Medigap News

There has been an official response from the Centers for Medicare and Medicaid Services on improper Medicare Advantage Plan marketing:

In response to concerns about marketing practices in the insurance industry, seven health care sponsors have agreed to suspend marketing of private fee for service plans.

United Healthcare, Humana, Wellcare, Universal American Financial Corp., Coventry, Sterling and Blue Cross/Blue Shield of Tennessee signed the agreement with the Centers for Medicare and Medicaid Services.

We have written quite a bit about deceptive practices of some Medicare Advantage agents. In response to 2,700 complaints that were lodged with the Centers for Medicare and Medicaid Services between December 2006 and April 2007, 6 large angencies have imposed a voluntary marketing suspension of Medicare Advantage plans, effective June 22, 2007.

There are several guidelines that must be met before the suspension is lifted:

• All advertising, enrollment and sales materials must include disclaimer language provided by CMS.
• All representatives selling the product must pass a written test to demonstrate their thorough familiarity with both the Medicare program and the product they are selling.
• A provider outreach and education program must be in place to make sure providers have reasonable access to the plan’s terms and conditions of payment. Provider relations staff must be accessible to assist providers with questions about the plan.
• Outbound education and verification calls must be made to all beneficiaries requesting enrollment to make sure they understand the plan rules.
• Planned marketing and sales events must be sent to CMS and will include events sponsored by delegated brokers and agents, as well as those sponsored by the plan.
• Plan sponsors must provide a complete list of all representatives marketing a private fee for service product and authorize CMS to make that list available to state insurance departments upon request.

We believe this suspension is a great step in protecting seniors from ruthless, misleading sales agents who inappropriately push these Medicare Advantage plans whenever possible because of the high commissions. We will be following the progress closely. We truly hope that the mainstream media continues to cover this issue so we can bring more awareness to the issue in the minds of under-educated seniors.

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As we have previously discussed, in order to be covered by a Medicare Advantage Plan, you must opt out of traditional Medicare coverage. This key fact is often misunderstood because of improper education, or worse because of deceitful Medicare Advantage agents. Our reader question today comes from Frank in Bellevue, Washington:

Q: I enrolled in a Medicare Advantage Plan and disenrolled from Medicare without really understanding what my options were, and now I want to return to traditional Medicare with Medigap insuance. Is there any way to undo my mistake?

- Frank

Hi Frank! Don’t worry, you are NOT alone. Fortunately, you can reverse your mistake, but there are several things to understand about the process:

• You MUST make the decision to return to traditional Medicare within 1 year of switching to a Medicare Advantage Plan.
• When there are 60 days left on your Medicare Advantage Plan, you may apply for your Medicare Supplement Insurance (aka. Medigap).
• No matter what, you MUST apply for your Medicare Supplement Insurance with 63 days AFTER your Medicare Advantage coverage ends. (So 63 days after you return to traditional Medicare.)

It’s critical that seniors understand that they DO have a choice in getting their health care needs met. There are options, and there are ways to reverse mistakes, but understanding the deadlines is absolutely essential. There are so many options that it’s easy to get overwhelmed. The best thing to do is to contact a licensed, qualified agent who can go over each and every option that’s available. That will allow you or your loved one to make the best health care choice possible so that mistakes aren’t made that need to be reversed.

Getting older can be a tough thing to face for some people. While many of us welcome the changes and challenges that come as we grow older, some of us don’t want to face the choices that need to be made once the ticker hits 65. Often, caring family members and friends must take the lead for aging loved ones who are not willing to face the choices that need to be made as we age.

Making choices about health care and health insurance should always start with a healthy dose of education. Often this means that the caretaker must spend to time to get familiar with what’s available so they can discuss intelligently with their loved one who is turning 65. This can be done online, by researching though Google, or you can contact a licensed Medigap agent who can identify what works well in different situations. This information-gathering phase is critical to ensuring that the best health care decision is made based on the loved one’s unique situation.

Before any care decisions are made, it’s imperative that the caretaker fully understand the financial situation of the loved one. This is so important because there are so many differences in out of pocket expenses and levels of care between Medicare with medigap supplemental insurance and private free-for-service Medicare replacement Medicare Advantage. Making the wrong decision could be devastating.

