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Medicares New Alphabet Soup Mmm Good? The Beneficiarys Perspective -- Families USA Conference -- January 26, 2007 Presenter: David Lipschutz California.

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Presentation on theme: "Medicares New Alphabet Soup Mmm Good? The Beneficiarys Perspective -- Families USA Conference -- January 26, 2007 Presenter: David Lipschutz California."— Presentation transcript:

1 Medicares New Alphabet Soup Mmm Good? The Beneficiarys Perspective -- Families USA Conference -- January 26, 2007 Presenter: David Lipschutz California Health Advocates

2 2 Outline I.Benefits & Drawbacks of Medicare Health Plans (Overview) II.Medicare Modernization Act (MMA) III.Types of Medicare Advantage Plans IV.Marketing of Medicare Advantage Plans

3 California Health Advocates 3 I.Benefits & Drawbacks of Medicare Health Plans (Overview)

4 California Health Advocates 4 Benefits of Medicare Health Plans Medicare HMOs, until recently, were only real option for most Medicare beneficiaries Beneficiaries drawn to plans because generally lower out-of-pocket costs than original Medicare, and often additional benefits E.g. limited prescription drug coverage prior to Part D

5 California Health Advocates 5 Drawbacks of Medicare Health Plans Choice of providers often limited – health plans generally have networks of contracting providers members locked-in to plan network In HMOs, often a primary care physician acts as a gatekeeper to specialists and other services

6 California Health Advocates 6 II. Medicare Modernization Act (MMA)

7 California Health Advocates 7 Medicare Modernization Act The Medicare Modernization Act (MMA) increased incentives for insurance companies to offer plans As a result, the types of plans and numbers of plans increased greatly At the same time, rules restricting individuals rights to enroll in, switch, or disenroll from plans went into effect

8 California Health Advocates 8 Basics – PDP v. MA-PD Stand alone prescription drug plans (PDP) Coordinate with Original Medicare, and some Medicare Advantage plans (see below) Medicare Advantage (MA) Enrollees generally obtain all Medicare- covered care through private plan MA plan that does not offer Part D coverage (MA or MA-only) MA plan that offers Part D coverage (MA-PD)

9 California Health Advocates 9 III. Types of Medicare Advantage Plans

10 California Health Advocates 10 Medicare Advantage Plans 3 Types of MA plans: Coordinated Care Plans (HMOs, PPOs, SNPs) Private Fee-for-Service (PFFS) Plans Medicare Medical Savings Accounts (MSAs)

11 California Health Advocates 11 MA Plans and Other Part D Coverage Individuals enrolled in an MA coordinated care plan (HMO, PPO, SNP) cannot also be enrolled in a PDP, even if MA plan does not provide Part D coverage PFFS enrollees – if plan does not offer Part D coverage, can enroll in a PDP MSAs cannot offer Part D coverage, so enrollees can also enroll in a PDP

12 California Health Advocates 12 Health Maintenance Organizations (HMOs) For many years, the only real option through Medicare Advantage (formerly Medicare+Choice) Well entrenched in certain parts of CA Network of contracting providers, generally lower cost-sharing than Original Medicare, some additional benefits

13 California Health Advocates 13 Preferred Provider Organizations (PPOs) Preferred Provider Organization (PPO) is a plan that has a network of providers who have agreed to a specific payment rate for covered benefits with the plan Plan provides for all covered benefits regardless of whether the benefits are provided within the network of providers CA – limited enrollment, experience with these plans Problems primarily with people who were not aware of high deductible and those who sought a different type of plan (e.g. Medigap) from same sponsor

14 California Health Advocates 14 Special Needs Plans (SNPs) A coordinated care plan that exclusively enrolls (or enrolls a disproportionate %) of special needs individuals: Dual eligibles (Medicare and Medi-Cal, possibly MSP) Institutionalized – individual who continuously resides, or who is expected to reside, for 90 days of longer in a long-term care facility (skilled nursing facility (SNF); nursing facility (NF); intermediate care facility for mentally retarded (ICF/MR); or inpatient psychiatric facility; (may also includes those in community but requiring a nursing home level of care) Individuals with chronic or disabling conditions

15 California Health Advocates 15 Special Needs Plans (SNPs) Potential to use specialists, case management, other tailored services to provide better coordinated care Potential to coordinate with state Medicaid coverage not currently required to require their network providers to participate in Medicaid and their network pharmacies to attempt to bill Medicaid when Medicare drug coverage is denied Some of the same restrictions as most other MA plans (e.g. limited networks, referrals, etc.)

