug prescribed a legitimate treatment. It is even possibly legitimate that a guy that big needs a very strong dose for that condition, which might let the doctor off the hook.

UPDATE: United States Medicare: New York Times' Campaign for Private Medigap Insurance Continues As So-Called "Medicare Open Enrollment" Begins

UPDATE ON OCTOBER 17: OK, now we know why the October 12 New York Times article by Robert Pear concerning a vaguely described memo, which I wrote about on October 13, was so vague and why Pear's story was probably the worst New York Times article ever written. It turns out the memo was weeks old, had nothing to do with the so-called Medicare open enrollment period that began October 15 as Pear implied, and was just kind of standard "lessons learned" memo that that complemented Part C Medicare Advantage insurance companies¹ as much as it criticized them. 

There is a strange campaign unfolding over the last few months in the New York Times in favor of private Medicare supplemental insurance as the better alternative to public Part C Medicare health plans. You would expect the opposite -- Times' bias in favor of a public option -- from such a far left wing newspaper. In fact as recently as a few months ago, the Times was editorializing in favor of Part C (although that did not last long). I wonder what happened at the Gray Lady?

The latest example is a Robert Pear October 12 story apparently rehashing findings from the usual series of audits performed by the Centers for Medicare and Medicaid Services (CMS) on its Part C and Part D administrators (who are often also Part A and Part B administrators¹). The breathless findings cited by Pear do not appear too earth-shaking. Not to mention that they cover some unspecified months or years of audting activity as well as some unspecified number of audits against some unspecified number of administrators. What ever happened to who/what/where/when/why and how? Pear writes:

• "In more than half of all audits, “beneficiaries and providers did not receive an adequate or accurate rationale for the denial” of coverage when insurers refused to provide or pay for care."
• That appears to mean that the administrator denials were legitimate but that the letter explaining why was poorly written? Otherwise you would think a major finding would be that millions of Medicare health plan beneficiary claims were being illegally denied. That's not to mention that it is highly likely that the wording of how you deny a claim is totally dictated by the CMS. And how many such dastardly letters were there compared to the total number of letters sent out?
  
• "When making decisions, insurers often failed to consider clinical information provided by doctors and failed to inform patients of their appeal rights."
• How often is "often?" How often do the administrators "consider clinical information" vs. not consider it? And would it have changed the outcome? (I totally reject the thing about appeal rights. Someone is not even opening the envelopes containing the billions pages of crap they get from Medicare administrators if they claim they have not been informed of their appeal rights.)
  
• "In 61 percent of audits, insurers “inappropriately rejected claims” for prescription drugs. Insurers enforced “unapproved quantity limits” and required patients to get permission before filling prescriptions when such “prior authorization” was not allowed."
• Again, note that that's in 61% of audits, not 61% of the relevant activity. How many audits were there? Over what period of time? And how many prescriptions were processed by the administrators audited? For example, maybe there were 30 audits in a year and the administrators involved processed 3,000,000 prescriptions, and the 18 of the 30 administrators screwed up one prescription each (or 18 prescriptions out of 3,000,000). Is that what Pear means? Otherwise, why not highlight that there were really 1800 screwups out of 3,000,000 or 18,000? In which case, we'd be talking huge numbers... like a half a percent. What incredible misleading crap!
• "Medicare plans frequently missed deadlines for making decisions about coverage of medical care, drugs and devices requested by doctors and patients."
• I am not going to even bother. Define "frequently!" Did they miss by weeks, months... or minutes?
  

 This is probably the weakest New York Times story ever written.

¹Not that the insurers give a damn. They make their pretty predictable 5% profit no matter which option -- private vs. public, Medicare or Medicaid, Obamacare vs. unsubsidized, group vs. individual -- you choose or get assigned to

United States Seniors: Can Social Security Extra Help/LIS Save You $4000 on Medicare Drugs in 2015?

There is a lot of publicity this time of year about we "poor seniors" facing the terrible prescription-drug donut hole and outrageous expenses because of blood-sucking drug companies and unscrupulous insurance companies... and on and on with the far-left-wing hogwash. The fact is that any of us seniors who are "poor" pay basically nothing or very little for our drugs. And the definition of "poor" changes from state to state so -- depending on where you live -- "poor" might mean a senior making as much as $60.000 a year, which is a lot in retirement.