It’s also important to start the dialogue of legal protection and directives with your loved one. Do you know what your loved one would want in the event of a dire health emergency? Do you know if your loved one would want to be left on life support in the event that recovery would be impossible? Has your loved one given Power of Attorney to someone who can be trusted? If you are thinking ahead for yourself, all of these questions must be addressed *before* you get to the point that you need the answers.

These issues don’t make the most pleasant dinner conversation, but by helping a loved one get their affairs in order in regard to health care coverage and issues laid out in their living will, you are doing a great service to them at a time in their lives when they should be enjoy comfort and relaxation after a life of hard work.

*This is not legal advice. Please seek counsel from a qualified attorney before making any decisions.

Many seniors are in the financial position to spend the winter months in a warmer climate, and the summer months in a cooler climate. Of course, with this travel, seniors must be aware of how their health coverage will follow them across state lines. If you enrolled in your insurance coverage in your home state of Michigan, can you sure you will get the same coverage when you travel to Florida for the winter?

Q: My husband and I have finally started spending the winter months in Florida, but we didn’t think that we needed to consider our Medicare coverage in our plans when we enrolled last year. How can I make sure that we are covered, no matter where we are living?

– Dee in Omaha

Hi Dee!  Great question.  Here are some things for you to consider:

• First, make sure that you enroll in your insurance and supplement coverage in your place of legal residence - which is the place where you are for most of the year.
• Beware of Medicare Advantage Plans in these situations. While you may enjoy the coverage that you get locally, (though you may not), it’s very possible that you will not enjoy that same level of coverage as you travel. For example, if your Medicare Advantage Plan is a PPO, you may have difficulty seeing a doctor regularly when you are away from home because of your network coverage. This is yet another dangerous situation to consider when you are shopping to improve your standard Medicare coverage.
• If you are insured by Medicare and you have purchased Medicare Supplement Insurance to bolster your coverage, you can be sure that any doctor in any part of the country who serves Medicare patients will see you. This is one reason why medicare supplement insurance is a great choice for seniors.

Traveling is something that many, many seniors enjoy, but without the proper health coverage, wintering in warm climates can quickly turn into a nightmarish situation if you find that your Medicare Advantage Plan doesn’t provide you with adequate coverage. Talk to a licensed, educated, and passionate medicare supplement insurance agent who can provide you with the information that YOU need to make the best decisions possible for the health of you and of your spouse. Don’t go it alone - there are people out there to help you make the right choice.

If you are a senior who is covered by Medicare, please carefully consider the following:

As to medical expenses, some ordinary health/medical policies, including HMOs, do cover you while you’re away from home, even outside the United States. But some don’t, and even when they do, you may have a stiff deductible. Check your program.

Medicare never covers foreign travel, and the foreign-travel benefits of Medicare supplement policies “C” and higher are limited: 80 percent of emergency medical treatment costs, with a $250 deductible. Seniors dependent on Medicare who travel outside the United States should, therefore, consider additional medical coverage.

Admittedly, health insurance coverage while traveling is generally not on the mind of most adventurers, but it should be.

The process of signing up for Medicare creates a lot of questions and confusion to the minds of seniors everywhere. While it’s not easy, it is possible to get a grip on the main concerns and decisions that seniors face as they get ready to turn 65 and they ready themselves for Medicare.

Kiplinger.com recently put out a great primer for seniors with questions about Medicare.

…you’ll have to figure out how Medicare dovetails with your workplace or retiree coverage and understand its coverage gaps. You must also choose between managed-care benefits or fee-for-service coverage.

Kiplinger reccomends that you contact the Social Security Administration three months before your 65th birthday. Your enrollment period starts here and extends three months past your birthday. You can contact the SSA at 800-772-1213 or www.SSA.gov.

Understanding the enrollment period has far reaching implications, so please read and understand the following:

Everyone is eligible for Medicare at age 65, even when an individual’s normal retirement age for Social Security benefits is later. If you were born in 1942, your full retirement age will be 65 and ten months. If you wait until then to sign up for Medicare, you’ll miss the initial enrollment period for Part B coverage, which covers outpatient care. You’ll have to wait until the general enrollment period, which runs from January 1 to March 31 for benefits starting July 1.

But you will incur a 10% premium penalty for each year you wait beyond your initial enrollment period. You’ll pay that surcharge as long as you have Part B, which this year costs $93.50 a month. You can sign up for premium-free Part A, which covers hospital services, at any time with no penalty.

