Tag: Medicare
Most plans will see a small increase
The new 2016 Prescription Drug Plans will cost more than they did this year.
There are a few signs of rising costs, from U.S. News and World Report:
- The average monthly premium will increase about 13 percent, from $36.68 to $41.46.
- The amount that taxpayers pay for catastrophic coverage will increase about $4.5 billion. The beneficiary pays 5% of the cost under catastrophic coverage, which supports beneficiaries with high drug costs.
- The maximum deductible for 2016 plans will be $360, $40 more than last year. This year, 67% of prescription drug plans will have a deductible, and 53% of those will charge $360.
Switching to a different plan will help beneficiaries save money, but The Kaiser Family Foundation says that overall, this could be the biggest increase since 2009.
In Virginia, the average monthly premium for 2016 Prescription Drug Plans will increase 19%, according to the Kaiser Family Foundation.
Aims to improve quality and cost of care
Medicare will implement new system for hospitals performing hip and knee replacements, which are the most common surgeries among Medicare beneficiaries. If hospitals don’t meet the standards, they will have to pay back a part of the cost to Medicare. If they do perform well, they will get a monetary reward.
What is the new program?
The Comprehensive Care for Joint Replacement model (or the CCJR model) aims at better quality care. It will begin April 1, 2016.
67 geographic areas are included in the program. The Staunton-Waynesboro area is the only one in Virginia.
How does it work?
Hospitals will be evaluated for an “episode of care,” which lasts 90 days after the surgery. The cost of the episode of care, including the procedure and any related care, is in question for the hospital.
If the hospital’s care doesn’t meet the cost and quality standards, they will owe Medicare for a portion of the cost for the episode of care. If they succeed, Medicare will give the hospital a financial reward.
The program is meant to create incentives not only for hospitals, but skilled nursing facilities, nursing homes, and other health providers to providing comprehensive, coordinated care.
Why start this program?
The Centers for Medicare and Medicaid Services say on their website that these surgeries are the most common among beneficiaries, but the care varies from hospital to hospital. They want to not only coordinate the quality of care and its costs, but improve care nationwide. The inconsistencies in the health of patients after these surgeries reflects the state of the entire health care system.
Prices vary for current and new beneficiaries
The White House announced the 2016 Medicare Part B premiums this week. They are significantly less than expected- you can see the original predictions in a previous newsletter. Here’s what you need to know:
Premiums: The Part B premium will increase for new beneficiaries and some current beneficiaries.
- Current Beneficiaries: Most current beneficiaries will pay $104.90 per month, the same as this year.
- New Beneficiaries: New beneficiaries will pay an increased premium of $121.80 per month.
- High-income Beneficiaries: Beneficiaries making certain amounts will have a higher premium Those making over $85,000 a year will pay $170.50. The prices increase incrementally, up to a premium of $389.80 for those making over $214,000 per year.
- Current Beneficiaries: Current beneficiaries will pay $166.
- New Beneficiaries: New beneficiaries will pay $166.
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See this article by U.S. News & World Report for more details on the 2016 Part B premium prices.
Read The White House’s post about the 2016 Medicare Part B Premiums on their website.
In addition to other Social Security changes in the budget, Congress targeted methods that permitted beneficiaries to increase their own Social Security benefits while collecting their spouse’s checks. Waiting to collect benefits yields a larger payout- after full retirement age (currently 66), benefits increase 8 percent per year until age 70.
Losing this option could be costly for seniors- some couples can make up to $60,000 filing this way. But for the government, the cost is even greater: if everyone took advantage of these loopholes, the cost to the Social Security Administration would be over $9 billion.
These are the two main strategies outlawed by the budget rules:
File-and-suspend: This loophole allowed a person to file for benefits and suspend those benefits right away. Their benefits would grow by a small percentage while they collected their spouse’s benefits.
Restricted application: Filing a restricted application at age 66 (or full retirement age) would let a person collect their spouse’s benefits while their own benefits grow untouched.
The law will go into effect May 1, 2016. After this date, these strategies will not be available. If you will be 66 before May 1, 2016, you have time to take advantage of these strategies before they are longer an option. The law will mostly affect new retirees, who will not have the strategy available to them.
Budget will end options that allowed married couples to maximize benefits
To read more about File-and-Suspend, see this Forbes article.
