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The average Part D Medicare Prescription Drug Plan jumped to $30.36/month for 2009.  That is an increase of over 30% just in premium price in one year.  Many insurance companies indicated losses on their Part D prescription drug plans in 2008 and this is one part of Medicare you will want to hone in on.  In Mesa County, Colorado we had a decrease in drug plan offerings for 2009 from 55 different prescription drug plans down to 48.

However, premiums are just one part of the equation.  You also need to evaluate co-pays amongst the different levels of drugs such as generics, preferred brand names, and non-preferred brand names.  Also, you will want to make sure your prescription drugs are still within the formulary of the plan and in what drug tier. 

There are still some drug plans in 2009 without a prescription drug deductible such as the Wellcare Signature and the AdvantraRx Value.  Some drug plans are even still offering generic drug co-pays at a $0 co-pay such as the Wellcare Classic.  And look to the Advantra Rx Premier, Prescriba RX Platinum, and Blue Medicare RX Premier for generic drug coverage in the coverage gap. 

The only way to ensure you are in the most cost efficient Medicare prescription drug plan is to run your personalized list of prescriptions through medicare.gov.  It will rank your unique list of prescriptions amongst different plans in order of most cost efficient to least cost efficient.

CMS announced today that there will be no increase in the standard Medicare Part B monthly premium for 2009 leaving it at $96.40.  However, the Part A deductible will increase 4.3% from $1,024 in 2008 to $1,068 in 2009.  CMS has not kept Part B rates unchanged since the year 2000.  The Part B deductible will also hold steady at $135 for 2009.

 Medicare Part A covers inpatient hosipitalization, skilled nursing, and certain home health care services while Medicare Part B covers part of the cost for physician services, durable medical equipment, certain administered drugs, outpatient hospital and certain home health services.  About 95 percent of of the nearly 44 million medicare beneficiaries pay the standard Part B premium.  The other 5 percent are subject to a higher premium which is based on their taxable income (see below).

 Although this is great news for Medicare beneficiaries for 2009, 2010 will likely have to reflect higher costs in Part B as the premiums ususally reflect the higher costs of medical services.  Traditionally, medical cost inflation has risen faster than overall inflation.  With the baby boomers readily entering Medicare at a rapid and increasing rate demand for medical services is likely to increase.  With Medicare expecting to cost $500 billion in 2009, Congress will likely be keeping a watchful eye on expenditures.

Insurance companies have filed their modifications and benefits with Centers for Medicare Services for the year 2009 for Medicare Part D Prescription Drug Plans, Medicare Advantage Plans, and Medicare Choice Plans.  Around October 15^th, this information will be released and can be viewed on medicare.gov and of course Medicare Annual Election begins November 15^th and runs to December 31^st.  With this in mind, Medicare beneficiaries need to begin thinking about how this may affect them and to reflect upon coverage in 2008.  Here are just a couple of points to consider:

1)      Medical Inflation – with medical inflation varying amongst areas and segments between 5-10% a year, you can bet you will see higher costs.  Many Medicare beneficiaries only look at the price of the plan to determine if their plan is cost efficient.  However, plans have several ways of increasing costs such as increasing co-pays (such as doctor office co-pays going from $15 to $20), increasing coinsurance for certain benefits, excluding certain procedures, limiting your network to certain areas, or even increasing your maximum out of pocket costs.  All these factors should be evaluated in determining if you plan is still the most cost effective for you.

2)      Part D Medicare Prescription Drug Plans – with several insurance companies indicating losses on their Part D prescription drug plans, this is one part of Medicare you will want to hone in on. Rumblings have been heard that we will see significant increases in the Part D this year – not only in premium but in co-pays amongst the different levels of drugs such as generics, preferred brand name, and non-preferred brand name.  Also, you will want to make sure your prescription drugs are still within the formulary of the plan.  The only way to ensure you are in the most cost efficient Medicare prescription drug plan is to run your personalized list of prescriptions through medicare.gov.  It will rank your unique list of prescriptions amongst different plans in order of most cost efficient to least cost efficient.

3)      Run all scenarios – many Medicare Beneficiaries don’t look at their options separately.  Yes, you can have a separate Part D Prescription Drug Plan with one insurance company with a Medicare Advantage Plan or Medicare Choice Plan with a different one.  Yes, you may look at a Medicare Supplement versus a Medicare Advantage Plan and you should evaluate this annually.  Rarely, do you see one insurance company solve everyone’s medical and prescription drug needs every single year.

