MedicareIC, Author at MIC Financial

Sep20

Medicare Math” Changes to 2025 Medicare calculations for prescription drugs

By MedicareIC - blog

Lower out-of-pocket drug costs in 2024 and 2025

Most people with Medicare drug coverage (Part D) don’t reach either the coverage gap phase or the catastrophic coverage phase. However, those who do reach the catastrophic coverage phase in 2024 will get significant savings.
For 2024, the new prescription drug law places a cap on annual out-of-pocket costs on Part D drugs if you reach the catastrophic coverage phase, which begins at a threshold of $8,000 in what’s called true out-of-pocket (TrOOP) costs. For most people, you’ll contribute roughly between $3,300 and $3,800 toward the cap of $8,000, and then pay $0 for your covered Part D drugs for the rest of the year.
Previously, if you had Medicare Part D drug coverage and reached the catastrophic coverage phase, you continued to pay 5% of your drug costs for the rest of the year. Now you’ll save, on average, hundreds of dollars in copayments in 2024.
In 2025, you’ll pay no more than $2,000 in out-of-pocket costs.

The catastrophic phase of the Medicare drug coverage benefit in 2024

Medicare drug coverage has 4 phases in 2024—the deductible, initial coverage, coverage gap, and catastrophic coverage. The phase you’re in depends on your drug spending, drug types (brand name versus generic), and your plan’s benefit design.¹
Your TrOOP costs include your own out-of-pocket payments, plus other payments for your covered drugs that certain people or organizations make for you (like Medicare’s Extra Help program or manufacturer payments for brand name drugs as part of the Medicare Coverage Gap Discount Program). How quickly you enter the catastrophic coverage phase depends on your specific mix of brand name and generic drugs.

Your estimated out-of-pocket costs if your TrOOP costs reach $8,000 in 2024 (and enter the catastrophic coverage phase)

¹ Progression through the deductible and initial coverage phases are based on total gross covered prescription drug costs, as defined in § 423.308, which refers to spending on covered Part D drugs by people with Part D or on their behalf by any third party as well as the Part D plan. Once total gross covered prescription drug costs for a person with Part D reach the deductible amount under the defined standard benefit, that person transitions into the initial coverage phase. Similarly, when total gross covered prescription drug costs for a person reach the initial coverage limit, that person transitions into the coverage gap. By contrast, progression through the coverage gap is determined by accumulated true out-of-pocket (TrOOP) spending. TrOOP is spending on covered Part D drugs by the person or on his/her behalf by certain third parties (see sections 1860D-2(b)(4)(C)(iii) and (E) of the Social Security Act and the definition of incurred costs in § 423.100), including manufacturer discounts provided as required under the Coverage Gap Discount Program. Once accumulated TrOOP for a person reaches the annual OOP threshold, that person enters the catastrophic coverage phase.

Your exact out-of-pocket contribution to reach $8,000 in TrOOP depends on your plan’s benefit design and the mix of brand name and generic drugs you take. Based on our analysis of total out-of-pocket spending when you reach the catastrophic coverage phase:

Using only brand-name drugs, you’ll have around $3,300 in total out-of-pocket costs.
Using an average amount of generic drugs, you’ll have around $3,400 in total out-of- pocket costs.
Using a higher-than-average amount of generic drugs, you’ll have total out-of-pocket costs of approximately $3,800.
Using only high-cost generic drugs, your total out-of-pocket costs are approximately $8,000 because you didn’t take any brand name drugs (which a manufacturer would make discount payments for under the Medicare Coverage Gap Discount Program). Less than 1% of people with Medicare drug coverage who reach the catastrophic coverage phase use only generic drugs.

Note: People taking insulin are unlikely to reach the catastrophic coverage phase due to insulin costs, because the new prescription drug law capped cost sharing for insulin at $35 per month’s supply per covered insulin product.

Below are examples of what your maximum out-of-pocket spending could look like depending on your mix of brand name and generic drugs.

Examples of out-of-pocket spending if you reach the catastrophic coverage phase in 2024

Whether you’re taking only brand-name drugs or a mix of brand-name and generic drugs, most people who reach the catastrophic coverage phase in 2024 will pay between $3,300 and $3,800 in out-of-pocket costs.

