Hurry Up. Less than 45 days left

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It starts.  Today is the beginning of open season.  Time to choose our health care plan.  Or, if you are like me and entitled to Medicare, today is the day to decide to ADD to the mandated service.  Because years ago, the government cut Medicare provisions.  Now, we need to choose a drug plan and a Medicare Advantage plan to cover all those things that aren’t covered.  Or pay through the nose.

Now, let’s not get confused. All insurance plans are basically scams. (Sorry to tell you the emperor has no clothes.) We have to be willing to pay premiums so that we won’t be socked with big bills, to ensure our peace of mind. In essence, insurance has the lucky folks (those that don’t need the benefits) subsidizing the unfortunate (those that do need them). Whether that’s rental insurance, homeowner’s, automobile, or health care. Of course, mortgage companies demand that we have homeowner’s insurance- so that they can be paid off in the (unfortunate) circumstance of a major calamity to their property.  (What?  You thought you owned the home?  Sorry to inform you, it’s the bank holding the mortgage that has the keys to that kingdom.) And, states demand we all carry liability insurance so they if we (unfortunately) hit another’s car- or hurt another soul- those injured parties can be made (theoretically) whole.

PPACA, The Patient Protection and Affordable Care Act
(aka, “Obamacare”.  Maybe now, it’s closer to “Trumpcare”)

First, we’ll address PPACA.  Obamacare.  The ACA.

Here are the facts.  The entire states of Alabama, Alaska, and Wyoming will have only one insurer available on the marketplace.  Parts of Arizona, Kentucky, Mississippi, Oklahoma, and Tennessee- the rural parts, of course-  will be down to one insurer.  A total of some 650 counties across the US will be in this situation.  (This year, there are only 225 counties with a single insurance company offering plans.)

Notice that the choice of one insurer does NOT mean there is only one insurance plan.  You do remember that there are four choices- Bronze, Silver, Gold, and Platinum.  But, we can be virtually certain that the Platinum plans (which are the most expensive) will not be among the prime choices in the rural areas.   Nevertheless, having one insurance company does leave a monopoly in place.  The doctors affiliated with that plan are the ones that will have to be chosen (for coverage).

And, that is one of the problems.  Rural areas have about ½ the number of practitioners that obtain in larger areas.  There are only 119 practitioners per 100K of population- most of which are general practitioners (GP) versus 225 in more urban areas.  And, the urban region is far more compact in size!  (Note that the Federal Marketplace only has 132 insurance participants for CY 2018- down from 167 in 2017)

By the way, Silver Plans are chosen by Americans in some 2/3 of the cases.  And, Silver Plans are supposed to cover 70% of the costs for a given population.  The problem is that in rural areas, these plans cover wider geographical sizes, so it is harder to predict- and control- those costs.  And, those silver plans that are designated to obtain the subsidized premiums.  (With a new wrinkle, we’ll discuss below.)

The first changes PPACA hath wrought

We already are able to cover our kids up to the age of 26, on our health insurance plans.  (This not only covers our natural-born children, but given the proclivities of Americans, it includes foster children, adopted children, and step-children.)   We also have better preventive care (routine mammograms for women over 40, colorectal cancer screening for those over 50, immunizations)- all without copayments.  Pre-existing conditions and lifetime caps- they no longer exist as of 2014.

On the other hand, we can no longer use our flexible spending accounts to cover non-prescription drugs (except for insulin).  But, contrary to what many thought, it can be used to cover the costs of bandages, contact lenses, and blood-sugar test kits.

Small businesses- those that employ 25 folks or less- are entitled to obtain a tax credit; the goal is to entice these firms to provide coverage for their employees.  There are 4 million eligible firms- but only about 10% of them have claimed this credit as of last year (the 2010 tax filing).  A link to the form, 8941, is found here.   The credit changes with time- and the credit is only available for two consecutive years.

There are few other changes that PPACA has brought.  Medical expenses listed on Schedule A (Itemized Deductions) are now limited to 10% of adjusted gross income, instead of the 7.5% that obtained previously.  Except (and this is the last year), if the taxpayer or spouse is 65 or older, then the 7.5% limit still applies.

