As a result of the ACA, the overall number of Medicare Advantage plans is down. The open eligibility period of 1/1-3/31 is no longer valid, as well. Seniors navigating the open enrollment period for plans (including part D) and coverage will have an easier time of making choices, but because of reform, will those choices of plans be sufficient ones?
According to CMS, the 13 percent drop in all MA plans nationwide reflects the economic waste associated with duplicative plans and fraudulent FFS plans that also contributed to the spike in Medicare costs. Approximately 25 percent of all beneficiaries have MA plans. Open enrollment ends 12/31.
Here’s probably one provision of the reform law that Republicans would like to fight — Medicare Advantage streamlining payments to providers to approach levels in line with Medicare, as opposed to competing with other market MA plans. Over the next couple of years, the gradual phase out of the most egregiously outlying plans (in terms of levels of reimbursements) will affect beneficiaries to varying degrees in different geographical locales. Regional inequities are one reason for the waste in Medicare reimbursements in driving up the cost of healthcare. In the Pacific Northwest, many seniors are being hit especially hard, having to search for supplementals in a previously MA-replete healthcare marketplace.
According to the state Insurance Commissioner’s Office, UnitedHealth Group cancellations affected the largest number of seniors — nearly 16,000 Washington residents. In a statement, the company said it examines many factors each year, including local-provider networks, reimbursement rates, regulatory changes from the federal government and “other local market dynamics” to decide whether to continue plans in particular areas.
In other Medicare news, Part D plans will begin to close the “donut hole” — the gap in coverage in Part D plans which shifted the responsibility of the beneficiary to pay for prescription drugs up to a ceiling, at which Part D coverage would begin again. Look for coverage gaps to close at the higher levels of out-of-pocket costs for the healthcare consumer/beneficiary.
The enhanced federal scrutiny, subsequent disruption, and outright cancellations of many poorly run Medicare Advantage (from the Bush era) plans as a result of healthcare reform is prime circumstance for third party-pharmacy benefits programs. One such program is moving quickly into the so-called beneficiary self-care space by offering built-in pre-paid savings for members’ over-the-counter drug benefits. The product is in the form of a benefits card, and according to the company’s president, is a sound solution to the increase in preventable ambulatory visits that drive up costs.
This lack of OTC benefit access costs Medicare billions of dollars in unnecessary doctor and hospital visits, resulting from patients seeking care for less serious ailments treatable with OTC medications or for ailments that go untreated and later require urgent care. Increasing member overall health and self-care through OTC items dramatically reduces healthcare costs, and increases member satisfaction and re-enrollment rates.
It’s a program that sounds good in theory, but time will tell if these programs actually increase utilization of MA plans for the end purpose of increasing quality healthcare delivery at a savings…or if they represent just another carrot-on-a-stick loss leader for simply increasing MA enrollment in fewer health plans available under Obama’s reform. | LINK
At the Kaiser Foundation site, there’s a pretty decent analysis [PDF] of the projected availability and costs to consumers who wish to take part in standalone prescription drug plans next year in the wake of reform. Since the Medicare D provision kicked in officially almost 5 years ago, healthcare consumers have had greater choice in pharma coverage, but navigation of those plans was extremely byzantine and seemed to benefit third parties more than the beneficiary.
Starting in January ’11, patients will have their choice among 33 such plans — the lowest offering within Part D since its inception. This is mostly the result of government depletion of waste in Medicare in anticipation of the reform law. The efficiencies in the offering will be met with premium increases, however, for those patients in 2010 existing Part D plans. For those beneficiaries using subsidies to guarantee Part D coverage, they will have to know where to look to avoid premium payments.
On Monday, Medicare (and Medicaid) turn 45. And to celebrate, the government will be touting its annual open enrollment. Well, okay, the feds will also be throwing in a plug for government’s role in health reform and what benefits are in store for those who were spring chickens when Medicare became law. Who better to message than the avuncular Andy Griffith?
Clearly targeted at those seniors who still think “death panels” are an essential creation of the Obama plan for reform, the ad — which begins airing in some markets today — will mostly focus on the benefits for seniors inherent in standalone or the program’s supplemental plans under reform. There will be no mention, however, of the major way the new reform law will maintain Medicare solvency well into the next couple of decades: trimming the fat from Medicare Advantage payouts from plans which originally saw benefit under the George W. Bush administration’s 2003 Medicare Modernization Act. | LINK
Beginning this week seniors should have already started receiving checks from the federal government for the purpose of closing the so-called donut hole — a provision of the MMA of 2003 that left many Medicare Part D beneficiaries out in the cold when trying to pay for their prescription drug coverage. People who fall into this gap are responsible for $3,610 in drug costs in 2010 before their Medicare coverage kicks in again. The “hole” is gradually being phased out over the next 10 years.[1] Over 4 million people will receive $250 checks this year.