1. Mr. Alvarez takes 100% brand-name drugs, including high-cost drugs

In 2024, Mr. Alvarez takes $200,000 in Medicare Part D covered brand-name drugs. He pays $1,666 in out-of-pocket costs before reaching the coverage gap phase. He’s responsible for paying 25% of drug costs in the coverage gap phase. For brand-name drugs, both the amount he pays and the amount the manufacturer pays in coverage gap discounts count towards his TrOOP. When Mr. Alvarez reaches the catastrophic coverage phase (when his TrOOP = $8,000), his total out-of-pocket spending that he pays himself will be approximately $3,300 — manufacturer discounts paid $4,700, to reach a total of $8,000 in TrOOP spending.

How things changed:

In 2023, once Mr. Alvarez reached the catastrophic coverage phase, he continued to pay 5% of his drug costs for the rest of the year. His total out-of-pocket costs for 2023 would have been approximately $12,000.
In 2024, once Mr. Alvarez’s TrOOP equals $8,000, he’ll pay $0 in out-of-pocket costs for the rest of the year. Based on the drugs he takes, his total out-of-pocket costs for 2024 will be approximately $3,300, a savings of around $8,700.

2. Mrs. Smith takes a mix of brand-name and generic drugs

In 2024, Mrs. Smith takes a mix of Medicare Part D covered brand-name and generic drugs, with a total annual drug cost of $132,000. She pays $1,666 in out-of-pocket costs before reaching the coverage gap phase. She’s responsible for paying 25% of drug costs in the coverage gap phase. For brand-name drugs, both the amount she pays and the amount the manufacturer pays in coverage gap discounts count towards her TrOOP. However, for generic drugs, only her out-of-pocket spending counts towards her TrOOP. When Mrs. Smith reaches the catastrophic coverage phase (when her TrOOP = $8,000), her total out-of-pocket spending that she pays herself will be approximately $3,800. Manufacturer discounts paid $4,200 for her brand-name drugs, to reach a total of $8,000 in TrOOP spending.

How things changed:

In 2023, once Mrs. Smith reached the catastrophic coverage phase, she continued to pay 5% of her drug costs for the rest of the year. Her total out-of-pocket costs for 2023 would have been approximately $9,000.
In 2024, once Mrs. Smith TrOOP equals $8,000, she’ll pay $0 in out-of-pocket costs for the rest of the year. Based on the drugs she takes, her total out-of-pocket costs for 2024 will be approximately $3,800, a savings of around $5,200.

Feb19

New book sheds light on how Medicare advantage plans really work.

By MedicareIC - Uncategorized

Click here to view the book on Amazon.

Jan9

Older Americans say they feel trapped in Medicare Advantage plans

By MedicareIC - Uncategorized

Source: https://fortune.com/well/2024/01/06/older-americans-say-they-feel-trapped-in-medicare-advantage-plans/

In 2016, Richard Timmins went to a free informational seminar to learn more about Medicare coverage.

“I listened to the insurance agent and, basically, he really promoted Medicare Advantage,” Timmins said. The agent described less expensive and broader coverage offered by the plans, which are funded largely by the government but administered by private insurance companies.

For Timmins, who is now 76, it made economic sense then to sign up. And his decision was great, for a while.

Then, three years ago, he noticed a lesion on his right earlobe.

“I have a family history of melanoma. And so, I was kind of tuned in to that and thinking about that,” Timmins said of the growth, which doctors later diagnosed as malignant melanoma. “It started to grow and started to become rather painful.”

Timmins, though, discovered that his enrollment in a Premera Blue Cross Medicare Advantage plan would mean a limited network of doctors and the potential need for preapproval, or prior authorization, from the insurer before getting care. The experience, he said, made getting care more difficult, and now he wants to switch back to traditional, government-administered Medicare.

But he can’t. And he’s not alone.

“I have very little control over my actual medical care,” he said, adding that he now advises friends not to sign up for the private plans. “I think that people are not understanding what Medicare Advantage is all about.”

Enrollment in Medicare Advantage plans has grown substantially in the past few decades, enticing more than half of all eligible people, primarily those 65 or older, with low premium costs and perks like dental and vision insurance. And as the private plans’ share of the Medicare patient pie has ballooned to 30.8 million people, so too have concerns about the insurers’ aggressive sales tactics and misleading coverage claims.

Enrollees, like Timmins, who sign on when they are healthy can find themselves trapped as they grow older and sicker.

“It’s one of those things that people might like them on the front end because of their low to zero premiums and if they are getting a couple of these extra benefits — the vision, dental, that kind of thing,” said Christine Huberty, a lead benefit specialist supervising attorney for the Greater Wisconsin Agency on Aging Resources.