Our flexible spending accounts have also been limited.  That $ 5000 we used to put away is no more.  It’s now limited to $ 2500, but it will adjust for inflation each year beginning in 2013.

As I said earlier, today is the start of open season (when we are able to obtain new insurance, change our existing plans).  Up to this year, we had 90 days to find the right insurance, but this year, it’s down to 45.  Oh, wait- it’s even shorter.  Because the government will shut down the PPACA sites for 12 hours every Sunday- the busiest day of the week for site visitors- for “maintenance”.

Choosing a Plan

Most of us have heard that a number of insurers were jacking up their rates this year.  That was- and is- true.  After all, they expected that the government would simply refuse to meet their obligations to fund the subsidies provided the poorer residents of the US so they can obtain insurance, without going totally broke.  Exactly what was just promulgated via an executive order.

Premiums under PPACA (Obamacare)
Premiums Under PPACA (Obamacare)

What you probably don’t know is that the insurance companies are obligated to provide those subsidies for those at or below 400% of the poverty line, whether or not the US Government meets its requirement to pay those subsidies.   That’s why about 1/3 of the insurance companies (Centene Corporation, Health Care Service Corporation, Florida Blue, Molina Healthcare Inc, and Medica- among others) upped their rates for everyone- so that if the government balked at the required payments, they wouldn’t go belly up covering the obligations of the USA. (Other insurers, like CareFirst [BlueCross BlueShield of the DC areas] have requested permission from Maryland to restate their rates for 2018. Because without those changes- and without the promised federal funds, CareFirst will lose $ 50 million- the amount of its promised [and now evaporated] reimbursement.)

Those subsidies aren’t cheap- they run about $ 7 billion a year.  Those subsidies were terminated as of the date of the executive order (12 October 2017).  Which is why more than a few states have let the insurance companies revise the prices of the plans that were supposedly set in stone a few months ago.  Because they need to ensure they have enough money to provide benefits.

Enrollment Under PPACA

Now, I know that means some of you are going to be enticed by the foolish claims made by a few Senators that MEWA’s  (insurance pools that provide lesser benefits) will save us money.  Except, these plans simply suck.  Yes, folks will tell us that the larger firms use these routinely to insure their employees.  Surprise- that’s absolutely true.  Because those firms only rely on these plans to re-insure (that means there is also a stop-gap, a safety net) and cover some of the potential losses.  These bigger firms have computed that they can save money by covering the initial health care costs and defer to the insurers to pick up the tab for larger bills.  That keeps their premiums low.  We “little people” probably lack those reserves!  SO, how are we going to cover our initial costs?   Where will we get that money?  And, when smaller firms used these programs before, the insurance plans often leaving us with some bills.  Or, worse yet, the plans file for bankruptcy.  Leaving us with the large bill upon which they defaulted.  Oops….

If we are already insured by PPACA, click on this link, once we are in.   This should provide us with the costs for next year’s plan.  And, give us time to examine alternative plans that provide the same- or better- coverage for less money.

Don’t forget that you (if you are a female) will probably have to check WAY MORE carefully into your choice of plans- since the government killed the requirement that the plans include birth control, too.

When I was participating in Obamacare [being an old fart, I am now on Medicare], my plan increased by 25% in year 2- so I switched to an alternative plan [having the same doctor choices and coverage] for a few pennies different.  And, year 3, with a similar price increase on the horizon, I switched back to plan 1- for, actually, a lower price than I paid in year 2.)

Please, please, please do this!   Because you probably don’t realize another shenanigan that has been perpetrated…  If we do nothing, we may find that we’ve been re-enrolled in the same plan.  With those higher rates.  (You probably don’t recall agreeing to automatically re-enroll.  You did.)  And, that re-enrollment this year happens AFTER the open enrollment period has expired.  So, we won’t be notified of our error (it’s OUR error if we do nothing), until it’s too late.  When we can’t get that better or same plan at a lower rate.