For the Part D drug plan, you must apply during the initial enrollment period to avoid a penalty, which accrues monthly. If you miss the initial period, you can sign up during the last six weeks of the year for coverage that begins January 1. You can avoid the Part D late fee if you can prove that you had drug coverage elsewhere that is at least as good as the Medicare benefit.

If you opt for fee-for-service care, make sure you sign up for a Part D plan as well as private supplemental coverage to fill Medicare’s coverage gaps, called Medigap. An alternative is a Medicare Advantage managed-care plan, which includes gap and drug benefits. This option will likely be cheaper than traditional Medicare, but you may lose the provider choice of fee-for-service care.

The primer goes on to discuss Medicare coverage when you are still employed and coverage by your workplace insurance, so please make sure to read the full article for more inforamation.

Because the process of enrolling in Medicare and then supplementing the coverage for more complete care involves working with a government agency as well as private insurers, the industry can be rife with scammers who try to dupe seniors into signing up for covered that isn’t in their best interest.

The Better Business Bureau of Idaho has put out a warning to seniors: Beware of phone callers who claim to be calling from Medicare. They are NOT.

Senior citizens all around southern Idaho report receiving telephone calls from individuals claiming to be from Medicare or calling on behalf of Medicare. The callers tell our senior citizens that their insurance benefits are about to expire and the seniors must renew to ensure continued service. The telephone renewal process consists of providing a Social Security number as “identification,” and a bank account for the deposit of benefits.

Unfortunately, this scenario is not at all uncommon, though the contact sometimes happens in the form of uninvited home visits or slightly less intrusive direct mail pieces. Because of the complication of the process, it’s very easy to get uneducated, naive seniors who are simply trying to get the best coverage that they can to sign up for programs that are not at all in their best interest.

The Better Business Bureau offers these tips to seniors who are at risk of being scammed:

• Never give your Social Security number or bank account number to someone claiming to be from a government agency. When in doubt, hang up and call the agency directly using a number published in a local phone directory.

• Remember that Medicare communicates to participants in writing.

• Optional prescription-drug programs are available from many established, reliable insurance providers. Visit with your private provider or a trusted insurance representative to understand all your options.

• Don’t confuse “health programs” with health insurance. If the program doesn’t specifically say it is insurance, it is likely a membership or discount buying program and may not reimburse you for drugs and other medical expenses.

If you are currently contemplating a change in coverage, or if you have been contacted by someone who has made you doubt the healthcare choices that you have made, please contact a qualified, licensed agent who can help you understand exactly what your choices are.   

Here are some great facts for our readers about ‘fee for service’ plans (Medicare Advantage Plans):

• Private fee-for-service plans have existed since 1997. They became more common after passage of the Medicare Modernization Act in 2003. Recently, they have increased rapidly in rural and non-metropolitan areas such as the Treasure Coast: Between December 2005 and February, national enrollment in these plans grew 535 percent to more than 1,338,000 people.

• Medicare pays companies a set amount per year for each Medicare beneficiary they sign. Companies, in turn, sign beneficiaries to policies offering the same benefits as traditional Medicare but also may add prescription drug, vision and other benefits. But fee-for-service enrollees are not allowed to purchase Medigap insurance to supplement their cost-sharing requirements, as are other Medicare enrollees.

• Unlike health maintenance organizations and preferred provider types of health insurance, private fee-for-service plans do not require insurance companies to maintain a network of doctors and hospitals that accept their coverage. Patients are responsible for making sure a health care provider accepts their plans’ terms of payment.

• Doctors and other health care providers can choose whether to accept a private fee-for-service plan and provide services to an enrollee at each visit.
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I think that the biggest thing that is pointed out by these bullets is that if you enroll in a Medicare Advantage Plan, you are suddenly dealing with private insurance companies - NOT the government. This is important because there are fewer requirement on these companies, which means more ambiguity for our enrolled seniors.

Why on earth should our seniors have to choose health care coverage that has more out of pocket expenses, a smaller network of doctors and hospitals, and there is no ability to supplement their coverage with outside assistance? Not to mention that this makes seniors dis enroll from their government-run Medicare coverage…

I read a fascinating commentary today called, “As Medicare goes private, the press just stands by.” It offers the notion that it appears as though the media is paying no attention to the deterioration of the Medicare system thanks to the overtaking of the well-funded, well-marketed (but less than stellar) Medicare Advantage Plans.

