Thursday, December 30, 2010

Health Care Advertisements

Health Care Plan Advertisements: Let The Buyer Beware

All around us - on television, on the radio, and on the internet when we’re browsing - there are advertisements for health care plans. Some specifically relate to changes in health care mandated by the new Patient Protection and Affordable Care Act (PPACA), while others are generic advertisements, not new in their message, but only in their graphics. Be wary of these commercials, for no matter how glitzy they may be, their primary purpose is to sell rather than to inform.

In looking into the issue of advertisements, AH Insurance Services reviewed specific promotional materials from Aetna and United Healthcare. We were hoping to encounter easy-to-understand sound bites that would summarize the new benefits mandated by health care reform and explain the impact of these benefits on plan premiums. What do you suppose we found?

Well, we found lots of information - but not all of it clear-cut - and much of the relevant information is buried from the consumer.

Aetna, for example, provides real information about the impacts of PPACA on health insurance plans via their Homepage, but first you must search for “health care reform” and then sort through material provided in a long list of URLs. When it comes to Aetna’s advertisements, it’s difficult to discern what is true from what is mere embellishment without having prior knowledge about health care reform provisions. Aetna’s advertisements promote new benefits as innovative plan features, when in reality these benefits are mandated by PPACA. So even though Aetna makes their plan options sound original, consumers will find them available with every new health plan.

United Healthcare uses advertisements that emphasize consumer satisfaction and security. That’s all fine, but what about explaining the health plan changes and quantifying any extra costs? United Healthcare’s visual pieces, such as the advertisement to the left, emphasize the importance of obtaining a health care plan, and merely give assurance of protection. Radio commercials by United Healthcare, such as those found on United Healthcare's National Advertising website, also emphasize the protection that having health insurance provides, while giving little factual information on new health benefits.

We see on United Healthcare's National Advertising website video advertisements in which consumers give their impressions of the health care they purchased for their small businesses. Once again, these give little information about what the actual benefits and costs are, but they do give four essential tips to purchasing health insurance:

1. Look at the benefits

2. Compare prices

3. Research the quality of service

4. See if your doctors are covered

Do not be lulled by non-informative advertisements containing fantastic consumer reviews. We all pay mind to good testimonials, but it would be foolish to think that insurance companies use a random sample to choose which reviews will be shared with the public. We suggest listening closely to the reviews, and then doing due diligence to confirm their integrity.

Even though a company may include little information in its advertisements, its products are not necessarily inferior. The key is to do your research, either by yourself or with a trusted independent insurance agent. Make sure you weigh the benefits and potential shortcomings of each plan, and compare premiums with several competitors. Sometimes, quoted rates vary substantially between companies, but that may not tell the full story as the company with lower quoted rates might employ much more stringent medical underwriting. Currently, it’s still permissible for health insurance companies to charge a higher premium, impose exclusions for pre-existing conditions, or outright deny adult applicants based on their medical history.

While we didn’t specifically review any of Humana’s advertisements for this post, we should mention that we haven’t noticed any mention in the media yet of the new lower new business premium rates Humana will be rolling out on January 2nd on its Florida “HumanaOne” individual health product. Lower rates - now that’s an expression you don’t hear very often. Perhaps in this case, you heard it from us first!

For a summary of the changes to health care plans mandated by the PPACA, please visit our prior blog posts titled New PPACA Provisions I and New PPACA Provisions II.

Until next year,

Andrew Herman

AH Insurance Services, Inc.

Monday, December 13, 2010

The New Medicare Advantage Disenrollment Period (MADP)


January 1 through February 14

New for 2011, the Open Enrollment Period (OEP) has been replaced with the Medicare Advantage Disenrollment Period (MADP). Medicare beneficiaries can no longer make a switch in their Medicare Advantage plan during this period; however members may disenroll from Medicare Advantage and return to Original Medicare.

Medicare Advantage customers with prescription drug coverage as of the beginning of MADP should take note of the following:
  1. If you are enrolled in a Medicare Advantage plan that includes prescription drug coverage, you may be able to return to Original Medicare (plus any stand-alone drug plan, or none).
  2. If you are enrolled in a Private Fee-for-Service (PFFS) Medicare Advantage plan plus a stand-alone drug plan, you may be able to return to Original Medicare (keeping the same drug plan or dropping it).
  3. If you are enrolled in a Private Fee-for-Service (PFFS) Medicare Advantage plan that includes prescription drug coverage, you may be able to return to Original Medicare (plus any stand-alone drug plan, or none).
If you want to disenroll, the plan must accept your disenrollment request so you can return to Original Medicare; however, Medicare beneficiaries on non-PFFS Medicare Advantage plans will be automatically disenrolled upon their enrollment into a stand-alone drug plan during the MADP.

