On Friday (10/12/12) the U.S. Department of Health & Human Services released the 2013 quality ratings for Medicare Advantage and Part D prescription drug plans. These star ratings summarize how well the plans performed on well-established measures of quality such as access to care, responsiveness, and beneficiary satisfaction. Plans can earn up to 5 stars, from one star for poor performance to 5 stars for excellent performance. Star ratings are reviewed each year and the results are published by CMS in the fall.

HHS Secretary Kathleen Sibelius said, “People with Medicare have more high quality choices and the performance of Medicare Advantage plans is improving,” and there are “more four and five star plans than ever before.”

Four & Five Star Plans
Plans 2012 2013
Medicare Advantage 106 127
Part D 13 26

To encourage people to enroll in higher quality plans, CMS is notifying people who have been enrolled in low performing plans (plans that received less than 3 stars for the past three years) that they can enroll in a new plan if they want to. Star ratings, in addition to cost and coverage, help consumers compare plans and choose the right one for their needs and budget.

5-star plans are allowed to market and enroll people throughout the year, and thousands of people “took advantage of this opportunity to join a top performing plan,”  according to Sibelius. People can switch to a 5-star plan at any time during the year, but they can only do so once each year.

In addition to better quality, HHS announced that Medicare Advantage benefits are increasing and premiums are holding steady. According to HHS data, average premiums fell 10% and enrollment increased 28%. Premiums for Part D prescription drug plans are expected to remain steady with last year at about $30 on average for 2013.

Related Stores:

Health plans “score” with Medicare’s 5-star rating system

New MA star ratings released by CMS

Preliminary CMS 2013 Medicare Advantage payment and policy guidelines

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.

The Centers for Medicare and Medicaid Services (CMS) has announced that 2013 will bring changes aimed at continuing to improve the quality of Medicare Advantage and Part D plans while helping seniors afford their prescription medications.

The Affordable Care Act Changes to Part D Prescription Drug Plans in 2013

The Affordable Care Act includes provisions that, over time, are reducing the cost of prescription drugs for people who fall into the coverage gap, or “donut hole.” In 2011 and 2012, the discount for brand name drugs was 50%; in 2013 and 2014, it will increase to 52.5%, and will grow after that until it reaches 75% in 2020.

The discount for generic drugs is increasing too; in 2013, it will be 21% so that you will pay 79% of the cost of your generic prescription medications. The generic drug discounts will also continue to increase, until they reach 75% in 2020, with the remaining 25% to be paid by you.

Other changes to Part D plans in 2013 include:

  • The standard Part D plan initial deductible will increase to $325 (up from $320 in 2012). Your deductible may differ.
  • Premium costs in 2013 are expected to remain at 2012 levels, around $30.00 per month on average. If you see a large increase in your Part D premium, you can make changes during the Open Enrollment Period.

Special Enrollment Period to switch to 5-star rated Medicare Part D or Medicare Advantage plans

CMS developed its quality rating system for Medicare Advantage and Medicare Part D plans a few years ago, basing it on well-established measures of health care delivery quality such as access to care, responsiveness, and beneficiary satisfaction. Plans can earn from 1 to 5 stars.

Although 5 star plans were few in 2012, forecasters are predicting they will be more widely available in 2013 as more insurance companies achieve the service levels necessary to earn the rating.

If you want to switch to a 5-star rated plan in your area, you can do so at almost any time during the year. The Medicare Advantage and Medicare Part D 5-star plan Special Enrollment Period this year runs from December 8, 2012 through November 30, 2013.

Special Enrollment Period to leave a consistently low rated Part D or Medicare Advantage plan

If either your Medicare Advantage or Part D plan has failed to achieve at least a 3 star rating from CMS over the last three years, you should expect to receive a letter from CMS offering you a Special Enrollment Period to leave your plan and choose a new one.

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.

If you’re evaluating a Medicare exchange solution for your retirees, you may be wondering how much time the transition will take so you can figure out when to get started. After five years of experience at Extend Health, we have developed a process and a recommended timeline that works. If you are planning to move your retirees to coincide with the change to the RDS taxable status, this article will help you understand what you need to do to make the transition before the change takes place on January 1, 2013.

The actual start date for the process is determined by the start date for new insurance benefits. Employers can choose any start date they wish. In an ideal world the process would take place over a five to six month period, divided into four phases as follows, with key milestones in place during each phase:

  • Planning: Starts four to five months before enrollment begins (seven to nine months before new coverage start date) and lasts six-eight weeks
  • Retiree Education: Starts 45 days before enrollment begins and lasts six to seven weeks
  • Enrollment: Starts 90 days before start of new coverage. Employers have the option of designating the dates or length of time during which they want enrollment to take place; we recommend allowing four to six weeks.
  • Post Enrollment: The employer’s responsibilities during this phase are minimal. Extend Health takes over all administrative tasks for the newly-enrolled retirees.

