October 12, 2012

Key Take-Aways

• Open Enrollment for Medicare Advantage and Medicare Part D begins Monday.
• Physicians are already cutting back on Medicare patients, due to insufficient Medicare reimbursement and increased regulatory burdens. The looming physician shortage coupled with additional pressures from the president’s health care law will only compound this problem.
• Without Congressional action, Medicare will become insolvent in 2024; the House Republican Budget is the only plan that ensures Medicare will remain intact for current and future retirees.

Medicare Open Enrollment begins Monday, October 15. The following may be helpful as you address constituent concerns during this period.

The Basics

Seniors who already receive Social Security benefits are automatically enrolled in Medicare Parts A and B starting the first day of the month in which they turn 65. Part B is typically voluntary and seniors must pay monthly premiums to participate. Together, Parts A and B comprise “Original Medicare.” Seniors can decide whether they want to participate in the Original Medicare fee-for-service program, with or without prescription drug coverage (Part D), or if they want coverage through a private plan, known as Medicare Advantage (MA, or Part C). MA plans frequently include prescription drug coverage. Each fall, seniors have the opportunity to enroll in MA, choose a different MA plan, or leave the MA program and go back to Original Medicare. They can also enroll in Part D or choose a different Part D plan if they are not enrolled in MA. For more information on delayed enrollment, what services Parts A and B cover, Medigap policies, how Medicare works, and additional resources, please see the 2013 official U.S. government Medicare handbook. For more information on what’s changing for 2013, click here.

Open Enrollment lasts from October 15 to December 7, 2012. Coverage will begin January 1, 2013. Seniors who are unhappy with their MA plan choice can drop the plan and switch to Original Medicare between January 1 and February 14, 2013, but they cannot switch from one MA plan to another during this time. Seniors enrolled in Original Medicare or an MA plan with a lower quality rating can enroll in a MA plan with a 5-star quality rating from December 8, 2012 through November 30, 2013.   

Medicare Advantage

Today, about 27 percent of Medicare beneficiaries (13 million seniors) are currently enrolled in MA plans. Unlike Original Medicare, MA plans are required to cap their members’ annual out-of-pocket expenses, protecting beneficiaries from catastrophic health care costs; they may also provide dental or vision coverage. MA plans often provide case management, disease management, nurse help hotlines, and greater coordination of care.

HHS recently announced that MA enrollment is projected to increase by 11 percent in 2013 and premiums are expected to remain steady despite the $300 billion in cuts affecting seniors in MA in the president’s health care law. To date, only 4 percent of MA cuts have gone into effect, and less than 10 percent of the cuts will go into effect through 2013. The cuts are further masked by the $8 billion MA demonstration program which was intended to reward only high-quality MA plans, but ultimately went to plans covering the majority of seniors. The cuts are still projected to cause MA enrollment to decline to 10.7 million in 2019.

Medicare Part D

Despite HHS’ announcement that average basic premiums for Medicare prescription drug plans were projected to remain constant in 2013, an Avalere Health study shows that premiums for many of the most popular plans will increase by double-digits. "Even if you are happy with your coverage, some of the prices may be going up," said Juliette Cubanski, a Medicare policy analyst at the Kaiser Family Foundation.

Be an Informed Consumer

It is important for current Medicare beneficiaries to review their plans annually. Seniors should evaluate their health status, their current plan’s benefit (which services are covered, how they are covered, copays, deductibles, etc.) changes, network changes and premium increases. Informed consumers are more likely to pay less and be more satisfied with their coverage.

According to a recent Health Affairs study, the vast majority of Medicare Part D beneficiaries still do not choose the cheapest plans that meet their medication needs. Beneficiaries often overprotect themselves by paying higher premiums for plan features that they do not need; more than a fifth of beneficiaries spent at least $500 more than necessary in 2009. The 2012 National Survey of Seniors found that 73 percent of seniors are aware of the open enrollment period and nearly 6 in 10 seniors report that they review and compare their Medicare coverage options annually. Seniors enrolled in MA plans are more likely to review and compare plans annually. According to the study, “to the extent that many seniors say they are aware of the open enrollment period and participate annually in the process of comparing plans, shifting Medicare to a new system, one that relied on seniors choosing plans and being responsive to price competition among plans, would not be unfamiliar ground to many of today’s seniors.”

A Choice of Two Futures

Without Congressional action, Medicare will become insolvent in 2024. The 2012 Physicians Foundation Study found thatover 59 percent of physicians indicate passage of the Affordable Care Act has made them less positive about the future of healthcare in America. “Over half of physicians surveyed have reached a tipping point and plan to make changes to their practices. Many intend to take one or more steps likely to reduce patient access to their services, limiting physician availability at a time when doctors already are in short supply.” Over 52 percent of physicians have limited the access Medicare patients have to their practices or are planning to do so; more than 70 percent of physicians believe less government regulation would be a positive solution to the health system’s cost and access challenges. The House Republican Budget is the only plan that ensures Medicare remains intact for current and future retirees and puts patients in control over their care.

Staff Contact: For questions or further information contact Lisa Collins at 5-2045.