4)      Physician Acceptance – let’s face it, Mesa County is far different than our Delta sister county to the south.  Many of their clinics are considered rural based and therefore get higher subsidization and therefore have to accept all insurance carriers.  Not so in Mesa County - here we are home to a Medicare Choice Contract with Rocky Mountain HMO that will be up for Federal review in 2010.  This competes against Medicare Advantage Plans as they pay doctors a higher reimbursement above the Medicare Assignment Rate whereas Medicare Advantage Plans pay the physicians 100% of the Medicare assignment rate.  Even though they are both federally subsidized programs, the different reimbursement rates cause insurance discrimination amongst these two programs.  Last year this was particularly the case with Primary Care Partners and Dr. Vincient, as they restricted their Medicare beneficiary patients to just RMHMO or original Medicare with a Medicare supplement.  It will be advisable again to make sure your physician will bill and/or accept your plan of insurance.

These are just a few of many suggestions to consider when you are evaluating Medicare options.  As 2009 information is released - utilize medicare.gov, contact your local SHIP office, or work with an insurance agency that represents multiple insurance companies to evaluate all your options.

Deciding where to retire and then moving into an area is often a daunting task. Especially as we get older change is often hard on us… several decisions have to be thoughtfully considered. Such as, do we move next to our children or grandchildren? In addition, if we do, which family pack to we choose to move near? Alternatively, do we move to a place with a friendly climate than the current climate we live in? What is the medical community like? Will they accept our insurance? How health insurance friendly is the medical community? Unfortunately, during this time in our lives, we simply cannot put a blindfold over our eyes turn around three times and put a pen on the map and say, “this is where we are going to retire”. Our carefree days of choice an happenstance are far better left to memories. We are at a point on our lives where our decisions need to be based more in fact than simple armchair analogies. Economists often use supply and demand curves as a tool to make decisions about the market place. More importantly, how a change in price will change the demand or supply for a good. We often recommend this analogy to our clients to help them make a decision about their health insurance. Ultimately this is used as a tool, to help them decide if the place they chose to retire or the current place they are living in is a safe place for them to live and retire in regards to their healthcare needs. In other words, we ask them to do an opportunity cost analysis in regards to their health insurance and medical needs, which is one of the most important decisions we will make for ourselves as we age. We briefly explain to our clients that when making a decision on where to retire you must also consider how health insurance friendly the medical community is in the community you choose to retire in. If the medical community is not very health insurance friendly, your retirement might not be as comfortable as to a community with a more health insurance friendly environment. We recommend looking for a community that widely accepts all health insurance – one that does not discriminate. The meat and potatoes of our philosophy is to be a smart and savvy shopper… shop for a community that has a medical community with a somewhat elastic demand and supply curve, in other words find medical providers and suppliers who will bill all health insurance. Watch out for a community that has an inelastic demand, a medical community that supports one insurance provider but does not support other health insurance choices that might actually be better for the medical consumer. The lack of insurance choices can raise the price of a good without much loss in demand for the product because there are no other options. The price and product become inefficient and the consumer suffers… better known as a monopoly or even in some cases an oligopoly. More importantly, a good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied. Usually these kinds of products are readily available in the market and a person may not necessarily need them in his or her daily life. On the other hand, an inelastic good or service is one in which changes in price witness only modest changes in the quantity demanded or supplied, if any at all. These goods tend to be things that are more of a necessity to the consumer in his or her daily life such as health insurance. However, when there are more choices in regards to health insurance the consumer has more control of the price and that is very important to retirees. There are a couple ways to find out if your community is health insurance friendly. You can call the State Insurance Commissioner’s Office. You can do research on Medicare.gov or contact your local SHIP office.

Many medicare beneficiaries have asked how the new Medicare Improvements for Patients and Providers Act of 2008 would affect our local Rocky Mountain HMO cost contract in Mesa County.  Below you will find Section 167 of the Act.  In this Act, bascially Rocky Mountain HMO would have to have convincing evidence and reasons why they are unable to become Medicare Advantage Plans to continue this cost contract.  As of the 2008, there are currently 32 different Medicare Advantage Plans available in Mesa County with likely more options in 2009.  In our opinion it would be very diffcult to defend a cost contract to be continued in this area.

SEC. 167. ACCESS TO MEDICARE REASONABLE COST CONTRACT PLANS.

(a) Extension of Reasonable Cost Contracts- Section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(ii)), as amended by section 109 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is amended by striking `January 1, 2009′ and inserting `January 1, 2010′ in the matter preceding subclause (I).

(b) Requirement for at Least Two Medicare Advantage Organizations To Be Offering a Plan in an Area for the Prohibition To Be Applicable- Subclauses (I) and (II) of section 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(ii)) are each amended by inserting `, provided that all such plans are not offered by the same Medicare Advantage organization’ after `clause (iii)’.

(c) Revision of Requirements for a Plan That Are Used To Determine if Prohibition Is Applicable-

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  (1) IN GENERAL- Section 1876(h)(5)(C)(iii)(I) of the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is amended by inserting `that are not in another Metropolitan Statistical Area with a population of more than 250,000′ after `such Metropolitan Statistical Area’.