Please be aware that if you chose to disenroll and you choose not to enroll in a prescription drug plan, you may have a late enrollment penalty if you choose to enroll in a prescription drug plan in the future.

If you disenroll during the MADP, your disenrollment will be effective on the first day of the month following receipt of the disenrollment request.

If your situation doesn't fall into one of the three categories above, please don't hesitate to Contact Us.

Monday, November 29, 2010

Changes to Grandfathered Group Health Care Plans

Group Health Plans Got New Grandfathering Guidelines

On June 17, 2010, the Departments of Health and Human Services, Labor and Treasury (the “Departments”) released interim final regulations relating to the status of grandfathered health plans under the Patient Protection and Affordable Care Act (PPACA). These regulations set forth rules (outlined in a previous blog post) for determining whether or not a plan qualifies as grandfathered, how that status is maintained, and how a grandfathered plan loses the coveted status. One such rule provided that a group health plan would lose its grandfathered status if the plan entered into a new policy, certificate or contract of insurance after March 23, 2010.

Five months later, on November 15, 2010 the Departments issued an amendment generally allowing group health plans to switch insurance companies without forfeiting grandfathered status, as long as the plan is not changed in a manner that violates any of the other rules for maintaining grandfathered status. There are a few major circumstances through which this change protects the health care recipient:

  • An insurer may stop selling a certain type of plan
  • A company may change hands
  • An employer may find a plan offering similar healthcare coverage at a lower cost
  • Insurance carriers are less likely to impose unfair renewal rate increases on group plans that are clinging to their grandfathered plan status
  • Third-party administrators may now be changed for all grandfathered health care plans (including individual)

The November 15th amendment does seem to make the grandfathering process easier and more consumer-friendly. However, it is important to note that this applies to grandfathered group plans only; individual health insurance policyholders who change their insurance carrier still will lose grandfathered status. Also, the amendment isn’t retroactive, as plans that lost grandfathered status between March 23, 2010 and November 15, 2010 cannot regain get their status back.

Is this good? We think so, except for the fact that the Departments chose not to make the amendment retroactive to March 23rd, which in our viewpoint would have been more consistent.

Does this mark the beginning of many changes to PPACA? We think it’s possible, but of course only time will tell.

Until next time,

Andrew Herman

Tuesday, November 9, 2010

Social Security Sets Premiums for 2011

Since there was no increase in Social Security for 2011, Medicare Part B premiums are frozen at the levels Medicare Beneficiaries were paying in 2010. For people who are new to Medicare in 2011, the Part B premium will increase to $115.40/month, a 4.4% increase. There are now three different amounts for Part B premium, dependent upon when the person first enrolled in Medicare Part B:

- 2011 enrollees pay $115.40
- 2010 enrollees pay $110.50
- 2009 and prior enrollees pay $96.40

Starting January 1, 2011, your Part D monthly premium could be higher based on your income. This includes Part D coverage you get from a Prescription Drug Plan (PDP), a Medicare Advantage Prescription Drug (MAPD) plan or a Medicare Cost Plan that includes prescription drug coverage. If your modified adjusted gross income as reported on your IRS return from two years ago is above $85,000 for a single return or $170,000 for a joint return, you will pay an income-related monthly adjustment amount in addition to the plan's stated Part D premium. If you have to pay a higher amount based on your income, Social Security will contact you this month with the specific information.

Also in 2011, the Medicare Part A Deductible increases from $1100/benefit period to $1132/benefit period; and the Medicare Part B Deductible increases from $155/calendar year to $162/calendar year.

If you would like to receive information on 2011 Medicare Health & Drug Plans, please contact us.

Until next time,

Andrew Herman
AH Insurance Services, Inc.

