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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.
Though you may happy with your current plan, you should see what’s on the market.
- “Even if you loved last year’s plan, it’s important for Medicare recipient to shop around from scratch this year.”This is what we always say. It doesn’t hurt to shop around, and you may find an even better plan than your current one.”They really need to do their homework,” says Patricia Barry, author of “Medicare for Dummies” and a features editor at AARP. “If they do, they’re likely to find their best deal, and they’re likely to save a lot of money.”
- “On Medicare.gov, you can enter those drugs (including dosage and quantity) and a tool on the site will rank the plans by which would be cheapest for you, showing how much those drugs would cost on each plan and how much you’ll pay in premiums.”The Medicare Plan Finder on Medicare.gov is the program we use to find the best plans for you. We show you all of the results, and can explain what the differences are: copays, deductibles, prior authorizations, quantity limits, step therapies, etc. We know this program is the best out there.
- “It is complicated,” says Jack Hoadley, a research professor at Georgetown University’s Health Policy Institute. “The differences among plans can be hard to sort out. For those who aren’t Web-savvy, it’s even harder.”The daunting plans, the confusing terms, and the time it takes to make sense of it all can make it seem like it’s not worth it. It is! Plans change every year, and it’s not worth waiting until next year to realize there may be a better plan.
- “I recommend that people have help for doing this,” says Lita Epstein, author of “The Complete Idiot’s Guide to Social Security and Medicare.” “You can go into the drugstores… but obviously they’re going to gear you toward the plans they use.”One of our biggest strengths is that we are not beholden to any companies. We offer all plans to give our clients the greatest amount of choice. We are 100% objective; it truly doesn’t matter to us which plan you choose. We just want to help you find the right one.
Here’s a sample of how clients can save when comparing plans using the Medicare Plan Finder (click to enlarge).
The Annual Enrollment Period is from October 15 – December 7. Contact us today to make sure we have you on our call list to schedule an appointment.
Tom Says:
“This has always been the way to go, and now people are recognizing that. Even if you love your current plan, it will never hurt to see what else is out there.”
To read the article, How to Pick the Right Medicare Part D Plan for You, click here.
Hospice patients in selected facilities will be able to use both palliative care and medical treatments, rather than choosing one or the other, as they currently must.
Beginning in 2016, the program will be conducted over five years in 40 states, including Virginia. Medicare and the federal government hope to find a better way to provide care to those in hospice facilities, and to see if beneficiaries take advantage of having access to both options: hospice care and hospital care.
Currently, many people deny hospice treatment in favor of medical care that treats their illnesses and symptoms.
Hospice care is valued for it’s multifaceted approach to treating the physical, emotional and spiritual needs of the patient and their family. A hospice team typically includes doctors and nurses, grief counselors, social workers and other aides and volunteers that include not only the patient, but the patient’s family, in the process.
The test program relates to a previous announcement by Medicare that they will reimburse doctors for end-of-life care, sometimes referred to as “death panels.” For more information, see our past newsletter on the subject, or visit our Email Archive.
What does Medicare hope to get out of the experiment?
Medicare wants to see if implementing this policy would increase their own costs. Since many beneficiaries already opt for medical care over hospice treatments, and the cost of hospice care is far less than medical care, some speculate that Medicare’s costs won’t go up. If more patients choose hospice care over medical care, then Medicare’s costs could decrease significantly.
Who will the patients be?
Hospice generally serves patients in the last six months of their lives. In addition to those patients, this new program will be open to Medicare beneficiaries with advanced-stage cancer, chronic obstructive pulmonary disease, congestive heart failure or AIDS.
Instead of having to choose between medical treatment and hospice care, Medicare patients in the selected facilities will have access to both. It is a voluntary program.
What else will Medicare be looking at in the study?
In addition to paying attention to their costs with the new policy, Medicare will be evaluating if more patients are using hospice, the quality of care, and the satisfaction of patients and families.
What happens when the program ends after 5 years?
If if the program succeeds in providing patients with more flexibility and lowering Medicare’s costs, Medicaid will likely adopt a similar policy.There are three Virginia hospice facilities included in the program, each with multiple locations.