One reason poor seniors pay little or nothing is a Federal program begun by President George W. Bush called Social Security Extra Help/Low Income Subsidy (LIS). Even before Extra Help/LIS, poor seniors' drugs were covered by Medicaid and other state or local programs but the help differed widely from state to state. Now to promote this great Federal program, the Social Security bureaucrats write the following in dozens of places, including in its own literature:

“Social Security Extra Help is estimated to be worth about $4,000 per year.”

The Extra Help program is great. But I have yet to find anyone in the Social Security Administration who can document the math that adds up to $4000. I can think of a couple of ways that someone 10 years ago when the program started might have come up with that number but first let me state the obvious: if you qualify for Extra Help, don't spend the savings promised by the Social Security Administration quite yet; you would have to spend more than $4000 before any Federal program of any kind could save you $4000. Very few seniors statistically speaking spend that kind of money on prescription drugs.

Of course that's no solace to the relatively few Medicare beneficiaries statistically speaking who do need a lot of prescription medicine. And none of us know if we will be in that boat some day, which is why we buy insurance. So maybe this is what the Social Security bureaucrat that we cannot identify meant when he or she said Extra Help "is esimated to be worth" $4000.

1. The national index monthly premium for Part D is around $30-$35 a month, which would mean someone on Extra Help starts by saving $400 in lower premiums in Full or Partial Extra Help because he or she gets a drug plan for free or for a small increment above the index if choosing a more expensive Part D plan. To get from $400 to $4000 a person would have to add savings in the donut hole¹ (people on Extra Help are not affected by the donut hole) and savings from lower co-pays for Full Extra Help vs. the co-pays in the “free” drug plan selected by the person on Extra Help. But that person would have to use tens or hundreds of thousands of dollars worth of very expensive drugs to get that co-pay difference. So...
2. Perhaps the person at the Social Security Administration who came up with the $4000 number just means a savings of $4000 vs. not getting any drug coverage at all? (But the same is true for all of us on Medicare in that case, Extra Help or not!)

Either way, unless I’m doing the math wrong, the $4000 number is very misleading to anyone that comes into a senior center thinking they’ll save that kind of money. And if the Social Security Adminitration means example 1, it would be based on a very chronically ill person making bad insurance decisions. But the way it is worded (“estimated to be worth”) I am guessing the person at the Social Security Administration is just calculating what Part D could save anyone, not just someone on Extra Help.

Finally another reason that the "poor" pay little or nothing for drugs depends on where you live. In addition to the savings from Extra Help, check out your state's pharmaceutical assistance program. They cover seniors with a lot higher income than Extra Help but not all states have one.

¹That number would have been much larger in 2006, when I am guessing the $4000 claim was first made, than today now that the pharmaceutical manufacturers have provided 50% discounts to the 5%-15% of people who spend into the donut hole and the Medicare Trustees are covering more and more of the difference (another 25% by 2020)

United States Medicare: What Are the Reasons to Choose a Private Medigap Supplement

On this blog this time of year, I am intermittently working my way through the how-tos and why-nots of making Medicare Part C and Part D changes for 2014. If you're interested, start with this post here from October 11 and work your way back through the links provided.

Previously I wrote about why you even would want a supplement (other than that over 90% of us get one and we can't all be  wrong). Many times -- for many reasons -- I have written about the major questions to ask in deciding if a public Part C Medicare health plan is best for you. Those two questions are -- to oversimplify -- 

1. Does your doctor take Part C?
2. Do you stay here in one geographic area all year (except for a couple of weeks vacation; in other words, are you a snowbird?)?

There will be a lot more details between now and December 7 but if the answer to either of those two questions is "No," you probably want to go the private Medigap supplement route (lefthand side of the decision tree -- image above -- on page 17 of the "Medicare and You, 2015" booklet)

But naturally there's a little more to it. This is the government after all, which is not noted for simplicity.

• From the insurance company's point of view, the difference between the two sides of the decision tree is the difference between fee for service insurance vs. capitated-fee insurance. In English, that means the government contracted insurance company¹ that is administering your Medicare policy, depending on the side of the tree you choose, is either going to get paid a lump sum for the year to pay your providers (who also may or may not get a lump sum) or a fee every time you go to see the provider.
• But from your point of view the major difference is whether you want to be part of -- and somewhat limited by -- a coordinated network of providers (public Part C) or whether you want to be able to choose any provider you want at any time (private Medigap insurance). That's why a private Medigap plan is probably going to be your choice if you spend a lot of time somewhere other than at your legal residence.