16 California Health Advocates 16 Private Fee-for-Service (PFFS) PFFS plans do not limit enrollees to a network of doctors or hospitals; enrollees can go to any Medicare provider as long as provider is willing to accept the PFFS plans fees and terms Care is generally not coordinated Relationship between an individual provider and plan is key factor re: PFFS plans

17 California Health Advocates 17 PFFS Provider Types When a PFFS enrollee obtains services from a provider, for those services a provider is classified into one of 3 provider types: Direct-contracting – provider has a direct, signed contract with plan Deemed-contracting – provider is deemed as contracting with plan Non-contracting – provider does not have a direct contract and is not deemed

18 California Health Advocates 18 PFFS Provider Types Deemed-contracting – provider is deemed as contracted if: Provider is aware in advance of furnishing services that individual is in the PFFS plan; Provider has reasonable access to the plans terms and conditions of participation; If plan makes this information available through postal service, , FAX, telephone or website The service provided is covered by the plan

19 California Health Advocates 19 Private Fee-for-Service (PFFS) Benefits – generally have cost-sharing similar to other MA plans and may have maximum out of pocket limits for Medicare covered services But beware of certain rules … Example: Todays Options in CA DME – if no pre-approval sought, could pay up to 50% of costs (instead of 20%) Disadvantage: Some providers may be unwilling to treat PFFS enrollees

20 California Health Advocates 20 Medical Savings Accounts (MSAs) MSAs have 2 parts: High Deductible Health Plan – MA plan that covers Part A and B benefits once high deductible is met Medical Savings Account – independent bank account owned by the member into which Medicare makes a deposit; members can use funds to pay for healthcare services

21 California Health Advocates 21 Medical Savings Accounts (MSAs) Medical Savings Account Must establish an MSA with designated bank, which will issue debit card, checkbook Medicare will make one, annual deposit into account in the beginning of the year Members may not make deposits into this account Unused amounts roll over in subsequent years If not enough $ in account to meet plan deductible, enrollee must pay using own $ until deductible is met

22 California Health Advocates 22 Medical Savings Accounts (MSAs) Medical Savings Account (Contd) Funds not subject to federal taxes if used for qualified health expenses See IRS Publication 502 Use of funds to pay Part D premiums not qualified but payment for Part D copays, coinsurance and deductibles is qualified (and these payments will count towards TrOOP)

23 California Health Advocates 23 Medical Savings Accounts (MSAs) Health plan/policy Medicare pays premium ($0 for enrollee) Only expenses for Medicare-covered services will apply towards deductible What Medicare + beneficiary would pay in FFS Once deductible is met, plan pays 100% for Medicare covered services (Parts A & B) No provider network – like PFFS plan, providers must agree to deliver services to enrollees

24 California Health Advocates 24 Medical Savings Accounts (MSAs) ( CA Example) Plan DeductibleDeposit AmountGap/Deficit $2,500 (SmartSaver I) $1,000$1,500 $3,500 (SmartSaver II) $1,375$2,125 $4,500 (SmartSaver III) $1,725$2,775

25 California Health Advocates 25 Medical Savings Accounts (MSAs) Restrictions on enrollment : Medicaid EGHP, retiree coverage VA, FEHBP, Medigap Any coverage that would pay for services before deductible is met Hospice patients ESRD (like all other MA plans) If live in U.S. less than 183 days a year

26 California Health Advocates 26 IV. Marketing of Medicare Advantage Plans

27 California Health Advocates 27 Marketing of MA Plans Number of factors converge to make informed decision making/choice more difficult for Medicare beneficiaries Great increase in numbers and types of plans being offered, with minimal oversight of marketing Many sponsors offering multiple products (PDP, PFFS, Medigap, etc.) Many agents selling multiple products Lock-in rules mean limited opportunities to change plans

28 California Health Advocates 28 Marketing of MA Plans Multiple plans/variations not always understood by agents and beneficiaries Some MA rules, benefit designs not adequately explained (e.g. PFFS rules, PPO deductibles, etc.) Plans can pay higher commissions to agents for MA enrollments vs. PDP enrollments Ex. enroll and migrate strategy

29 California Health Advocates 29 Marketing of MA Plans Beware: dual eligibles being targeted for plans that may be inappropriate for them Agents aggressively selling PFFS plans Using lists of same sponsors PDP enrollees Beware – new enrollment period allows PFFS plans w/ no Part D benefit to market year round

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