Prices will still raise slightly
Last week, we wrote about the likelihood of Medicare Part B premiums increasing because the Cost-of-Living did not increase.
Because of action by Congress, Medicare Part B premiums will not increase by 50% as expected. By slightly raising the annual deductible for all beneficiaries, and using money from the Treasury to cover Medicare Part B, the price hike will be avoided.
What will I pay?
- All Medicare beneficiaries will pay more for the annual deductible, which will increase from $147 to $167. The price originally predicted was $233.
- For most beneficiaries, their monthly Medicare Part B premium is $104.90. 30% of beneficiaries will see an increase to $120. Before the budget agreement, the premium would have been $159. Your premium will increase if:
- All beneficiaries will pay $3 more per month for their premium until 2021, to pay back the Treasury’s loan.
- A new felony charge: Conspiracy to commit Social Security fraud, which carries a maximum fine of $250,000 and up to 5 years in prison.
- A requirement that, if the prices of generic drugs rise faster than inflation, companies that produce them must provide Medicaid with bigger discounts.
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Part B premiums may increase for some beneficiaries
What is a COLA?
A Cost-of-Living-Adjustment is an increase in Social Security payments based on an increase in the cost of living. It is determined using the Consumer Price Index, which measures rates of inflation.
Since 1975, Cost-of-Living-Adjustments have been calculated annually, and result in an increase in Social Security payments. For the third time, the COLA will not increase. Each time has been during the Obama administration.
Why won’t there be an increase?
This year, there won’t be an increase because the cost of living didn’t increase. It actually decreased, according to the Consumer Price Index, because of falling gas prices.
Economists say that even though the price of medical care has increased, “consumer prices for a range of goods from food to housing have not risen enough overall to produce an increase in benefits, and have dropped from a year ago,” the Washington Post reported.
What does it mean?
Social Security’s benefit will remain the same for the next year.
If you saw our newsletter on the Medicare Part B premium increase, you know that the increase was dependent on a COLA adjustment. Now that we know there won’t be COLA adjustment, we know that Part B premiums won’t increase for 70% of Medicare beneficiaries. We also know that they could increase substantially for the other 30%, including those new to Medicare in 2016, those whose Part B is not paid through Social Security, and those with single incomes over $85,000 or joint incomes over $170,000. This issue of our newsletter has more detailed information about the premium increases.
The White House commented that they were concerned about the “unintended policy consequence resulting from the formula of calculating cost of living adjustments,” and has reached out to Congress in search of a solution.
Members of Congress have submitted bills aimed at halting the Part B premium increase, and dozens of groups representing seniors have been lobbying for their passage.
What can I do?
If you don’t want the Medicare Part B premium increase, call your congressman.
Cost-of-Living-Adjustments over the past decade. This chart was made with information from SSA.gov.
For more on the details of this year’s COLA, see this informative article from the Washington Post.
Here are the highest and lowest-rated plans for the upcoming year
The criteria for ratings is slightly different for each plan, as shown on MedicareInteractive.org.
Medicare Advantage Plans:
- Staying Healthy: Screenings, Tests and Vaccines
- Managing Chronic Conditions
- Plan Responsiveness and Care
- Member Complaints, Problems and Leaving the Plan
- Customer Service
Prescription Drug Plans:
- Customer Service
- Member Complaints, Problems and Leaving the Plan
- Member Experience with Plan
- Drug Pricing and Patient Safety
Plans are rewarded for high scores and penalized for recurring low ratings. If a plan has 4 or more stars, Medicare pays them an extra 5% per member in their monthly payments. If a plan is rated with 5 stars, the plan can enroll new customers year round- a coveted bonus.
If plans have less than 3 stars for three years, the Medicare Prescription Drug Plan Finder will flag them with a caution sign, and won’t allow beneficiaries to enroll on the Medicare website.
These are the highest-performing Medicare Advantage- Prescription Drug (MA-PD) Plans for 2016:
These are the highest and lowest-rated local Prescription Drug Plans for 2016. The highest-rated are in green, and the lowest-rated are in red.
For more information on Star Ratings, see this page from Medicare.gov.
The updated codes were implemented Oct. 1, adding over 50,000 new options.