“But it’s when they actually need to use it for these bigger issues,” Huberty said, “that’s when people realize, ‘Oh no, this isn’t going to help me at all.’”

Medicare pays private insurers a fixed amount per Medicare Advantage enrollee and in many cases also pays out bonuses, which the insurers can use to provide supplemental benefits. Huberty said those extra benefits work as an incentive to “get people to join the plan” but that the plans then “restrict the access to so many services and coverage for the bigger stuff.”

David Meyers, assistant professor of health services, policy, and practice at the Brown University School of Public Health, analyzed a decade of Medicare Advantage enrollment and found that about 50% of beneficiaries — rural and urban — left their contract by the end of five years. Most of those enrollees switched to another Medicare Advantage plan rather than traditional Medicare.

In the study, Meyers and his co-authors muse that switching plans could be a positive sign of a free marketplace but that it could also signal “unmeasured discontent” with Medicare Advantage.

“The problem is that once you get into Medicare Advantage, if you have a couple of chronic conditions and you want to leave Medicare Advantage, even if Medicare Advantage isn’t meeting your needs, you might not have any ability to switch back to traditional Medicare,” Meyers said.

Traditional Medicare can be too expensive for beneficiaries switching back from Medicare Advantage, he said. In traditional Medicare, enrollees pay a monthly premium and, after reaching a deductible, in most cases are expected to pay 20% of the cost of each nonhospital service or item they use. And there is no limit on how much an enrollee may have to pay as part of that 20% coinsurance if they end up using a lot of care, Meyers said.

To limit what they spend out-of-pocket, traditional Medicare enrollees typically sign up for supplemental insurance, such as employer coverage or a private Medigap policy. If they are low-income, Medicaid may provide that supplemental coverage.

But, Meyers said, there’s a catch: While beneficiaries who enrolled first in traditional Medicare are guaranteed to qualify for a Medigap policy without pricing based on their medical history, Medigap insurers can deny coverage to beneficiaries transferring from Medicare Advantage plans or base their prices on medical underwriting.

Only four states — Connecticut, Maine, Massachusetts, and New York — prohibit insurers from denying a Medigap policy if the enrollee has preexisting conditions such as diabetes or heart disease.

Paul Ginsburg is a former commissioner on the Medicare Payment Advisory Commission, also known as MedPAC. It’s a legislative branch agency that advises Congress on the Medicare program. He said the inability of enrollees to easily switch between Medicare Advantage and traditional Medicare during open enrollment periods is “a real concern in our system; it shouldn’t be that way.”

The federal government offers specific enrollment periods every year for switching plans. During Medicare’s open enrollment period, from Oct. 15 to Dec. 7, enrollees can switch out of their private plans to traditional, government-administered Medicare.

Medicare Advantage enrollees can also switch plans or transfer to traditional Medicare during another open enrollment period, from Jan. 1 to March 31.

“There are a lot of people that say, ‘Hey, I’d love to come back, but I can’t get Medigap anymore, or I’ll have to just pay a lot more,’” said Ginsburg, who is now a professor of health policy at the University of Southern California.

Timmins is one of those people. The retired veterinarian lives in a rural community on Whidbey Island just north of Seattle. It’s a rugged, idyllic landscape and a popular place for second homes, hiking, and the arts. But it’s also a bit remote.

While it’s typically harder to find doctors in rural areas, Timmins said he believes his Premera Blue Cross plan made it more challenging to get care for a variety of reasons, including the difficulty of finding and getting in to see specialists.

Nearly half of Medicare Advantage plan directories contained inaccurate information on what providers were available, according to the most recent federal review. Beginning in 2024, new or expanding Medicare Advantage plans must demonstrate compliance with federal network expectations or their applications could be denied.

Amanda Lansford, a Premera Blue Cross spokesperson, declined to comment on Timmins’ case. She said the plan meets federal network adequacy requirements as well as travel time and distance standards “to ensure members are not experiencing undue burdens when seeking care.”

Traditional Medicare allows beneficiaries to go to nearly any doctor or hospital in the U.S., and in most cases enrollees do not need approval to get services.

Timmins, who recently finished immunotherapy, said he doesn’t think he would be approved for a Medigap policy, “because of my health issue.” And if he were to get into one, Timmins said, it would likely be too expensive.

For now, Timmins said, he is staying with his Medicare Advantage plan.

“I’m getting older. More stuff is going to happen.”

There is also a chance, Timmins said, that his cancer could resurface: “I’m very aware of my mortality.”