- Capital Caring, with locations in Aldie, Alexandria, Arlington, Falls Church, Fredericksburg, and the counties of Loudoun/Western Fairfax, and Prince William/Fauquier.
- Mountain Valley Hospice and Palliative Care, which has branches in Hillsville and Stuart.
- Carilion Clinic Hospice, located in Roanoke, Franklin and New River Valley.
The full list of hospices can be found here.
Tom Says:
“I want to hear from you. What do you want to see in our newsletter? Are you interested in any Medicare or senior-related topics you want us to cover? Or, if you like our current newsletters, I want to know that too. Let us know by responding to this email, or emailing me at [email protected].
This fall, Tom is teaching seniors how to use the Medicare Plan Finder.
The Osher Lifelong Learning Institute at the University of Richmond is a program of the School of Professional and Continuing Studies. Classes are offered on topics including literature, travel, culinary arts, history, and health. The University of Richmond is one of 119 Osher Institutes at colleges and universities nationwide.
In 2004, the University of Richmond received an endowment from the Bernard Osher Foundation, which includes lifelong learning for adults as part of its mission.
The website for the Osher Institute says, “There are no entrance requirements, no tests and no grades. In fact, no college background is needed at all. It’s your love of learning that counts.”
Tom’s class is called “Guiding You Through the Medicare Maze”.
It will be held on Tuesday, October 1st from 1:30-3:30 p.m. The cost is $20. The class description reads, “Figuring out Medicare and what’s right for you is no easy task, especially when it comes to medications. Come learn how to naviagte the Part D Plan Finder on medicare.gov and how simple changes can make a big financial difference.”
A membership to Osher is required to attend classes. More information on memberships can be found here.
“We find that our members are eager to learn more about a favorite subject or gather information about something they previously knew nothing about. Many are drawn to our array of history classes, but the offerings are diverse- from a study of the World War II to writing one’s memoirs. Osher members simply love to learn! This is also a very social group of people, and we find that lasting friendships are made and kept among Osher members.”
-Peggy Watson, Director
Osher Lifelong Learning Institute
University of Richmond
[email protected]
Tom Says:
“I have always wanted to do this, and I believe Osher is the perfect vehicle to teach seniors about Medicare. I am excited for the opportunity to give back to the community and to participate in this excellent program. And of course, to guide seniors through the Medicare Maze. I hope to see you there.”
To see the class schedule and brochure from the Osher Institute, click here.
If a patient isn’t admitted, Medicare won’t cover observation care, and won’t cover nursing home care after the patient leaves the hospital. The patient will incur all costs.
What is observation care?
When patients are not sick enough to be admitted to the hospital, but are sick enough to prevent them from going home, they receive observation care.
Under observation care, seniors often don’t know that they haven’t been admitted, because they are receiving care, medicine and treatments. Observation care is considered an outpatient service, though patients stay in the hospital, often overnight, sometimes for days.
What is the new law?
The U.S. Senate passed the NOTICE Act, (officially the Notice of Observation Treatment and Implication for Care Eligibility Act), which requires hospitals nationwide to inform Medicare patients if they are receiving observation care, but have not been admitted. This will allow patients to know up-front that they will have to pay for all of the costs.
President Obama signed the bill last week. The national law will become effective in August 2016.
What about Virginia?
Virginia was the fifth state to pass a version of this law on a state level. During the 2015 General Assembly session, the body passed a law requiring Virginia hospitals to inform patients of their status.
Senator Richard Black (R-Loudoun), the bill’s patron, said to the Richmond Times-Dispatch, “The reason it was brought to my attention was because people are getting some nasty surprises when they discover that they’ve got a bill that’s not covered by insurance, or they think they are moving into a skilled nursing home and they discover that they have not met the requirements for that.”
The law became effective July 1, 2015.
Why is this issue getting so much attention?
Observation care is becoming an increasingly popular option for hospitals. Since 2006, observation care claims have risen 91%. Observation stays of 48 hours or longer are up 450% in the same time period, according to this study.
The reason? Medicare won’t pay for admitted patients that could have been in observation care. So hospitals have begun using observation care more frequently to ensure they are reimbursed.