The world of Medicare is convoluted and hard to navigate. Even if you can keep each plan straight, how do you know which one is the best one for the senior you care for?
Recent changes in health care legislation have only served to add to the confusion.
We discussed some of these recent changes with Ross Blair, chief executive officer of PlanPrescriber, which offers people help in finding the best Medicare benefit plan. Here's his take on what these changes might mean for the elderly and their caregivers.
Q: What exactly do you do for the elderly?
A: At PlanPrescriber, we have a database of every Medicare Advantage prescription drug plan, and most all of the Medicare Supplement plans that are available nationwide. We offer a comparison platform so that people can find the plan that fits their needs. We also run several call centers.
Q: How will the new healthcare reform plan affect caregivers and the elderly?
There really hasn't been a huge impact from healthcare reform so far [except for closing Medicare Part D's] "donut hole."
Medicare Part D is the drug benefit that sometimes comes as part of the Medicare Advantage plan or, it can be bought as a stand-alone prescription drug plan.
The drug coverage has four different levels…The first coverage level is a possible deductible level…and that's usually $250, nothing huge…
The next is the initial coverage period where you generally get pretty aggressive coverage from most companies, depending on which drugs they will offer coverage on.
[But] once your expenses get to be $2,840, you encounter the donut hole, sometimes called the coverage gap. It occurs when your total expenses for drugs; copays plus expenses; what the insurance company pays; and what you pay, exceeds $2,840. That continues until your total drug expense exceeds $4,550. [You're] completely responsible for all expenses between [these two figures].
Now healthcare reform is--and there's such an upheaval over this—[partly about] closing the donut hole.
This year for instance, there's a 50% discount on branded drugs when you're in the donut hole, and a 7% discount on generic. Those discounts continue to increase over the next seven years, until, eventually, the donut hole is phased out altogether.
Q: What do you think about healthcare reform?
A: It's great to hear that the government's doing some things with healthcare reform and it really will benefit seniors… the Part D benefit has gotten stronger as a result of health care reform.
The other big, positive thing that happened as a result of healthcare reform is that Medicare A and B now cover some very important things 100% [such as] a wellness visit, and all of the regular things that seniors should do for screenings, things like mammograms, colorectal exams and the like.
[In the past] very few seniors took advantage of these, because there's typically been a 20% to 25% copay.
Q: Can caregivers also take advantage of this benefit?
A: You have to be enrolled in Medicare, [however] you can be enrolled prior to turning 65 years old if you have a disability.
Q: What else should seniors know about Medicare benefits?
A: The statistics on Medicare Part D are impressive…when somebody signs up, they generally will increase their consumption of prescription drugs by 50%. And they reduce their [out-of-pocket] cost by about 50% at the same
Of course what that means is they're no longer taking their Lipitor every other day, they're taking it every day like they should be. [Adherence is] important to good health outcomes.
Q: Are there any downsides to the new health care legislation?
A: There are three types of Medicare insurance plans. Medicare Advantage and Medicare Part D are both subsidized by the government. Medicare Supplement plans are not.
A good chunk of the cost for the reform was supposed to come out of the cuts to the reimbursements that the government offers to the carriers of the Medicare Advantage Plans in particular.
Now that was supposed to start to happen this year and it has not. In fact, the subsidies were increased this year and are scheduled to be increased again next year…if the subsidies get cut that will mean either increased premiums or reduced benefits for people in Medicare Advantage plans or those who are considering them.
So we're all a bit nervous about that, but so far, so good.
I think it's a politically unpopular position for the Administration to get into, to be cutting benefits to Medicare, but it was over 60% of the way Obama planned to finance healthcare reform—through cuts to Medicare Advantage plans.
The money has been appropriated and is being paid to the companies this year, when in fact the cuts were originally scheduled to happen next year.
Healthcare reform is interesting. [Congress] passed this legislation which, despite the length of the bill, was very loosely written to give lawmakers the ability to decide when to make these cuts…Healthcare reform will have a much larger impact on those that are under 65 than those people that are on Medicare.
Q: There is some talk of Medicare being privatized. Should it happen, how would this change the way the game is played?
A: The Republican side has proposed that, "Why don't we just give everybody an allotment for insurance?"
Of course, that would shift things more in the direction of Medicare Advantage and Medicare Supplement plans and really put the money in the hands of the consumer.
I think this would help make consumers more aware—it would depend on the ability of the consumer to do comparisons and be smart shoppers in order to lower their costs. I think there are some good elements to that.
But you worry a lot about seniors on a fixed income that might not have the money to spend on health insurance taking the allotment and spending it on things other than insurance that they need. So there are some pros and cons, I think, to that plan.
Today, my feeling is that Medicare is a very, very strong program for seniors—something that they can all get an enormous benefit out of and something that they all have obviously paid in for a lifetime of employment..
You probably saw the article in The Wall Street Journal, saying that 30% of companies were not going to pay for health insurance anymore and that's certainly an unintended consequence of healthcare reform. It's a very complex supply chain involved and you have to be very, very careful when you make major changes so you don't have any unintended outcomes.
Q: Anything else we should know?
A: [We find] that most seniors are in the wrong Medicare plan.
Some 90% of people can save money by switching plans, yet only 5% to 7% of seniors switch each year. So there's a lot of inertia in the system. I think people get daunted by the complexity, and of course one of the downsides of complexity is that people don't make any decision at all when they're faced with too many options… when you get too many, people have trouble getting through the decision process and often will do nothing, which is the worst outcome of all.
So, I encourage people to try and work through the complexity; seek out expert help; really understand all of their options; and try to make the most educated decision they can.
Medicare Advantage plans do offer an out of pocket max of $6,700 a year, which is very, very strong compared to basic Medicare, which has no out of pocket maximum limit. So, if they take care to make sure that their doctors are in network and so forth, there are a lot of Medicare Advantage Plans that have no premium whatsoever.
So, there are really good benefits with these plans. I just encourage people to work through the complexity and find a plan that really meets their needs.