Sounds innocuous enough. But one state is asking the government to reclaim those funds. Vermont, which has some 2800 low-income seniors scheduled to receive the Part D refund checks, is asking beneficiaries to return the money. Since the state of Vermont is funding drug costs for its beneficiaries via public-funded insurance programs (OVHA), it is asking seniors to return the checks — as the state is on tap to receive almost $600,000 in rebates due to the action.
While the goal of the feds is to eliminate this troublesome provision as part of Obama’s healthcare reform package, this episode does highlight the difficulty some states have with federal mandates to cover certain costs associated with the delivery of healthcare when they essentially don’t agree with those mandates. By the way, if seniors decide not to refund the government’s money, says Vermont, they will be subject to a $250 deductible in their state-subsidized insurance plan for drug costs. | LINK
It’s that time again: open enrollment for Medicare Part D. Ordinarily, items such as this don’t really generate newsworthiness. However, these aren’t ordinary times; given the state of the (healthcare) economy, anytime one connects the dots between the country’s largest care guarantor and the potential for greater coverage pools — it’s time for intense wonkishness to rear its ugly head yet again.
The big question is whether or not Part D makes sense for the consumer. New this enrollment period: (1) premiums will rise another 10% percent;[1] (2) the vast majority of standalone prescription drug plans (60% or so) will require a deductible in ’10, maxing out at just over $300; (3) finally, with respect to so-called “benchmark” plans,[2] qualified beneficiaries will still have to pony up a percentage of their premium if they want to stay in their plan or will have to switch plans altogether.
Bottom line, it’s all about cost-sharing as a mechanism for controlling costs, at least with respect to Pharma and Medicare Advantage plans; and, in a pharma marketplace which is forecasted to remain rather staid next year,[3] profits have to be generated from many levels. Medicare Part D has its share of choices for the beneficiary, but due diligence will be the guide to retaining skin in the game for the patient as savvy health care consumer. | LINK
The country’s largest drug lobby, PhRMA, spent $6.9 million during the first three months of this year on lobbying expenses, an almost 40 percent jump from what it spent on average per quarter last year. The biggest reason for all the new hires? Democrats. The lobby is particularly targeting Sen. Baucus — the leading reform figure and Sen. Kennedy alternative to a more conservative approach to Obama’s proposed healthcare reform package. Recall that PhRMA recently pledged $80M to the healthcare reform effort, with 2/3 going to fund, among other things, a so-called “reform fee”, which will charge pharma companies a fee to cover any difference between the cost of Medicare, Medicaid and biogenerics programs and the $80M spending commitment. Are PhRMA lobbyists trying to pre-empt efforts of some congressional Democrats’ attempts at industry price controls as part of the reform package? | LINK
How about this as a case of cost shifting? Some states are considering whether to cut off aid for patients who will reach the doughnut hole in their Medicare Part D coverage (that gap in coverage that starts when benefits exceed $2700 of the beneficiaries’ cost of care). Considering the average patient over 65 years of age takes at least 5 prescription medications, the cost savings to bring aid to patients in the Part D coverage gap may pale in comparison to the costs to treat them when they get sick as a result. Hospitalization occurs, and, well, we all know what happens to the cost of healthcare once preventive services are shifted to the acute care realm. | LINK
The global plan to eradicate measles by 2010 is unlikely to come about say epidemiology experts because of high rates of infection in some parts of Europe where many children go unvaccinated.
Happy New Year! from Doctor Pundit. Posting to resume on 1/2/09.
At a time when the weak economy is hurting the industry, medical groups say they are grateful for the bump in business, however temporary. To cope with demand, doctors are adding hours and delaying vacations. High-deductible plans with health savings accounts were introduced in 2004 and now cover about 10 percent of insured Minnesotans. At the same time, deductibles for traditional plans — known as preferred provider organizations — also have jumped, with a $1,000 deductible now the national norm, according to benefits consultant firm Mercer.
Never has the need for transparency been greater for the Medicare Part D drug plan than when the new so-called reference-based pricing will begin on covered branded drugs possessing generic equivalents, in January. Under this plan, beneficiaries will have to pay an additional fee for these drugs under Part D, as opposed to other drugs which have no generic equivalent. Let the confusion begin.
[C]ritics complain reference-based pricing can result in hidden charges. “I am concerned that beneficiaries could find themselves paying far more out-of-pocket than they expected,” Rep. Pete Stark, chairman of the House Ways and Means health subcommittee, recently wrote in a letter to the Centers for Medicare and Medicaid Services. “CMS needs to make sure that beneficiaries are aware of these penalties before they choose their plans.”
Is this a job for the new HHS Secretary? | LINK
Originating from Saint Paul, Minnesota, [doctorpundit.com] is a weblog about the policy of healthcare and where it intersects with politics and public opinion; it is edited by Michael Douglas, MD, MBA. Welcome, and please consider my take on what is Healthcare 2.0, complemented by a few of my thoughts on my personal avocations and guilty pleasures: music, prose, and writing. Follow Doctor Pundit via RSS above.
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DOCTOR PUNDIT @ ONE YEAR | An occasional DP series from 2010 highlighting healthcare policy trends over the period from 2009-2010 in a compare/contrast format.