One of the vagaries of the executive order withholding payments to the insurance companies is that, for at least several states, only the premiums on the silver plans are going up.  (And, because of the failure to provide the subsidy to the insurance company, the average rise may be 34%!)The silver plan is the one we are supposed to choose if we are entitled to subsidies.   The lower cost bronze plan (which covers only 60% of the costs), and the two higher benefit plans (gold, which covers 80% and platinum, which covers 90% of the costs) may not demonstrate the same level of increase.

So, if we are not getting premium support (which this year is expected to increase from an average of $ 382 to $ 555 on average), it would be wise to examine what the cost of the gold plan may be.  For significantly better coverage, the premiums may be nearly identical to those of the newly revised silver premium plan prices.

Another vagary?  Some insurers are offering ZERO cost plans.  And, that’s true for almost all of the 2922 counties across the US.  (To the best of my knowledge, this seems to be happening is about 2692 counties.)  The availability of a “free plan” depends upon family income, household size, age, where we live, and whether we have access to other health care plans.

Zero Cost PPACA (Obamacare) Plans

Some examples- Income of $36K at 60 years of age will be able to get free health care in 1590 counties; someone making $ 12K could still get a free plan in 654 counties.   Oh, another fact- many of these zero cost plans are of the bronze variety- which means we get the buying club for better prices for docs, hospitals, and drugs, but the out-of-pocket costs will be higher than those for the silver plans.

The insurers are banking on obtaining a slew of enrollees who won’t be using the system very much and will enhance the stability of the programs, since they will counterbalance the costs for those who will draw upon plan benefits more liberally. 

High-Deductible Plans and HSA’s

Remember that choosing a high deductible plan also provides one the legal right to put $ 3400 in a health savings account (HSA).  [That tax-deductible amount is actually $6750 for families].  Oh, if we are older than 55, those limits go up by a grand.  If we don’t need to use the funds in a given year, they can keep accumulating- like a 401(k) or IRA plan.   We can expect to save some $ 1300 to $ 2000 a year (in premiums) for these high deductible plans.  Which savings should be funneled to that HSA, to cover any health costs that are not covered by our plan.)

The HSA’s have been around since 2003, and given a high deductible healthcare plan, the odds are we are eligible to use one.  The funds we put in an HSA is tax-free- at the time of deposit, and as long as we use those funds to pay legal medical bills (deductibles, out-of-pocket max, useful medical therapies that are not included in our insurances) and have a high-deductible health insurance plan, spending that money is also tax-free.  If we use the funds for non-approved items, then we owe taxes on those withdrawals.

If we don’t use all the money we have in a given year, it simply rolls over with no penalties for not using it up.  (Flexible Spending Accounts require all money to be spent by the end of the year.) 

Remember- even though we’ve elected a new health plan, those changes won’t take effect until 1 January 2018.  Which brings up another thing.  Sign up for the insurance- because a subsidy may still open up.  And, if there is no subsidy, we can simply NOT pay for the insurance and will have no further obligation.  (The program stipulates if we don’t make payment before January, we have opted to not continue or start our insurance.)   But, if we don’t act during open season and the rulings – or Congressional action- stipulate the continuation of the subsidies in mid-to-late December, it will be too late for us to sign up and get insured- with those subsidies fully funded.

Again, it’s not just the fact that we are covered for any illness or accident, as stated above. We are joining a “buying club”.  When we have insurance, our plan has arranged what amounts to discount rates for physician visits and drugs.  That alone makes any real (i.e. not a catastrophic plan) healthcare plan a great deal. 

Medicare- for those 65 or older

The first thing we need to know is that open season for Medicare consumers ends 7 December- not the 15th as is true for PPACA (above),

And, several years ago, Medicare had just developed new coverage criteria (which is why we see all those advertisements for Medicare Advantage right now). And, as one of my favorite persons, Cathy Miller, has often reported, choosing the right plan is a humbling request. Because Medicare – and all its flavors- makes the US Tax Code look like a reading primer. (See Jane Run comes to mind.)