Phase One: Planning

Ideally, this phase takes place four or five months before enrollment begins. Once the decision to move forward has been made, there are a number of key elements that need to be put in place before announcing the change, including:

  1. Employer and Extend Health team meet to plan transition
  2. Do data analysis to determine retiree HRA funding amounts
  3. Write and distribute employer announcement of benefits change

Phase Two: Retiree Education

This phase, which starts 45 days prior to enrollment, is focused on making sure retirees understand the changes to their benefits and the process for enrolling new coverage. During this phase:

  1. Getting Started Guide, first Extend Health mailing, delivered to retirees. Includes welcome letter, FAQ, and workbook to assist in creating profile
  2. Retirees create profile either on-line or on the phone with a benefit advisor
  3. Retirees schedule enrollment appointments
  4. Retiree on-site meetings take place

Phase Three: Enrollment

The start date of the enrollment phase is calculated by looking at the start date for new coverage and counting back 90 days. The employer can choose any start date it likes. For example, if an employer wants new coverage to start on June 1, then enrollment should begin on March 1. This allows time for insurance carriers to process the new applications and mail insurance cards to retirees in time for the start of coverage. During this phase:

  1. Retirees receive the Extend Health Enrollment Guide, including Medicare basics plan education, what to expect on the enrollment call, and appointment confirmation.
  2. Enrollment calls take place.
  3. Extend Health delivers reminder post cards and (if necessary) certified mail to those retirees who do not respond in a timely manner.

Phase Four: Post-Enrollment

The employer’s role is minimal during the post-enrollment phase. Retirees often have questions during this phase but Extend Health has a team of benefit advisors and customer service representatives who will help them with carrier or HRA issues, or any future changes to their medical and prescription drug requirements. During this phase:

  1. Extend Health delivers plan selection confirmation letter
  2. Insurance carriers send out welcome guides and new insurance cards
  3. Extend Health delivers a welcome letter and the HRA packet

Example timeline

If an employer wants new retiree benefits to start on September 1st, the timeline for a smooth transition would look something like this:

  • Phase 1 planning begins between February 15 and February 28
  • Phase 2 retiree education begins April 15
  • Phase 3 enrollment begins June 1
  • Phase 4 post-enrollment begins with the start of new coverage on September 1

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare exchange.

We just put out a press release announcing some results from the 2011 Medicare annual enrollment period. In addition to helping more than 150,000 people evaluate and choose Medicare plans, we were able to submit 99% of enrollment applications to carriers within 24 hours, thanks to our back-end integration with carriers.
Read More >

Visit Extend Health — the nation’s largest private Medicare exchange.

On Wednesday (10/12), the federal government released its annual review of private Medicare Advantage health plans. In addition, 5-Star quality ratings are now posted along with the plans loaded in “Medicare Plan Finder available on Medicare.gov.

This year health plans are paying much closer attention to their ratings because they stand to make more money if they score higher on Medicare’s 5-star quality rating system. The bonuses could be substantial, even for insurers that only make small increases in their ratings. Carriers with well-rated plans hope that the droves of baby boomers becoming eligible for Medicare will pay attention to the star ratings and choose their plans.

The ratings are based on 36 measures in five categories, covering things like screenings, tests, complaints, service, and other relevant measures. There’s a helpful CMS document called, “Choose Higher Quality for Better Health Care,” that provides a very good overview of the program. We also recommend reading our previous blog post, “New MA star ratings released by CMS.”

For more, check out these very good articles written recently on the subject.
Private Medicare Plans Use Stars To Navigate For Profits” from NPR

Chasing The Stars, Insurers Improve Quality — And Revenue” from Kaiser Health News

Visit Extend Health — the nation’s largest private Medicare exchange.

Washington Extension

October 7, 2011

Medicare News

Researchers at the Harvard School of Public Health found that among Medicare beneficiaries in their last year of life in 2008, one-third had a surgical procedure performed. One-fifth had surgery in the last month of life, and one in ten had surgery in the last week of life. The rates of surgery varied dramatically across the country, but geographic variation is controversial because it is unclear whether it reflects unnecessary care or true differences in patient needs. This report adds to the influential research conducted by the Dartmouth Atlas of Health Care showing Medicare beneficiaries living in areas of the country with lower intensity of end-of-life care do not have higher mortality rates.

The Michigan state legislature voted to end retiree health benefits for future and newer sitting legislators, in the face of state budget shortfalls. Retiree health benefits cost the state about $5 million in the last fiscal year. Governor Rick Snyder has promised to sign the legislation.