In making that the decision, you need to look at actual costs and likely costs. Public Part C Medicare health plans are usually less expensive (the trade off for staying within the network) than private Medigap plans. But Part C plans do have co-pays every time you go to the doctors or into a hospital or surgical center. You have to figure out if you think -- in your case -- whether the co-pays are going to add up to more than you would have paid in higher Medigap premiums.  

On the other hand -- like Original Medicare Parts A and B -- Medigap does not cover a lot of healthcare services at all so you need to include in your cost analysis some of the extras that might be in your Part C plan like one or two teeth cleanings a year, or an annual physical or the usually built in drug plan (with a private Medigap plan you will most likely also want to get a Part D Medicare standalone prescription drug plan).

That's the final little extra gotcha in deciding between a private Medigap supplement or a public Part C supplement: make sure the Part C you are interested in covers your drugs and at a reasonable co-pay.  Even though you won't be making the decision in favor of Part C based on its drug coverage.

¹In many cases the same insurance company administers both Original Medicare and public Part C health plans (and also sells private Medigap plans, Obamacare, and car insurance)

United States Seniors: Far-Left-Wing Articles about Medicare Part B Are Pure Obama Propaganda

OK, the good news is that Part B premiums are unchanged again this year. The bad news is that the far left journalists all around the United States are politicizing something that is likely totally tied to demographics but possibly tied to the good work of George W. Bush over a decade ago, and claiming the credit for the Obama administration and Patient Protection and Affordable Care Act (PPACA) of 2010 as amended. This October 10 story in the Globe is one example but I've seen dozens like it (in fact, they are all based initially on a feed from the far-left-wing Associated Press).

The three worst progaganda points floating in the ether claim

• “Medicare… costs-per-beneficiary have barely risen the past four years. That is because of spending cuts by President Obama and Congress, as well as low inflation in health care.”
• Actually not even the Medicare actuaries can figure out the cause. The most likely causes are not mentioned in the article. It is probably a result of the relatively better health of the baby boomers entering the Medicare program (simply because we are younger, not because we are actually healthier than our parents) and possibly a result of the reforms passed in 2003 by President Bush that went into effect in 2006. It is almost certainly not PPACA because its cuts to Medicare have not really started yet and the downward trend in health costs has been going on for 8 years.
• “Medicare’s hospital deductible will rise... But many people carry additional insurance to cover such costs.”
• Saying "many people carry additional insurance" is totally misleading. They want you to think that it is a small fraction of the people on Original LBJ/Democratic-Party/”as we know it” Medicare. In fact, well over 90% of the people on Medicare make additional supplemental arrangements because Original LBJ/Democratic-Party/”as we know it” Medicare is the worst insurance ever devised. Ask yourself how bad must a government program be that over 90% of the people for whom it is designed have to make other arrangements?
• “For the approximately 50,000,000 residents in Medicare Part B… (or plug in your state's name and some much smaller number) premiums and deductibles will remain unchanged in 2015 at $104.90 and $147 respectively.”
• In other words, just about everyone in Medicare. I cannot imagine the purpose of publishing this precise but immediately outdated number, but it is wrong; all of us are not paying $104.90.

• About 15% of the people on Medicare Part B pay nothing or a greatly reduced amount for their Part B
• Because of PPACA -- about 10% of the people on Medicare pay 50% to 200% more than the rest of us pay for their Part B insurance in order to partially fund healthcare insurance for people not of Medicare age.
• And about 5% of the people on Medicare have paid a lot more than the rest of us pay since around 2007. That extra money from the top 5% since 2007 is how the Bush administration and the 2003 Congress funded Part D, you know the Medicare drug program that the Democrats always claim was/is “unfunded” and that the Democrats have tried to repeal for the last 12 years.

United States Seniors: Whatever You Decide, Don't Have Medicare Part C or Part D Premiums Taken Out of Your Social Security

On this blog, I am working my way through the how-tos and why-nots of making Medicare Part C and Part D changes for 2015. My first posts on this how-to and why-not are here, here, here, here and here.