For those of you who think I’m nuts (no polling here; there’s way too much going around the US right now telling us whose nose is ahead by an inch today), check out a few of Cathy’s blogs. (Here’s a great first choice.) But, I will explain things my way.

Medicare Primer

You have to understand that Medicare was a lot simpler back in the 60’s and 70’s.  But, it also was brand new, needing a little fine-tuning.  (And, seeing how this fine-tuning went, no one should be surprised that there is resistance to the same political folks’ fine-tuning of Obamacare.) But, as a means for “improving” Medicare (that means the government found a way to push costs onto consumers, just like our insurance companies and employers have been doing), the program split into Part A (hospital expenses) and Part B (physicians, equipment, outpatient obligations)- with a 20% co-pay. (There it is- moving costs to the patient.)  (Of course, all those other ‘parts’ we will discuss are strictly patient responsibilities, too.)

I use the term Medicare, which is now considered to be Original Medicare.  This coverage is not free- if we are getting social security payments, the costs are deducted from our benefits.  If not, we must prepay for this federally managed benefit.   Moreover, if we are receiving social security by the time we turn 65, we will be automatically enrolled in both Part A and Part B.

Part A of Medicare is basically hospital insurance.  This benefit provides for in-patient hospital costs, hospice care, skilled nursing facilities, and some (IMHO, very limited) home health care.  Part B Medicare covers physician fees, outpatient care, medical supplies, and some preventive medicine services.  Despite the list of reasons why HHS (Health and Human Services) claims we can skip signing up for Part B, we probably should.  Because there will be penalties if we sign up later than we were first eligible- or we may not be able to sign up when our other coverage has expired.

Now, for the dirty little secret.  Because the government cut some of the benefits, we all should strongly consider getting Medicare Advantage or some other sort of supplemental Medicare coverage (aka Medigap).A Medigap plan is different from Medicare Advantage.

Medigap only supplements the Original Medicare; Medicare Advantage covers more benefits.  But, both are private insurance plans, however- which means we pay for them separately- they are not paid to the US government.

All Medigap policies are guaranteed to be renewable.   As long as we pay the premium on time, we will be covered.  These plans used to cover drug costs- but that benefit disappeared more than a decade ago.  (This means if we elect to use a Medigap plan, we must purchase a Medicare Prescription Drug Plan, aka Part D insurance.) These Medigap plans, while they supplement the Original Medicare, do not include long-term care, vision benefits, dental coverage, eye care, hearing aids, or private duty nursing. If we don’t sign up for Medigap initially, we will be subject to a health evaluation to obtain it later on in our lives.

Should we elect to obtain Medicare Advantage (each region will have a choice of some 21 plans, although some can find as many as 40 for their locale- there are 2317 choices nationwide), then we have elected to let them manage our Original Medicare program, too.  (HHS defers to these insurers management.  That’s why we have to choose from approved Medicare Advantage providers.)   Medicare Advantage covers pretty much everything we need,  except for hospice care.   And, like conventional insurances, the plans come in a variety of flavors- PPO, HMO, PFFS, SNP, HMOPOS, even MSA.  (NOTE:  ESRD [dialysis and those folks with end state renal disease] are precluded from participating in Medicare Advantage.)  Moreover, if we have Medicare Advantage, then we are usually excused from filing claims.

The HMO (health maintenance organization, which are offered by nearly 2/3 of the plans [68%]) variety means we can only use the doctors that are members of the plan to which we belong- and we will probably need referrals from our primary physician to see a specialist. HMOPOS (HMO point of service) extend those benefits by letting us escape from the HMO network, but incur higher co-payments or co-insurances.

A PPO (preferred provider organization, about 27% of the choices) version means we pay much lower rates for service when we maintain our association with the plan’s physicians, hospitals and clinics.   And, we will pay more when we venture outside the network.

