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Medicare Private Health Plan Benefits
March 19, 2009 • Volume 9, Issue 11
Insurance companies design their benefit packages for Medicare private health plans with an eye toward marketing to consumers who will be profitable to enroll. Free gym membership can attract healthy, low-cost enrollees. Better coverage of expensive chemotherapy medicines will not.
That dynamic is the reason why Congress gave the Centers for Medicare & Medicaid Services (CMS) the authority to prohibit companies from designing benefit packages that discriminate against consumers who are in poor health and need expensive medical care
At the end of this month, the Obama administration will publish the final 2010 Call Letter, which will lay out guidelines for Medicare private health plan benefit designs and set contract terms for next year. Based on the draft Call Letter released in February, 2010 could be the first year that these guidelines provide real protection to people with Medicare. If the guidelines are effective, we should see the following in 2010:
All, or nearly all, Medicare private health plans will have a comprehensive annual out-of-pocket limit of $3,400 or less for Medicare-covered medical services.
CMS is proposing that any plan that makes enrollees pay a percentage of the cost of services—20 percent of chemotherapy, for example—have such an out-of-pocket cap to limit the financial burden of high-cost treatment. We believe such an out-of-pocket limit should apply even when there are flat copays for all services; such copays can add up when treatment requires frequent visits to the doctor or a lengthy stay in a skilled nursing facility.
Plans will no longer be allowed to carve out certain services, such as doctor visits or wheelchair coverage, from the out-of-pocket limit and thereby gut the financial protection it offers.
CMS recognizes that prohibiting plans from hiding such loopholes in their coverage provides crucial protection for consumers. It would be even stronger if the out-of-pocket limit were set lower. Having to pay $3,400 in medical copays, on top of the copays for Part D drugs, is still too much for many people with Medicare who have limited incomes.
Plans will no longer be able to charge more than Original Medicare for kidney dialysis, chemotherapy and other Part B drugs, and care in skilled nursing facilities or psychiatric hospitals.
CMS has made a good start with that list of services, but plans should also be barred from charging more than Original Medicare for home health care and durable medical equipment, such as wheelchairs and hospital care.
Do these rules mean that enrollees in Medicare private health plans will no longer get free gym membership? No. But they do mean that all people with Medicare, including those with high-cost illnesses, will have a minimum level of protection in any Medicare private health plan.
Are you paying a lot for medical care that you need? We would like to hear from you about your out-of-pocket spending and how these expenses have affected you. Please consider sharing your story with us.
“CMS’ goal is to establish a more transparent process so that beneficiaries will be able to better predict their [out-of-pocket] costs in order to select a plan that best meets their individual health care needs and be protected from excessively high or unexpected cost sharing,” (2010 Draft Call Letter, Centers for Medicare & Medicaid Services, February 2009)
“The strongest case for standardized benefit packages is plans that carve out specific services, such as Part B drugs, from their caps on catastrophic spending. These carve-outs are unjustifiable, and it is unrealistic to expect consumers to discover which services are or are not included under the cap or anticipate their need for specific services in the future. . . . Caps on out-of-pocket spending should be comprehensive, providing blanket insurance that plan enrollees will not be bankrupted by catastrophic illnesses.” (Informed Choice: The Case for Standardizing and Simplifying Medicare Private Health Plans, Medicare Rights Center and California Health Advocates, September 2007)
“Plans provide enhanced benefits to enrollees and overwhelmingly these benefits are not financed out of plan efficiency but rather by the Medicare program and other beneficiaries, and at a high cost. For example, each dollar’s worth of enhanced benefits in a [private fee-for-service] (PFFS) plan costs the Medicare program over three dollars.” (Testimony before the House Ways and Means Subcommittee on Health, Glenn Hackbarth, Medicare Payment Advisory Commission Chairman, March 2009)
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Medicare Part D Appeals Help for Advocates Is Here!
Medicare Rights Center’s new Medicare Part D Appeals: An advocate’s manual to navigating the Medicare private drug plan appeals process offers an easy-to-understand, comprehensive overview of the entire appeals process, including real-life case examples, a glossary of important appeals terms, a sample protocol for advocates, and links to important resources.
Register for a FREE copy of this great resource.
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Medicare Part D Monitoring Project
would like to hear about your experience, or that of someone you know, enrolled in a private drug plan. With information about what the issues are with Medicare Part D, we will be able to demand that those problems be fixed. Medicare Rights Center
Submit your story at http://www.medicarerights.org/issues-actions/tell-your-story.php.
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The Louder Our Voice, the Stronger Our Message
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Asclepios—named for the Greek and Roman god of medicine who, acclaimed for his healing abilities, was at one point the most worshipped god in Greece—is a weekly e-newsletter designed to keep you up-to-date with Medicare program and policy issues, and advance advocacy strategies to address them. Please help build awareness of key Medicare consumer issues by forwarding this action alert to your friends and encouraging them to subscribe today.
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The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.
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