Friday, June 28, 2013

Good News for Medicare Supplement Plan F policyowners

One more aspect of the Affordable Care Act that has been modified in favor of the owners of a Medicare Supplement Plan C or Plan F.

The U.S. Department of Health and Human Services (HHS) has taken the National Association of Insurance Commissioners (NAIC)'s advice not to impose a nominal cost sharing in Medicare Supplement insurance Parts C and F. Kathleen Sebelius, a former NAIC president herself, wrote in a letter to current NAIC President Jim Donelon "I value the NAIC's expertise on Medigap and other health insurance issues and the strong partnership between NAIC and the U.S. Department of Health and Human Services. This partnership has been instrumental in the effective implementation of numerous provisions of the Affordable Care Act."

The HHS had requested under PPACA that the NAIC revise the NAIC Medicare supplement insurance model to include a nominal cost sharing in Medigap Plans C and F to encourage the use of appropriate physician's services under Medicare Part B.

However, last December, the NAIC recommended against this nominal cost sharing and did not revise the standard benefit packages for these model plans. Besides studying the issue, the NAIC communicated caution with proceeding with nominal Medigap cost sharing because it could delay treatments that people really need. This would make the more vulnerable populations worse off in the long run with costly hospitalizations and emergency room visits. Also, when referencing the changes to Medigap's plan offerings that started in 2010, the NAIC stated "We are still learning the impact of these new offerings on both the Medigap market and to the Medicare program."

Despite the HHS agreeing to not go forward with these changes, the Medicare Trustee report has projected that the trust fund that finances Medicare's hospital insurance coverage will stay solvent until 2026, which is two years longer than it was projected last year. Additionally, Medicare Part B and Medicare Part D are both projected to remain funded into the foreseeable future because current law automatically provides financing each year to meet the next year's expected costs.

Thursday, June 27, 2013

Questions Vex PPACA Pediatric Vision Benefits

Should the parents of a child covered under health care reforms who can’t make out the writing on a classroom chalkboard be able to buy Tag Heuer frames? How about a pair of Fendis? Or maybe Guccis?

The federal government says it’s not likely. After all, those are all high-end brands that retail for hundreds of dollars, a price far higher than what most would view as practical and certainly outside the spirit of the Patient Protection and Affordable Care Act (PPACA). Yet, because of a lack of specificity in the law, concerns are running high about the potential for confusion and perhaps even abuse of the pediatric vision care provisions of PPACA.

Pediatric vision services are one of the 10 essential health benefits that all health plans will need to offer if they hope to market themselves in the exchanges, which are supposed to start operating in October for health plans that go into effect in January.

That’s when, under PPACA, all individual and small groups with 50 or fewer employees must provide pediatric vision care coverage as part of their medical benefit for children up to age 19.

Like the other essential health benefits, no annual or lifetime dollar limits are allowed on vision services.

Making matters more difficult, each state is allowed to specify benefits within each of the essential categories, at least for 2014 and 2015. As a result, benefits no doubt will vary from state to state, contrary to what many Americans had assumed when the law was adopted in 2010.

Jeff Spahr, president of WellPoint’s vision business, said the Indianapolis-based insurer has been fielding plenty of questions from employers about whether their vision plans will need to change in light of the law.

WellPoint, as any carrier would agree, views vision care as a high-value benefit that can help lower medical costs and boost productivity, as well as help companies attract and retain employees.

Spahr points to a survey by Transitions Optical that found that providing eye care for their family is one of the top reasons employees enroll in a vision plan, and that three in four full-time parents with access to their company’s vision benefit choose to enroll in it.

But because government regulators left “pediatric vision care" largely undefined, there’s concern about what might end up being covered and what might not.
As Spahr noted in a recent article, Colorado’s benchmark medical plan includes a pediatric eye exam, but no eyewear materials.

Connecticut, on the other hand, has decided on an annual exam for children and adults, plus annual eyeglasses or contacts for children.