PFFS (private fee for service)  provide benefits closest to the real original Medicare.  They cover all services for which the provider(s) agree to the payment terms of the coverage.  The plan determines what we will pay and what they will pay for our needs. (Note that many of the higher letter plans cover all such costs.)

SNP (special needs plans) like the name implies are for those folks who have special needs.  They are in nursing homes or have chronic medical conditions.

MSA (medical savings accounts) like their conventional insurance counterparts only can be used when we have high deductible plans.  And, having these plans means we must seek out Part D coverage for our drugs.

Part D is the most common addition needed when we are on Medicare, since this part covers prescription drugs. (Note, carefully, this is a private insurance plan- and not really part of Medicare- despite its moniker.)  And, if we don’t enroll as soon as we are allowed, then we could be penalized with surcharges forever.

About 30% of all Medicare recipients sign up for the Advantage plans. (The basic version is also known as Medicare Part C.) These provide relief against the out-of-pocket expenditures (those 20% co-pays), among other aspects. Unfortunately, too many of these (private insurance) plans are really HMOs in disguise, requiring us to use the practitioners and facilities they favor, as mentioned above.

Medicare Advantage Plan Choices

As I said, if we don’t sign up for these programs when the government wants us to (that’s the portion of the requirements that justifies its moniker), we can either be penalized- or blocked from coverage for a while. That means sign up when (ok, a few months before) we turn 65. If one keeps on working (and have health insurance), s/he will have a window that lets them register when they stop working. And, of course, those “change-of-life” events lets us get on board. Plus, there’s an open enrollment period (which is what we are experiencing right now) every year. (Notice the similarities to PPACA [Obamacare]?)

It’s imperative that we check out all the plan varieties.  After all, some Medicare Advantage Plans are actually available at zero cost. (Yes, that means FREE!)  Some plans even throw in gym memberships.  (They’re hoping we will exercise those 150 minutes a week, so we’ll be healthier and cost them less money in benefits.)

Now, that I made it as clear as mud, I can tell you that I have already signed up. And, opted for the best Medicare supplement I could find. Sure, it doubled the cost of the government mandated Medicare plan. (Sorry, Virginia, Medicare is not free.) But, my plan is NOT a PPO or an HMO and leaves me with basically no major out-of-pocket costs.  And, my plan lets me use any doctor or hospital I want.  On the other hand, I had to buy separate drug coverage (Part D).  

Remember that our  Medicare subscription fees are deducted from our social security or civil service annuity payment. (Medicare Advantage and Medigap policies premiums are paid directly to the insurer we have chosen; these payments are separate from the US Government Medicare plans.) 

And, if we don’t receive those payments because we opted for a later retirement date, we should sign up for automatic withdrawals. (We can pay by check, but we must make those payments on time.  And, as Cathy Miller has indicated, we need to provide the funds to cover 90 days with that very first payment.) Note further, if we are late paying, we can get our participation cancelled. Which means more penalties or blocked coverage.

 

An Amazon Kindle Book is also in press.
Open Season 4 Dummies

 

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6 thoughts on “Hurry Up. Less than 45 days left”

  1. I am lucky in that I have Medicare and the VA and my wife has Medicare and Mexican Free Medical Insurance so we cover the requirements but no not use the benefits, except for my med’s. which I get through the VA for a considerable reduced price. We have great doctors here in Mexico, trained in the states. Our dentist is an American that moved his practice here and has a goo practice. Mind you, they cater to USA an Canada residents and would be a little to costly for most others.

  2. We looked into the Advantage Plan when hubby reached 65 but found some of the doctors didn’t accept it. Since he has a monthly infusion of almost $6000, we opted to Plan F on the supplement and they take care of the extra that Part A/B doesn’t cover. I’m the kind of person that gets insurance (whether it by auto, homeowner, vehicle, etc) and hope we never need it. But on Medicare Supplement, we need it and use it!
    Martha recently posted..One Year Ago Today

    1. I’m with you, Martha!
      F, while expensive, is the right way to go if you need to worry about things that may never be. (That’s my insurance, too.) You may need to buy drug coverage, since many F’s don’t include them.

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