Monday, October 25, 2010

Medicare 2011: The Rules Keep Changing

Part II of a Two-Part Series

Part I of this series explained enrollment period changes impacting Medicare Health & Drug Plans; and in this Part we’ll share changes being made to Medicare Part D drug benefits. For our readers who may not be familiar with Medicare Part D, we’ll start out by providing an overview of the program mechanics.

Medicare Part D drug coverage is available to Medicare Beneficiaries enrolled in Part A and/or Part B. Beneficiaries access this voluntary program through insurance carriers and can get their coverage through a standalone Prescription Drug Plan (PDP) or a Medicare Advantage Prescription Drug (MA-PD) plan (must have both Medicare Parts A and B to enroll in MA-PD).

PDPs and MA-PDs operate on a calendar year basis and provide drug coverage in accordance with the following parameters:

• The plan deductible cannot exceed $310 (many plans have a $0 deductible)

• After the deductible is reached, the Beneficiary is responsible for paying drug co-pays according to the “tier” level of each drug as shown in the plan’s formulary (medicines that don’t appear on the formulary aren’t covered at all)

• When the combined total of the Beneficiary's payments and the insurance company's contributions reaches $2,830, the Beneficiary enters the coverage gap (the infamous “donut hole”)

• While in the coverage gap, the Beneficiary is required to pay for all prescription drugs out-of-pocket

• Once the Beneficiary’s total out-of-pocket drug expenses reach $4,550, the Beneficiary is in the Catastrophic coverage period; and medicines on the formulary are now covered for just small co-payments until the end of the year

So what’s changing in 2011? First, the $2,830 calendar year threshold level to fall into the donut hole increases to $2,840; and second, Medicare beneficiaries will receive a substantial discount on their medicines while in the donut hole (a 50% discount on brand-name drugs and a 7% discount on generics).

The donut hole is filling up.

The Medicare Part D benefit will be further improved over the years, so that the donut hole will gradually fill up. Discounts for both brand-name and generic drugs are scheduled to increase every year until the donut hole is gone for good in 2020.

Click here for more detailed information on the Medicare Part D program.

Monday, October 18, 2010

Medicare 2011: The Rules Keep Changing

Part I of a Two-Part Series

Part I of this series explains the Medicare enrollment period changes that are taking place. In Part II, we will discuss changes coming to Medicare Part D drug benefits for 2011.

Since 2006, there have been an Annual Election Period (AEP) and an Open Enrollment Period (OEP) for each year, during which Medicare beneficiaries may change their Medicare coverage. During the Annual Election Period, a beneficiary could enroll into or dis-enroll from Medicare Advantage and Medicare Part D plans for the upcoming year (starting January 1), no matter what type of Medicare coverage the beneficiary had the preceding year.

For example, during AEP (11/15 – 12/31) a Medicare beneficiary could enroll in the Part D program for the first time; or a beneficiary on Medicare Advantage could sign up with a new insurance carrier. One could make as many changes as desired during AEP, and the last plan enrollment (signed and dated by December 31st) would be the one to take effect in the new year.

The OEP has been the first three months of each calendar year, during which time Medicare beneficiaries were allowed to make one plan change. These changes had to be “like-for-like” with respect to having Part D drug benefits (i.e., the status of having or not having Part D benefits, either on a standalone basis or as part of a Medicare Advantage plan, became locked in on January 1st). Despite the restriction, many people took advantage of the opportunity to switch their Medicare Advantage plan or return to original Medicare during the OEP.

For 2011 enrollments, the AEP rules remain the same but the OEP has been eliminated. OEP has been eliminated and replaced with the Annual Disenrollment Period (ADP) that will run from January 1st through February 14th. During the new ADP, one can still opt out of Medicare Advantage in favor of original Medicare; however ADP does not allow a switch in Medicare Advantage plans, nor does it allow someone in the original Medicare program to enroll into a Medicare Advantage plan. Beneficiaries dis-enrolling from a Medicare Advantage plan will get a special enrollment period (SEP) to join a standalone Part D plan.

Since there is no longer any OEP, it is especially important that Medicare beneficiaries make the best possible decision on their 2011 coverage during this year’s AEP, which as in the past runs from November 15th through December 31st.

Anyone wanting a head start on 2012 Medicare enrollments should take note that the AEP will start earlier beginning in the fall of 2011! Instead of running the last six weeks of the calendar year, future AEPs are scheduled to take place between October 15th and December 7th. Enrollments will take effect on January 1st as always.