Historically, vision plans, whether stand-alone or part of medical coverage, have used allowance-based benefits to cover glasses and contacts. For example, a plan would allow its members to spend $130 to buy frames or contacts.

In other words, they come with a limit on how much a covered individual can spend on frames. Buying more expensive eyewear or contacts typically means reaching into your own pockets to cover any costs beyond the cap.

But, again, PPACA places no annual maximum on essential health benefits.
“It really does change how the industry operates when allowance-based essential health benefits are not allowed,” Spahr said. “A ‘no out-of-pocket limit’ rule for materials could be interpreted as meaning patients will have their pick of the highest-end frames and lenses with all the trimmings.”

Left unaddressed, that potentially could lead to a nation filled with children who might be among the poorest but who, thanks to PPACA, are wearing the latest fashion eyewear.
“That’s not the intent of health care reform,” Spahr said. “Nor would we want to pay out such claims.”

WellPoint and other insurers have been looking at how best to address the issue.
Possible solutions lie in adopting an approach common in the pharmacy world, where certain, typically more expensive, prescription drugs might not be covered when generic medications are readily available.

“We’re not talking about defining materials by dollar limits,” Spahr said. “But we’d identify certain frames that are covered and say to consumers, ‘Here’s a reasonable collection of frames.’ It’s just not opening it up to a thousand choices.” “We want a consumer-friendly solution,” he added.

Insurers aren’t alone in their concern. “No one will underwrite (a pediatric vision benefit) without limit,” said Dr. Michael X. Repka, the American Academy of Ophthalmology’s medical director for governmental affairs.

“I think the benefit is a great thing for children. What I’m hoping is that the right controls and limits will be put in so that it doesn’t become a benefit that is unaffordable.”

While PPACA didn’t establish a national standard on this question, it does say that essential health benefits should “be equal in scope” to benefits offered by a typical employer plan.

“Typical,” of course, isn’t easy to define, so the federal Department of Health and Human Services is hoping insurers and state lawmakers who hash out the details rely on what it’s calling a “benchmark” plan, ideally the largest small group plan in any given state.

Cost limits aside, Spahr said he’s glad PPACA makes it clear vision care remains an essential benefit.

“It really reinforces, on the positive side, how important vision care is, particularly for children. I think 80 percent of learning happens visually. If you can’t see well, you can’t learn well.”

Thursday, June 20, 2013

Administration releases proposed rule on exchanges

The Obama administration is working on easing the operation of the new health insurance exchanges under the Patient Protection and Affordable Care Act.  
The Centers for Medicare & Medicaid (CMS) issued a proposed rule on the exchanges June 17th that aims to provide clarifications, outline oversight of various premium assistance programs and give states more flexibility.

The 253-page rule, released by both the CMS and the Department of Health and Human Services (HHS), is intended to “safeguard federal funds and to protect consumers by ensuring that issuers, marketplaces and other entities comply with federal standards meant to ensure consumers have access to quality, affordable health insurance,” according to the agencies.

In a statement, CMS Administrator Marilyn Tavenner said “the release of these guidelines signals that we’re ready to build on our ongoing efforts and ensure that the new systems are fiscally sound.”

As open enrollment in the new exchanges nears, the administration has struggled with marketing the exchanges and getting both states and consumers on board. The new rules aim to fill in the blanks on some unanswered questions. The new exchanges are a main component of President Obama’s health reform law.

Open enrollment in the exchanges begins in October while coverage begins Jan. 1.
Under the proposed rule, states that operate risk adjustment or reinsurance programs would have new oversight standards that require them to report their operations plans to HHS and the public, and adopt strategies that would “ensure the soundness and transparency of the programs.”

Insurers would be required to issue refunds to consumers and providers if they erroneously apply an advance payment of the premium tax credit or cost-sharing reductions, or incorrectly assign consumers to a standard plan without cost-sharing reductions.