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  (2) CLARIFICATION- Section 1876(h)(5)(C)(iii)(I) of the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is amended by adding at the end the following new sentence: `If the service area includes a portion in more than 1 Metropolitan Statistical Area with a population of more than 250,000, the minimum enrollment determination under the preceding sentence shall be made with respect to each such Metropolitan Statistical Area (and such applicable contiguous counties to such Metropolitan Statistical Area).’.

(d) GAO Study and Report-

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  (1) STUDY- The Comptroller General of the United States shall conduct a study of the reasons (if any) why reasonable cost contracts under section 1876(h) of the Social Security Act (42 U.S.C. 1395mm(h)) are unable to become Medicare Advantage plans under part C of title XVIII of such Act.

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  (2) REPORT- Not later than December 31, 2009, the Comptroller General of the United States shall submit to Congress a report containing the results of the study conducted under paragraph (1), together with recommendations for such legislation and administrative action as the Comptroller General determines appropriate.

The new Medicare law, highlighed by the democrats, reversed scheuduled payment cuts to physicians, however, what is being quietly overshadowed are the cuts in payments to the Medicare Advantage Plans and how this will affect them and the seniors enrolled in them.  2.3 million medicare beneficiaries are enrolled in Medicare PFFS plans up from 209,000 since  2005.  Since many of the 2009 plan benefits have been filed with CMS for 2009, Medicare beneficiaries will likely see the effect of these changes beginning in 2010 coverage. 

Insurance companies have not fully evaluated how this will affect the benefits they offer but it can be assured we will likely see costs of these plans increase, copays or coinsurance increase, or additional benefits such as vision care phased out.  In addition, most PFFS plans effective in 2011 will be required to set up provider networks.  That has been a very important attribute to PFFS as seniors had freedom of choice to use any provider that was willing to bill the insurance company for the service provided.   

 What is ironic is how the democrats have praised this change as a “great day for Medicare and a great day for seniors.”  However, seniors utilizing these PFFS plans tend to be fixed income Medicare beneficiaries that would otherwise have just traditional medicare.  Fixed income seniors often view traditional Medicare supplements or Medigap plans to expensive or unaffordable despite the more comprehensive coverage - and there in lies the problem.  These cuts to Medicare Advantage Plans mean that the population of seniors that will be affected the most are the ones slightly above the poverty line surviving on fixed income often times only social security.

 Many seniors in this segment of Medicare beneficiaries have not realized what Medicare laws have been passed nor do they know how this may bring about changes in the coverage they now have.  Rest assured a sleepy giant may awake once the changes do come about and answers from their Senators and Representatives will be needed.

Home Health Care is vital to any area.  In the Grand Junction, CO area there are online comparisons available for facility performance in terms of:

• Percentage of patients who get better under the care
• Percentage of people who needed additional, unplanned care
• Percentage of people who get better at taking their meds correctly
• Percentage of people who stay at home after an episode of home health care ends.

Medicare.gov or HHS.gov are excellent websites for those who want to go online and see the comparisons themselves, but for our purposes for western Colorado residents we looked at the following facilities based on region:

Alpine Home Health Care in Clifton, CO –

• Scored typically lower than the state and national averages for patients who get better under care
• Scored typically lower than the state and national averages for patients who needed additional, unplanned care
• Scored a bit lower than the state average and 10% lower than national average for patients who get better at taking their meds
• Scored the same as the state average and higher than the national average for patients who stay at home after an episode of home health care ends

Community Hospital Home Health Services in Grand Junction, CO -

• Scored typically higher than the state and national averages for patients who get better under care
• Scored typically much higher than the state and the same as the national averages for patients who needed additional, unplanned care
• Scored higher than the state and national averages for patients who get better at taking their meds
• Scored much higher than the state and national averages for patients who stay at home after an episode of home health care ends

Hilltop Community Resources in Grand Junction, CO -

• Scored typically lower than the state and national averages for patients who get better under care.
• Scored a little higher than the state and national averages for patients who needed additional, unplanned care
• Scored considerably lower than the state and national averages for patients who get better at taking their meds
• Scored higher than the state and national averages for patients who stay at home after an episode of home health care ends

Homecare of the Grand Valley in Grand Junction, CO –

• Scored typically higher than the state and national averages for patients who get better under care
• Scored typically lower than the state and national averages for patients who needed additional, unplanned care
• Scored higher than the state and national averages for patients who get better at taking their meds
• Scored higher than the state and national averages for patients who stay at home after an episode of home health care ends

See :  about-the-nursing-home.doc for comparisons on long-term assisted living homes in Mesa County area.  You can view inspection information, quality, staffing and more at this link Nursing Homes.