When you go to the doctor with an illness, Medicare uses a set of codes called the International Classification of Diseases to categorize it, as well as surgeries and other procedures, when the bill is prepared.
The International Classification of Diseases, or ICD, is used by the World Health Organization. As a member of the WHO, the United States uses the ICD. Many industrialized nations have already switched to ICD-10.
This month in the U.S., ICD-10 went into effect with 69,000 codes. It replaced ICD-9, which had 17,000. ICD-9 had been used since 1979. Many argued it was time for an update.
Medical providers have been anticipating the change for months, but the switch to ICD-10 requires nothing from patients.
Seniors should look forward to greater detail in the codes. The new codes contain more detailed entries, and “specify the types, locations and severity of conditions and injuries.” The codes will also grow from 3-5 digits to 7, allowing for greater specificity.
Before, there were no differences in codes to describe which side of the body has a pain, or had a procedure. Now, more than 40% of the new codes contain that distinction. The implementation of ICD-10 could bring slight changes in payments and coverage, so be sure to check with your doctor if you have any questions.
This image shows the differences in categorizing a femur fracture using ICD-9 and ICD-10. From Roadto10.org.
Click here for Medicare’s ICD-10 page.
For a list of FAQ’s on ICD-10, see this helpful list
from Humana’s website.
We want to clarify Guideline 2 written in yesterday’s email newsletter.
You are free to make any decision, we just ask that you are prepared to make it during your scheduled appointment.
Thank you, and we look forward to working with you during the Enrollment Period.
This week, the price of a standard drug used for critical parasitic infections increased from $13.50 to $750 per pill.
The drug, Daraprim, has been a mainstay in treatment for over 60 years. After acquiring the drug in August, the start-up pharmaceutical company called Turing Pharmaceuticals increased the price by 5,000%.
The drug is used to treat toxoplasmosis, a common food-borne disease, that infects those with weakened immune systems. Typically, the drug is taken by babies whose mothers have infections during pregnancy and patients with organ transplants, AIDS, and some types of cancer.
Last month another decades-old drug, Cycloserine, was purchased by Rodelis Therapeutics, who then increased the price from $500 to $10,800 for 30 pills. After the news broke about the Daraprim price hike, Rodelis returned the rights to the drug to the former holder, a non-profit, on Tuesday. Instead of the original $500 for 30 pills, the organization will double the price to $1,050.
This is becoming a more common practice on drugs that are standard in specific, lesser-known illnesses.
“The cases of Daraprim and of the tuberculosis drug, Cycloserine, are examples of a relatively new business strategy – acquiring old, neglected drugs, often for rare diseases, and turning them into costly “specialty” drugs,” the New York Times wrote in an article.
The CEO of Turing Pharmaceuticals is Martin Shkreli, a former hedge fund executive who has been on multiple news channels and vocal on social media since Monday.
He said since he’s shown that companies and their investors can make a profit from rare diseases such as toxoplasmosis, the result will be more education about the illness and better drugs and service for patients.
Many have spoken against him and his company, including the HIV Medicine Association, the Infectious Diseases Society of America, and Democratic Presidential candidates Hillary Clinton and Bernie Sanders.
After the “outrage” at the beginning of the week, Tuesday night Shkreli said he would lower the price, but did not say by how much, or what the new price would be.
This image is from the Kaiser Family Foundation.
In a Kaiser Family Foundation poll, nearly three-fourths of Americans believe we pay more for drugs than people in other countries. In this case, they’re right- the generic version of Daraprim costs about $20 for 100 pills abroad. Drug costs in the United States exceed other countries by far, shown in this chart by the New York Times.
This image is from the New York Times.
Due to the Richmond 2015 UCI Road World Championships and the location of our office, we will be closed Thursday and Friday. We will be back on Monday!
Yogi Berra, the New York Yankees Hall of Famer, died yesterday at 90. Yogi was a great human being, and while he was known for his quotes, he had so many special things about him.
- “When you come to a fork in the road, take it.”
- “Baseball is 90% mental. The other half is physical.”
- “It ain’t over ’till it’s over.”
This photo is from the National Italian American Sports Hall of Fame website.
To read more about price increase of Daraprim, click here.
Visit the Kaiser Family Foundation’s website for more on their survey on prescription drug prices.