Under the proposed rule, CMS would amend the definitions of "small employer" and "large employer" so each state can limit small employers to having no more than  50 employees until 2016.

The rule also sets guidelines on exchange payments and helps allow people without bank accounts or credit cards to pay for coverage in the exchanges. The proposed rule would require a qualified health plan accept paper checks, cashier’s checks, money orders and refillable pre-paid debit cards so all individuals can pay their monthly premiums. Experts had predicted that millions of "unbanked" consumers would face challenges getting health insurance if the federal government didn't address the problem.

The rule also would allow a state to operate a state-based, small-business health options program (SHOP) while HHS would run the state's individual market federally facilitated exchange. CMS will publish the proposed rule in the June 19 Federal Register and the public will have 30 days to comment.

Friday, June 14, 2013

Medicare Advantage Plan Enrollment Hits Record High

In 2013, there are currently 14.4 million Medicare beneficiaries enrolled in Medicare Advantage. This is an increase of more than one million (9.7%) from 2012 and sets a record high for enrollees. Even though there were concerns that payment changes from the Affordable Care Act of 2010 (ACA) would lead to fewer enrollments, it has seen an increase of 30% since 2010. About 28% of Medicare beneficiaries are enrolled in Medicare Advantage plans today and there is very little evidence of an adverse effect on enrollment in low versus high cost counties as a result of payment rate change in the ACA.

This growth is a continuation of the rapid growth in enrollment that occurred at the same time as the introduction of Part D in 2006. Also, the implementation of other changes to the Medicare Advantage program authorized by the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003. This growth has happened despite the fact that the average number of plans available to enrollees nationwide declined from a high of 48 plans in 2009 to only 20 plans in 2012 and 2013.

With the Annual Enrollment period coming up, be sure to contact me to review the new benefit plans for 2014. I represent all of the popular and widely accepted Medicare Health plans in Washington State.

I also represent carriers that offer Medigap policies that work with original Medicare. Always check with your doctors and other providers to make sure which plans they accept.

Please remember me when talking with your family and friends that need any kind of health insurance including Medicare health plans.

Monday, June 10, 2013

PPACA raises the stake for HSAs

In a sea of rising health care costs, HSAs may be the most useful item in an employer's toolbox.  
In a sea of rising health care costs, HSAs may be the most useful item in an employer's toolbox.
The looming deadlines for implementing many key Patient Protection and Affordable Care Act (PPACA) provisions have many employers and employees wondering how they can cushion the impact of the rising premium costs they fear will accompany them. Some employees have begun to hear rumors of their employers switching to plans with high deductibles — with correspondingly lower premiums for the employer — to avoid the so-called “Cadillac Tax.” Whether you  fear direct premium increases or higher annual deductibles, your out-of-pocket costs can be slashed using a tax-preferred vehicle that has been on the market for years: the health savings account (HSA).

Pre-tax contributions, coupled with tax-free earnings and withdrawals, make HSAs a powerful tool for covering the rising costs of your health coverage. They also have the added bonus of reducing taxable income in the process.

PPACA's impact
Within the next four years, companies will become subject to an excise tax if they offer health care plans that cost more than $10,200 per individual employee or $27,500 for family coverage. This Cadillac Tax has many employers looking for ways to lower the cost of the health care options they currently offer employees, and the solution commonly involves switching over to plans with lower premiums and correspondingly higher deductibles (known as HDHPs).

This means that those who currently have comprehensive health coverage provided at little cost to them will soon be required to pay for more of their health care out-of-pocket before insurance coverage kicks in. Because a $5,000 deductible may soon become common, employees will need an alternate solution to help lessen the burden.

Self-employed and small business owners have similar fears regarding the widespread perception that they’ll see higher premium costs once the health insurance exchanges open late in 2013. These folks are similarly likely to resort to HDHPs to control premium costs though their out-of-pocket costs will rise through the high deductible that must be paid before coverage begins.

