Medicare Watch

Differentiating Between Consolidation and Termination

There has been a lot of confusion recently about the difference between plans that have been consolidated and those that have been terminated.

Plans were consolidated this year to simplify and move towards a more standardized Medicare market. In past years, some insurance companies offered multiple Medicare health and prescription drug plans that had very few differences in benefits. According to several reports, including one issued jointly by the Medicare Rights Center and California Health Advocates, the high number of plans from which Medicare consumers could choose made it difficult for them to choose one that provided the best coverage at the best cost, and many consumers had higher out-of-pocket expenditures than necessary.

At the urging of Medicare consumer advocates, the Centers for Medicare & Medicaid Services (CMS) examined plan bids more carefully this year to ensure that consumers would be able to choose from plan sponsors’ products that have “meaningful differences.” CMS required plan sponsors that offered duplicative plans to consolidate—or combine—them together.

Medicare consumers who are in plans that are subject to consolidation will be automatically “cross-walked”—that is, enrolled in a plan offered by the same sponsor that has essentially the same benefits as their current plan. They will be notified of the consolidation and cross-walking in their Annual Notice of Change (ANOC) provided by their plan sponsor, which they should receive by October 31.

A plan that is terminated is one that ends its contract with CMS and no longer participates in the Medicare program. In this case, Medicare consumers should have received a letter in early October that notified them that their Medicare Advantage or prescription drug plan is terminating and that they must choose a new plan; the letter also informs them of their special enrollment rights.

Whether a plan is consolidated or terminated, it is important that people with Medicare examine their plan choices for 2011, because there are fluctuations in plan costs every year.

Read the letter of support signed by Medicare Rights Center and other Medicare consumer advocacy organizations supporting CMS’s new “meaningful difference” policy.

Read Medicare Rights Center’s 2008 Transition Memo to the Incoming Administration on plan standardization.

Read the 2007 report by Medicare Rights Center and California Health Advocates.

SSA Confirms No COLA in 2011

On October 15, 2010, the Social Security Administration (SSA) confirmed there will be no cost-of-living adjustment (COLA) for 2011.

Although Medicare has yet to release Part B premium information for 2011, 70 percent of people with Medicare will be protected from increases in Part B premiums by the “hold harmless” provision of the Social Security Act. In order to lessen the financial impact of rising Part B premiums on people with Medicare, the provision ensures that the increase in the Part B premium cannot exceed the COLA for a given year. Since there is no COLA for 2011, Medicare consumers who have their premiums directly deducted from their Social Security checks will pay the same Part B premium in 2011 as they pay in 2010. People with Medicare Savings Programs (MSPs), who are not protected by the hold harmless provision, will not see a decrease in their Social Security checks as a result of increased 2011 premiums. Instead, states, which are responsible for paying the premium for people with MSPs, will be required to pay the higher amount.

Others who are not protected by the hold harmless provision include people who will be new to Medicare in 2011 as well as people with incomes above 85,0000 and couples with incomes above 170,000 who are subject to income-adjusted premiums.

Read the Social Security Administration’s press release on COLA for 2011.

Read more about COLA.

Medicare Reminder

No matter how your drug plan is changing in 2011, it is very important that you review all of your options. Medicare private drug plans can change their costs and the list of drugs that they cover every year.

Most people can change Medicare drug plans only during Fall Open Enrollment (sometimes called the Annual Coordinated Election Period – ACEP), which runs from November 15 to December 31 in 2010.

Even if you are satisfied with your current plan, you should check to see if there is another plan in your area that offers better coverage at a lower price.

Learn more about reviewing and changing your drug plan.

Find answers to your Medicare questions at www.MedicareInteractive.org.

Spotlight

Earlier this week, we debuted a video that describes our work to get Medicare right. The video follows one issue (the Part D “doughnut hole”) as it travels through the various departments at Medicare Rights and, ultimately, results in positive change.

Watch the video.