But there's one "what-not-to-do" that cannot wait even though it comes as one of the last steps in the Medicare Part D vs. Part C decision-making process... after you've picked with way you are going to go (managed vs. unmanaged care), and compared the various plans in your area, and are about to enroll (see image above). That warning is:

"Do Not Choose Direct Withdrawal from Social Security to Pay for Either Your Part C or Part D Plan."

If you have already done this, call your insurer as soon as you get their "Thanks for Enrolling" package and change the option. And if the package is delayed, call your insurance company anyways... no later than around Thanksgiving.

You do not want Social Security direct withdrawal in 2015 because odds are you will change your plan next year... because it is almost always worth changing your plan financially. And the problem with direct withdrawal is that even though you change your plan, the Social Security Administration keeps taking money from your SS "check" and giving it to your old insurance company for a few months after you changed your plan. 

You'll eventually get the double payment back but why loan money to the government. Tell the Part D or Part C insurer -- whichever way you decide to go -- to mail you or email you a bill.

United States Seniors: Making The Big Decision When It Comes To United States Medicare No Different Than the Decision You've Made for 40 Years

As mentioned in earlier posts, the time period October 15, 2014 to December 7, 2014 is just the annual Part C/Part D enrollment period ... not a Medicare enrollment period (unless you are shortly turning 65 or just turned 65). But it's worth a refresher course on what you can do or have already done -- and why -- before thinking about Part C and/or Part D.

So, first, it is important to remember why you bought supplemental Medicare insurance in the first place and then, second, look at the  first major decision you faced on the Medicare decision tree (see image above and on page 17 of the "Medicare and You, 2015" booklet). Whether you realize it or not, if you don't have group retiree insurance, you selected between: 

• A private Medigap supplement (left hand side of the tree) or 
• Public Part C Medicare Advantage health plan (right hand side of the tree)

If you are on Medicare and under 70 (probably even if you are under 75) this choice is the same one that you faced every year at work. The major differences from your point of view are:

• Private Medigap supplemental plans are accepted by any provider that accepts Medicare (which is almost all), anywhere in the country (but not usually outside the United States -- even in an emergency -- unless the Medigap policy specifically says so)
• Public Part C Medicare Advantage plans are typically accepted only by providers in a network in your region (but sometimes you can use it anywhere in the region and pay a much higher co-pay and -- as with Medigap -- you are always protected everywhere in the United States in case of an emergency)

In other words, remembering back to open enrollment when you worked, it's like the old Aetna (or Cigna or Blue Cross or Prudential or...) vs the local HMO choice. It's like that but not exactly the same so the key questions to ask are:

• If you have a favorite doctor or hospital, does it accept any Medicare Part C health plans? If not, that makes the decision for you.
• If you spend a lot of time away from your primary residence each year (often called a snowbird), do you need to be able to go to the doctor at the other place on a regular basis (remember: emergencies are covered either way)?

Of course, this is the government. There are some other little nits to look at. For example, another thing you need to know is that all the propaganda in the United States about private vs. public healthcare insurance is pure politics.  Fuggettah abouddit! All Parts of Medicare -- including private Medigap plans -- are highly regulated by the government¹. All Parts of Medicare are administered by private insurance companies. Private vs. public? It don't matter!

¹In the case of private Medigap plans, they are regulated by both the Federal and state government.

Seniors on United States Medicare: Add Mark Miller to Your "Do Not Read" List

A so-called financial advisor named Mark Miller that writes for the far-left-wing Reuters news wire of France (already on my Do Not Read list overall) puts out a lot of bad information about Medicare because of his or her political bias. For example, in a recent article (no link provided purposely), he or she includes this wording concerning the Part D donut hole:

 

"Next year the gap starts at $2,960 (up from $2,850 this year) and ends after you’ve spent $4,700 (up from $4,550 this year)."

 

The lower number is total retail cost of the drugs involved whereas the higher number is your total out of pocket spending minus the discount given by the pharmaceutical manufacturer while in the donut hole. Worst case, a person might spend about $3000 out of pocket before getting out of the donut hole, not the less than $2000 implied in this article. After exiting the hole, the beneficiary still pays 5% of the retail cost of the drug or drugs. Unfortunately that would also mean the person has a serious medical issue.

 

The good news is that less than 10% of the people on Medicare get into the donut hole and less than 1% spend all the way through it.