The author points out that Medicare is seemingly contributing to the problem:

“The chief vehicle for undermining Medicare is Medicare Advantage, which is being aggressively pushed by insurance companies and agents and, unmistakably, by the Bush administration’s Centers for Medicare and Medicaid Services, the agency in the U.S. Department of Health and Human Services that oversees Medicare. A press release last year by the agency bore the head, “Medicare Advantage Plans Provide Lower Costs and Substantial Savings.” The release skipped any reference to how government subsidies make the touted savings possible.“

So what’s to be done? In other cases of the government derailing its own systems, the press would step in and fire at the President and his team and that should create some sort of equilibrium to put everything back to center on this issue, but in this case, that’s not happening.

“The press was on its toes when the Bush Administration proposed private investment accounts, saw it for the scheme to privatize Social Security that it was, reported on it and thus helped derail privatization when the public understood what was at stake. Not so with the administration’s plan to privatize Medicare.”

While we have been chronicling the problems with Medicare Advantage, the issues discussed in this commentary go far deeper than deceptive marketing - the issues point to an entire unraveling of the Medicare system thanks to the special interests of private insurers and the government’s desire to subsidize the efforts to privatize Medicare.

What does that mean to you?

That means that at some point there may be no government funded Medicare. It could mean that seniors have no choice but to use a private insurers with higher rates and high out of pocket costs. The author of this piece fears that that will happen, and people won’t even notice until it’s too late.

“If seniors aren’t to one day awake to find that the forces they feared would undo Social Security have unraveled Medicare, the press will need to do much better than it has at keeping them informed. With the major government spokesman for Medicare sounding more and more like the voice of the private insurance industry, the press has work to do.”

We will keep reporting on this topic, as we believe that the implications of changes to Medicare as described above could be devastating for America’s seniors. Please, only talk to qualified, licensed insurance agents who can talk with you about all of your options and not steer you towards plans that offer *them* more lucrative commissions.

As we have been telling you for some time, Medicare Advantage plans can be confusing and misleading. Now, the Center for Medicare Advocacy agrees with us.

They blatantly state in their report:

“PFFS (*private fee for service) plans have been touted by health insurance organizations as providing Medicare beneficiaries with all the services of traditional Medicare – and sometimes more – with fewer limitations than other MA plans impose on the doctors and hospitals they can use. These claims are incomplete and misleading.“

Furthermore:

“PFFS plans are also exempt from patient-protective statutory and regulatory standards that apply to other MA plans. PFFS plans do not have to:

 

• Pay Medicare standard rates to providers;

• Secure agreements with a minimum number of providers in an area to ensure beneficiary access to care;

• Establish a program to improve the quality of care provided to enrollees;

• Undergo CMS review or negotiation of rates and premiums;

• Offer prescription drug coverage;

• Submit negotiated drug prices to CMS;

• Require pharmacies dispensing covered drugs to inform enrollees of the lowest-priced generic bioequivalent; or

• Establish a drug utilization management program or medication therapy management program (MTMP) to reduce the risk of adverse events. “

What has been made abundantly clear by this report is that Medicare Advantage Plans are marketed in ways that are misleading, and this causes American seniors to be duped into purchasing something that often gives less coverage and more hassle.

“PFFS plans masquerade as a lower cost, open network alternative to traditional Medicare. However, they result in extra costs for taxpayers and for many of the beneficiaries who enroll in these plans while offering far less provider choice than the traditional Medicare program. Most important, their payment and regulatory structures have the effect of weakening traditional Medicare for the majority of beneficiaries who remain in that program.”

It’s absolutely devastating that the people who are affected by this are our seniors. Seniors who have worked hard their entire lives and are then forced to make a decision that could affect the quality of the rest of their lives. The Center for Medicare Advocacy has done an amazing thing by shedding light on the difficult subject, and we truly hope that this report changes the way plans are marketed and it creates a new level of education and awareness in the senior community.

We cannot stress enough that it’s imperative that seniors get qualified advice from a licensed agent who can explain all the benefits and shortcomings of ALL the health care options that seniors have today.  Never before have we been so well cared for - but ONLY if we can get the education we need to make guided decisions.