Apr30

Changes to Medicare in 2018

By MedicareIC - blog

There are a few changes that have happened in 2018 to Medicare. It is important to understand how they may impact you, now and going forward. Below is a great article by Forbes that highlights all of the changes:

Article Written By

David Haass

04/14/2018

So far, 2018 has brought many new changes for Medicare patients. If you’re a Medicare agent or have a Medicare plan, you should be aware of these changes. Here are some of the biggest changes that you will see this year, including information and resources regarding new Medicare cards that will begin to be mailed out in April.

Medicare Part A

Deductibles have increased to $1,340 per benefit period. The deductible for 2017 was $1,316.

Hospital coinsurance has also undergone a $6 per day increase for days 61-90 of hospitalization. Beneficiaries are covered for shared costs for the first 60 days. Beneficiaries in a skilled nursing facility sawan increase in their daily coinsurance for days 21-100 of $3 from 2017. Lifetime reserve days have increased from $658 to $670 per day.

Medicare Part B

The annual deductible for Medicare Part B has stayed the same for 2018, as have the standard premiums. However, there are a few major changes to take note of.

Hold Harmless

Those who are protected by the “hold harmless” provision saw an increase. The hold harmless rule applies if you collect Social Security benefits and your Medicare Part B premium is deducted from those benefits each month. Most Medicare beneficiaries are covered by this.

IRMAA

If you have a higher income and therefore pay the Income Related Monthly Adjustment Amount (IRMAA), you may have also seen your premium increase.

IRMAA works in tiered income patterns. The first two tiers remained the same as far as premium surcharges. However, those who fall into higher tiers may be seeing higher premium surcharges in 2018 as a result of the Medicare Access and CHIP Reauthorization Act (MACRA). The income levels in tiers three through five were changed this year, meaning you may have gone from paying 50% of Part B costs to 65% or even 80%.

Medicare Part D

The Part D deductible for Medicare patients will increase slightly in 2018 from $400 to $405. Beneficiaries should be happy to see a $50 increase in their initial coverage limit for Medicare Part D. The new limit for 2018 is $3750. The out-of-pocket threshold for Medicare in 2018 is $5,000, which is $50 more than in 2017. The maximum copay for 2018 is $3.35 for generic drugs and $8.35 for other drugs.

New Medicare Cards

In order to protect Medicare beneficiaries from medical identity theft, the centers of Medicare & Medicaid Services (CMS) are removing social security numbers from Medicare cards and replacing them with unique Medicare Beneficiary Identifier (MBI) numbers.

Starting in April 2018, the new Medicare cards with MBIs will begin the process of being mailed out in phases by geographic location. This process is expected to be completed by April 2019. Beginning January 1, 2020, only new cards will be usable.

10 Things Medicare Beneficiaries Should Know About Their New Medicare Cards

1. Your card is being mailed out based on geographic location, but your card could arrive at a different time from your neighbor’s.

2. Once you receive your new Medicare card, destroy the old one.

3. Only give your new Medicare card number to people you trust to handle your Medicare on your behalf.

4. Know that your new Medicare number is unique to you.

5. Your new card is paper, so if you ever need a replacement card, you can print one.

6. Always keep your new card with you.

7. Your healthcare facilities and providers will be asking for your new card at your next visit.

8. If you forgot your new card at home, don’t worry. Your healthcare provider or doctor can look it up online.

9. If you’re on Medicare Advantage, your plan ID card is still your main card for Medicare. Make sure to carry your ID card as well as your new Medicare card on you.

10. If you don’t receive your new Medicare card by April 2019, call 1-800-MEDICARE.

How Medicare Agents Can Prepare For New Medicare Cards

While CMS is trying to make the new Medicare card transition as smooth as possible, there are a few steps Medicare agents should take and resources to use to prepare.

1. Prior to April 1, 2018, update your business and system processes so that they can accept the new MBI numbers.

2. Become familiar with the preferred language and termswhen talking about the new Medicare cards.

3. Understand the Medicare Beneficiary Identifier (MBI) format.

4. Add widgets to your website with a link to go.medicare.gov/newcard.

5. Begin social media outreach using the Partner Social Media Toolkit provided by CMS.

6. Download and review the 2018 partner update slides.

Thankfully, CMS has provided many resources for Medicare agencies and agents to use in order to help educate and bring awareness to people with Medicare. Make sure to check CMS partners and employers overview page regarding the new Medicare cards often for new information and resources.

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