Prescription Tidbits – for the insured

If you have prescription coverage in your health plan, you’ve probably noticed the difference between Brand Name coverage and Generics – especially in out-of-pocket costs.  But, did you know why that is?  Most drug companies are allowed to carry patents on their new drug releases for 17 years.  They must wait for the patents to run out before the drug can go out to market in a generic form.  Typically the savings discount for generic drugs compared to their Brand Name counterparts is about 65-70%.  According to the Congressional Budget Office, generic drugs save consumers an estimated $8-10 Billion a year at retail pharmacies.  Even more Billions are saved when hospitals use generics. 

 Worried about the differences in effectiveness between taking a Brand Name drug and a generic drug?  Prescription drugs are regulated by the FDA.  They require that all generic drugs have the same high quality, strength, purity and stability as brand-name drugs.  Although, it is believed that current regulations permit a variation of approximately 20% either way in the bioavailability of the active ingredient in generic drugs.  Bioavailability is used to describe the fraction of an administered dose of unchanged drug that reaches the systemic circulation (oxygenated blood flow from the heart to the body) – or, in other words, absorption into the bloodstream.  However, the general consensus is still that if there is a viable generic alternative to the Brand Name then that is the way to go. A little history on how and why Brand Name drugs “go generic.”  Drug Patents are protected for 17 years in order to protect the original developer.  Creating drugs costs a lot of money.  So, drug companies have exclusivity in a way to sell the drug at the price they want to.  When the patent expires and the FDA approves the generic version any other drug companies can start selling the generic version.   

August 6, 2008

UNINSURED vs. UNDERINSURED

Colorado Public Radio host Ryan Warner held an interview with Dr. Kent Voorhees, Vice President of Education of Family Medicine for the University of Colorado’s School of Medicine, on a Focus Group study he did on the underinsured (for healthcare) in Colorado.  For the purposes of the study he defines “underinsured” as those who spend 10% or more of their income on healthcare OR those who are at 250% of the poverty line and spend 20% or more of their income on healthcare.

 Dr. Voorhees stated that they went to 37 different doctors offices to get their statistics and the patients they used included a combination of people who are uninsured, have health insurance, have Medicare and/or have Medicaid.  Approximately 36% of the group were underinsured - they have health insurance, but often skip treatments, recommended care and prescriptions because they cannot afford to pay for them due to high deductibles, copays, etc.  50% of these underinsured feel that their health suffers because of this.   Of the Uninsured who skip treatments and prescriptions, 48% felt their health suffers. 

Another point brought up by the underinsured is that there are often exclusions or limitations in their health coverage that prevent them from getting covered for certain treatments that ARE AVAILABLE TO THE UNINSURED.

 This study did not even include people who never go to the doctor at all for treatments.

1/3 of the total group said they often skip recommended treatments and prescriptions due to cost.

In response to emails Insurance Advisors Agency, Inc. sent Congressman Ken Salazar, he had this to say:

“Thank you for contacting me regarding H.R. 6331, the Medicare Improvements for Patients and Providers Act of 2008. I appreciate your comments on this important issue.

On July 15th, the Senate and the House of Representatives both voted to override the President’s veto of H.R. 6331. The Senate voted 70-26 in favor of overriding the veto, and I am very pleased that my colleagues and I came together in a bipartisan fashion to ensure that H.R. 6331 would become law.

As you know, due to an outdated Medicare formula that must be permanently corrected, Medicare reimbursement rates for doctors were scheduled to drop over ten percent on July 1st. As a result, over half a million Colorado seniors on Medicare were at risk of finding that their doctors could no longer afford to treat them. The cut would also affect tens of thousands of the service members and their families stationed in Colorado at places like Fort Carson and Buckley Air Force Base who are serving our country and rely on Tricare for their health needs.

To the relief of Medicare and Tricare patients and providers across our state and country, H.R. 6331 replaced the drastic 10.6 percent Medicare reimbursement rate cut for physicians with a modest increase. In addition to this reimbursement rate fix, H.R. 6331 also included important Medicare improvements, such as an extension of the therapy cap exception, a plan to reduce mental health co-payments from 50 percent to 20 percent, and coverage of both cardiac and pulmonary rehabilitation and more preventative care.

H.R. 6331 also included a number of measures that will help health care providers across our state, including rural hospitals, independent pharmacies, community health centers, and others. Many constituents shared with me how important these measures are to their lives, and I am proud that my colleagues on the Senate Finance Committee and I were able to successfully work towards the passage of this bipartisan bill.

I supported the need to enact changes early on and you can be assured that I will continue to work to strengthen the Medicare program, and address the broader reforms to our health care system that are so desperately needed.

For more information about my priorities as a U.S. Senator and about issues of importance to Colorado and our nation, I invite you to visit my website at http://salazar.senate.gov/.”