 

The even better news is that no one on Social Security Extra Help is affected by the donut hole at all so the donut hole is basically a middle and upper class issue. Most of the people affected have tertiary coverage through a former employer or union, buy a Part D plan that provides gap coverage, or get help from a state pharmaceutical assistance program (but not all states have one). The donut hole blah blah blah is pure Obama administration propaganda.

The New York Times Medicare Poster Girl: Why Is Retired Teacher Elizabeth Cooper Even Worried About Medicare Supplemental Insurance, Medigap or Part C?

Who's Elizabeth Cooper you ask? Elizabeth Cooper, according to the New York Times, is a 68-year-old former elementary schoolteacher, who -- as you also should -- weighs her Medicare supplement options each year.

According to the October 4, 2015 New York Times article in favor of private Medigap insurance in place of public Part C Medicare Advantage health plans, Cooper has "already" (in the three years on Medicare I guess the Times' author means) tried a couple of plans¹, including one Medicare Advantage plan, which

"lured her in because it had no monthly premium. But the plan required her to shoulder a significant share of her medical costs."

According to the Times, she is healthy now, but she has a history of skin cancer. In general Cooper's health condition should be between her and her doctor but since she consented to publish her health status in the United States "newspaper of record," I feel OK speculating on what Cooper means when she says

“I didn’t feel that would give me a sense of ease because of the co-pays and the possible unexpected expenses that can crop up."

So here's some total speculation to open up some discussion points:

1. It must suck to be a retired teacher in Alabama, Cooper's residence according to the Times, because no retired teacher (or other government employee) in the Northeast United States would have any dependence on any part of  crappy LBJ/Democratic-Party Medicare insurance; Alabama teachers better get a union. For the most part, Medicare is something government employees and politicians impose on the rest of us, not something they themselves use in retirement.
   
2. The New York Times says Cooper "backed out of "Medicare Advantage" during the trial period..." There are two trial periods. You can drop out after first signing up and you can drop out the first six weeks of every calendar year. But depending on your timing, dropping out of Medicare Advantage could cause a problem if switching to Medigap. Given her skin-cancer history, and apparent Alabama laws concerning private Medigap insurance, Cooper could have been denied a policy because of her pre-existing condition or charged more². But this would not have been the case if she dropped out right after first signing up so apparently that is what she did. That may or may not have been a good move given her condition but it would mean she never really gave her Part C Medicare health plan a chance.
   
3. The Times says Cooper "enrolled in original Medicare..." instead of Medicare Advantage. This is a total inaccuracy by the New York Times. Ms. Cooper could not have been on Medicare Advantage had she not already been enrolled in Original Medicare, both Parts A and B.
4. Cooper bought a private Medigap supplemental policy for about $135 a month that covers items like deductibles and her share of each bill. The Times says, quoting Ms. Cooper, "After having a few diagnostic tests this year, (my) decision already paid off. Had I been on the Advantage plan, I would have had to come up with the money for each test." So it also must suck to get skin cancer diagnostic tests in Alabama (because it's hot?) It's hard to believe a few diagnostic tests would have cost more than the $2000 Cooper spent on private Medigap insurance and a standalone prescription drug plan after she dropped her zero premium Part C plan. Maybe $500 would be the most: two outpatient procedures, each with a $250 co-pay on the zero-premium plan. But more likely two doctor visits at $50 each.
   
5. Does Cooper "lure" easily?

To be clear, if Ms. Cooper wants the budget dependability of Medigap (and is willing to pay for things like annual physicals out of pocket that are not covered by Medigap) or wants a preferred dermatoligist or preferred skin-cancer lab that did not accept the Part C plan she had inititally chosen or simply did not like managed care, these are all good reasons to pay more for private Medigap insurance. But please do not pretend her decision was based on finances. It is almost impossible for a zero-premium Part C Medicare health plan to cost more than the combinantion of private Medigap and Part D insurance and out of pocket costs under any health-need scenario I can think of... presuming you stay in the zero-premium-plan network... which is the point of managed care (the linchpin of Obamacare, by the way).

¹It would have been useful to know what else she tried: No supplement? Lousy retiree insurance? Another Alabama Medigap plan? Did she keep working past Medicare age? There are three years involved but only two are accounted for?

²Alabama Medigap policies and private Medigap policies in other states are also age rated, which is not allowed under the public Part C Medicare health plan program. You might not have known this just reading the New York Times endorsement of private Medigap insurance