Extend Health held a tweet chat today on health care costs. There were some great questions and excellent answers from John Barkett, Dir. of Policy Affairs at ExtendHealth fielded questions. John worked in congress on health care and his wealth of knowledge was evident in the answers he provided.

If you missed our tweet chat you can read a complete recap of the event. Hope to see you at the next one!

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

IRMAA explained

February 11, 2011

Thanks to Kaiser Health News for this clear explanation of the increased monthly premiums charged to higher-income individuals and couples for Part D prescription drug coverage. The premium increase was part of PPACA, one of the provisions intended to help finance the law, and is expected to raise about $36 billion through 2019.

The Part D premium increase is tied to Part B premium amounts, which in turn are tied to taxpayer Modified Adjusted Gross Income. Tables showing the Part B and Part D amounts for different income levels can be found on the Social Security web site – scroll down the page ot the section titled Monthly Medicare premiums for 2011.

Titled The Public’s Health Care Agenda for the 112th Congress and fielded just before the repeal vote, the latest Kaiser Family Foundation/Harvard School of Public Health poll results are out today.  Unfavorable views on PPACA, which had been dropping in recent months, took a sharp turn upward to 50% (from a low of 40% in November) while favorable views dropped to 41% – with sharp divisions in opinion along party lines.

Paradoxically, many provisions of the reform bill are viewed favorably by a majority of respondents, including reducing payments to Medicare Advantage plans (56% favorable vs. 35% unfavorable), the 50% discount on drugs in the Part D doughnut hole (85% favorable vs. 14% unfavorable) and increasing Medicare premiums for some higher-income seniors (53% favorable vs. 45% unfavorable). Majorities favor provisions that will expand coverage, but are opposed to individual and employer mandates.

Recommended reading, especially the Chartpak.

Employee Benefit Research Institute has just published an issue brief that estimates how much money someone retiring at 65 will need to pay for health care costs throughout retirement.  The good news: due primarily to the closing of the Part D “doughnut hole,” costs have dropped significantly since 2008, the last time EBRI did this analysis. The bad news: it’s still quite a lot of money. Read the rest of this entry »

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.

With new Medicare regulations taking effect in 2011, we’ve identified four changes to Medicare Part C, D and Medigap plans that retirees should know about because they could affect their healthcare coverage. They  are: 

  1. Some Medicare Advantage (Part C) Private Fee for Service (PFFS) plans are ending
  2. Medicare Part D plans are being consolidated
  3. Four Medigap plans will no longer be sold and two new ones will be offered (Parts M and N)
  4. While average premiums for Medicare Advantage (Part C) plans will decline slightly, some plans’ premiums will rise

Information about the changes and what retirees can do in response follow.

Read the rest of this entry »

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.

Update 2/14/2011: See this post for more about the Part D premium charges, and a link to the table on the Social Security web site where you can figure out what your amount will be.

Update 11/4/2010: A reader called Social Security to find out what his IRMAA would be (see comment below) and was told that he needed to call Medicare to get that information. Maybe he got hold of someone who was uninformed about Social Security’s role in determining the fee? If anyone else calls Social Security and DOES get an answer, we would be very appreciative if you’d leave a comment here to let other readers know about it.


We just posted this in a reply to a question from a reader, but it seems like it might be useful to many individuals and to benefits managers who may be getting questions from their retirees.

The healthcare reform bill (the PPACA) created a requirement that as of Jan 1 2011, higher income people will pay an extra amount in addition to their monthly prescription drug premium. This extra amount is called the Income Related Monthly Adjustment Amount (IRMAA). IRMAA will affect those people whose modified adjusted gross income is $85,000 or more (for singles) and $170,000 or more (for couples filing jointly) in 2009 and later.

The extra amount will be deducted automatically from Social Security checks.

We called Medicare to see if they could provide more specifics. They explained that individuals should call Social Security at 1-800-772-1213 to learn what the exact amount will be and to learn if they qualify for assistance with the IRMAA.

According to a new report from Avalere Health, a healthcare consulting firm located in Washington D.C., the average 2011 Part D premium increase for the top ten prescription drug plans will be just o.23 percent – about 8 cents a month.  The top ten plans enroll about 11.7 million people representing 71 percent of all Part D plan beneficiaries. For all PDPs combined, premium increases are expected to be 9.5 percent – growing from $37.19 to $30.72 per month. The top three plans, which enroll more than 7 million people, will actually see premiums go down by 5.3 percent, from $37.47 to $35.50.

This report updates Avalere’s earlier prediction that the top ten plans’ premiums would rise by 10 percent – a result of one plan with a very high premium increase that was initially expected to be among the most popular dropping out of the top ten.

The analysis was based on data released by CMS on September 21st and Avalere’s own proprietary DataFrame(r) database.

Benefits and human resources consulting firm The Segal Company has just published its yearly survey of health care plan cost trends. Based on responses from 60 insurance carriers, the report offers a wealth of helpful data on the outlook for plan costs in 2011 and compares 2009 actual results to forecasts. The 6-page report is chock full of data on medical plans for active employees, pre-65 retirees, and Medicare-eligible retirees, prescription drug carve-outs, and dental and vision plans.

The report projects cost trends for Medicare Advantage PFFS and PPO plans with prescription drug coverage to increase in 2011 by 7%, vs. an expected 9.5% for 2010. MA HMO plans with RX are projected to grow by 7.4%, vs. a projected 8.2% in 2010. Interestingly, forecasts in the past have erred on the high side, as “…actual trend rates in 2009 for MA HMOs…were significantly lower than forecasted…” and “Actual prescription drug trend rates continue to be lower than forecasted.”