HSAs and HDHPs
HSAs were created as a supplement to HDHPs and, as HDHPs become more prevalent, everyone should be made aware of the importance of taking advantage of an HSA to control out-of-pocket health expenses. For 2013 and 2014, an HDHP is a plan with an annual deductible of not less than $1,250 for self-only coverage or $2,500 for family coverage. Annual out-of-pocket expenses in an HDHP cannot exceed $6,350 for self-only coverage in 2014 ($6,250 in 2013) or $12,700 for family coverage ($12,500 for 2013).

To offset the cost of an HDHP, an individual (or his employer) is permitted to contribute $3,300 in pre-tax dollars to an HSA in 2014 ($3,250 in 2013). For family coverage, the limit is increased to $6,550 ($6,450 in 2013). The funds are contributed pre-tax, and they can also be withdrawn tax-free if used to pay for qualified medical expenses (which covers a wide range of expenses, from aspirin to premium costs). Much like a retirement account, earnings on the account value also grow tax-free.

Importantly, the funds in an HSA do not expire from year to year, so you can build up a substantial account balance over the years to help cover the cost of health coverage.

Though the future of HSAs was uncertain when the ACA was originally passed, it has since become clear that these tax-preferred accounts will take center stage as an affordable strategy for funding the higher costs of health care that individuals are likely to see in the coming months and years.

Wednesday, June 5, 2013

Out-of-Network Docs at In-Network Hospitals

I Stayed in My Network….Why Did I Get a Bill?

You’re scheduled for surgery, and you’ve done your homework. You know that your doctor is admitting you to a hospital in your plan’s network. You’ve checked that the surgeon participates, too. Your insurer has pre-authorized the service. You’ve put aside money to cover your co-payment. So, there shouldn’t be any surprises, right?

Even if your hospital participates in your health plan, that doesn’t mean that all the providers working there do, too. If you need surgery, or have a serious illness, there may be several providers involved in your treatment. And each of them may contract separately with insurers.

When you receive treatment in a hospital, be aware that you may get a bill from providers who don't participate in your network, such as:
  • Radiologists
  • Anesthesiologists
  • Pathologists
  • Surgeons assisting your in-network surgeon

What Can I Do?

Your plan may not cover any out-of-network care, leaving you to pay the full cost. Or, they may cover part of the cost, but at a much lower rate than the provider charges. You may have to pay the difference. In that case, you’ll get a “balance bill” from your provider for the difference between your plan’s payment and your provider’s fee.

The best way to try to avoid this situation is to talk to your doctor and your insurer first. Find out if all the providers involved in your care participate in your plan before you schedule your procedure.

While you could try to negotiate after you've already received the bill, out-of-network providers are under no obligation to accept a lower payment.

What about Emergencies?

If you’re in a car accident, suffer a heart attack, or have another emergency, you may not have a choice about where to go for care. You’ll usually be taken to the nearest hospital, which may not participate in your network. And even if it does, some of the ER doctors or consulting specialists who are called in to care for you might not participate in your plan.

Waiting to get care in an emergency can be life-threatening, so most plans cover emergency care no matter where you are – even if the hospital does not participate in your network. Once your condition is stable, you will generally be moved to an in-network facility for follow-up care.

But remember, that only applies to real emergencies. Emergency room visits cost more than regular doctor visits, and insurers often won’t pay certain emergency costs if it’s not a true emergency.  Most plans are required to abide by the “Prudent Layperson Standard” under PPACA, which defines a medical emergency as “A condition with acute symptoms of sufficient severity (including severe pain) that a person who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in—(i) placing the health of the individual (or an unborn child) in serious jeopardy, (ii) serious impairment of bodily functions, or (iii) serious dysfunction of any bodily organ or part."

If your emergency is not life-threatening and you can drive to treatment, try to find an "urgent care" clinic or walk-in clinic. Costs are lower and your insurance may pay better leaving you with less of the bill to pay out of pocket.

If you’re not sure what constitutes an emergency, or what emergency costs are covered, ask your insurer.