ACA Updates

The Institute of Medicine (IOM) released its highly-anticipated report on the criteria for determining essential health benefits (EHB) that ACA-qualified health plans must cover. The ACA defined ten categories of commonly-covered health services that plan benefits must include. The IOM identifies criteria for defining and updating specific components of the EHB, including: use a public deliberation process, include only medically necessary services that are value-based, promote some state flexibility, make annual updates based on credible evidence of effectiveness of benefits, and rely on typical coverage in the small employer market. Unlike Medicare’s coverage standard of “reasonable and necessary”, the IOM recommends higher standards for benefit coverage, such as the treatment demonstrate meaningful improvement over current effective services/treatments, and is cost effective. These criteria (among others) are aligned with the criterion that the EHB package, in aggregate, be affordable.

In ongoing litigation regarding the ACA, 26 states and the NFIB filed petitions to the Supreme Court to appeal the ruling in the Eleventh Circuit which struck down the individual mandate but upheld the remainder of the ACA. The Department of Justice also filed its own petition requesting review of the Circuit Court decision, significantly increasing the odds that this issue will appear on the Supreme Court’s docket this term (though the Court may have more than one case to choose from). Outstanding questions remain about the ability of the Court to rule on a federal tax law before anyone has actually paid the tax (i.e. the individual mandate penalty).

Nebraska will wait until the Supreme Court decides on the constitutionality of the ACA before setting up a health insurance exchange. According to the governor, the state is designing a program and applying for federal funding, but won’t build a “formal proposal” until the Court decides. Minnesota’s prospects are less clear: while the governor has secured millions of federal dollars, and has support to design a state-run exchange from the Minnesota Chamber of Commerce and some Republicans in the legislature, a debate rages about whether the governor needs authorization from the GOP-controlled legislature—which has been unwilling to pass a bill—to set up an exchange.

On the Hill

House Republicans released their 2012 draft budget for health, labor and education, totaling $153.4 billion. This compares with the Senate Democrats’ proposed budget of $165.3 billion. The Republicans’ draft bill prohibits funds to implement the ACA, as well as provisions to rescind funding already provided for ACA programs. Rep. Denny Rehberg (R-MT), chairman of the House Appropriations Labor-Health and Human Services subcommittee, recently wrote to the “Super Committee” recommending they cut ACA Medicaid expansions and affordability credits to achieve their $1.2 trillion deficit reduction goal.

Reports/Other News

About one quarter of retirees think that life in retirement is worse than before they retired, according to a RWJF/NPR/Harvard School of Public Health poll. This compares with only 14% of pre-retirees who expect that retired life will be worse. Retirees cite costs of medical treatment and long-term care as especially worrisome. Many fewer pre-retirees think that their health will be worse (13%) during retirement than retirees who say their health actually is worse (39%). Pre-retirees are also less confident (38%) that Medicare will provide benefits of at least equal value to current benefits than retirees (52%).

Average annual premiums for employer-sponsored health insurance in 2011 rose 8% for single coverage (to $5,249) and 9% for family coverage (to $15,073) over 2010 costs, according to this year’s Kaiser Family Foundation/HRET employer health benefits survey. The percentage of total premium paid by workers is similar to 2010 (18% for individuals, 28% for family coverage). Among firms offering coverage to employees, 26% offer retiree coverage, similar to 2010. State and local governments are most likely to offer retiree health benefits (83%), while large firms in the retail and wholesale industries are least likely (15% and 16%). Nearly all (91%) of offering large firms cover early retirees below age 65, while 71% cover Medicare-age retirees. AHIP blames rising insurance costs on prices for medical services, asserting that Washington must do more to control cost growth. Kaiser attributed 1-2% of the premium increase to provisions of the Affordable Care Act, including allowing children up to age 26 on their parents’ health insurance.

The Government Accountability Office (GAO) released a report showing 170,000 Medicare Part D beneficiaries received prescriptions for controlled substances from five or more physicians in 2008, indicating fraud and prescription drug abuse in Part D. In ten individual cases examined by the GAO, physicians did not know that their patients were receiving drugs prescribed by other physicians. Although Part D plans are required to perform retrospective drug utilization reviews to identify inappropriate or unnecessary medication use, plans are not authorized to restrict drug access based on the findings.

Visit Extend Health — the nation’s largest private Medicare exchange.

The Washington Extension

September 23, 2011

Medicare News

The Obama Administration has recommended $320 billion in cuts to health care programs (pdf, p.35). The Medicare program is implicated by the following major policy proposals, almost all of which have been previously proposed and are roundly criticized by industry and consumer groups:

  • Impose a Part B premium surcharge equal to about 15% of Medigap premiums for new beneficiaries who purchase Medigap policies with “particularly low cost-sharing requirements”, starting in 2017
  • Impose $100 copayments for home health services (currently there is $0 copayment)
  • Increase the Part B deductible faster than currently projected
  • Increase the premiums that high-income Medicare beneficiaries pay
  • Drug companies pay rebates for drugs sold through Medicare Part D to low-income patients, similar to the current Medicaid rebate program
  • Cut funding from the public health fund created by the Affordable Care Act

As Extend Health has noted elsewhere, the Healthcare Leadership Council—comprised of health care industry leaders such as Pfizer, Aetna and the Mayo Clinic—proposed $410 billion in deficit reductions that they claim would also increase Medicare’s long-term solvency. The Medicare proposals include creating a “Medicare Exchange” where seniors can choose among private plans, increase the Medicare eligibility age to 67 from 65, cap annual out-of-pocket costs, and dramatically increase Medicare premiums for higher-income beneficiaries.

ACA Updates

The Federal government is increasingly looking to offer states options to share the responsibility of creating and running health insurance exchanges. The Center for Consumer Information and Insurance Oversight at Health and Human Services is proposing three options, including: 1) states managing health plan participation, 2) helping consumers navigate the system, or 3) both. Any of these options would leave the eligibility and enrollment processes to the Federal government.

New York State’s Republican-led Senate is blocking efforts by the state to pass a bill establishing a health insurance exchange. New York already received $39 million to begin establishing an exchange, but the Republicans’ refusal to take up the bill negotiated by lawmakers and Governor Cuomo is obstructing the state’s ability to seek additional Federal financing.

Michigan’s Republican governor, Rick Snyder, has recommended that the legislature pass a bill creating a non-profit health insurance exchange called MIHealth Marketplace. The exchange would be governed by a Board appointed by the governor, with an advisory panel comprised of representatives from small business, consumers, insurance plans, providers, agents and others.

The Blue Cross Blue Shield Association (BCBSA) is criticizing the Obama Administration for releasing regulations too slowly, and being too vague in those that are released. In particular, BCBSA alleges that the health insurance exchange regulations don’t have enough information about how the marketplaces will function, what will be the minimum requirements for plans in the exchanges, and the lack of information about selling insurance outside of exchanges.

Reports/Other News

A Mercer study finds that premiums for employer-based insurance coverage will rise 5.4% in 2012, the lowest growth in fifteen years. Survey respondents attribute this low growth to less utilization, due to a slow economy and cost-cutting benefit changes such as higher deductibles or cost sharing.

The National Council on Aging and UnitedHealthcare find that fewer than half of seniors understand Medicare well, and half describe their understanding of the Affordable Care Act as “poor”. Even among widely advertised ACA reforms, there is little understanding: less than 1/3 of seniors are aware that they will pay a discounted amount in the Part D ‘donut hole’. Finally, just over half of seniors say they have excellent or good knowledge about evaluating their Medicare options.

Visit Extend Health — the nation’s largest private Medicare exchange.

Extend Health gets a nice mention in an article by Glenn Ruffenach in today’s Wall Street Journal Smart Money magazine. Mr. Ruffenach provides plenty of sound advice on how to navigate the Medicare maze for those of you who are just becoming eligible. To help explain just how difficult it can be without some professional help, he talked to Michigan retiree Barry Wood. Mr. Wood tried to create a chart on his own to compare his options and says, “It was the most confusing thing I’ve seen in my entire life.”

What Ruffenach doesn’t say is that Mr. Wood then turned to Extend Health for help finding the right plan. In a conversation with Extend Health, he told us that, “You have to realize when you turn 65 that your health benefits are going to change. I think people have to take better care of themselves and what they’re doing, and be prepared for the changes that are going to occur in their lives. You can’t just sit there and let the time come and go ‘oh my gosh’ what am I going to do, I didn’t know this was going to happen.’ I think people have to be proactive and they have to understand what is going to happen in their lives. Working with Extend Health was excellent because without the advice and counsel of the advisor, I would not have made the proper decision about my healthcare.”

Good advice from both the Wall Street Journal and Barry Wood, a retiree who’s been there.

Just two weeks from this first day of the 2010 Annual Enrollment Period, the first of the Baby Boomers will become eligible to register for Medicare. That date signals the start of a  wave of 77 million Americans who’ll reach 65 in the next 18 years – one every 8 seconds – the largest single generation in our country’s history.  USA Today just published a long piece on what the aging of the Boomers willmean for the country. The article looks to be the start of a longer series called Senior Moment: Boomers Turn 65.  Interesting reading and worth keeping an eye on to see what comes next.

As part of our ongoing effort to make sure people aging in to Medicare have the information they need, Extend Health just put out a press release titled “For Seniors Turning 65: With the Medicare Annual Enrollment Period Less Than a Month Away, Five Things You Should Know About Medicare and Your Coverage Options.”  The press release provides a link to our free guide to Medicare, which includes a section on eligibility rules, explains the different parts of Medicare, the advantages of different private Medicare options, and how to enroll, and contains a glossary of Medicare terms. If you’re a person aging in to Medicare, or an employer with Medicare-eligible employees or retirees asking questions about Medicare, this guide is a very useful resource.