Medicare Information, Scams and News

It's that time of year again. If you are on Medicare, or are newly eligible, the annual open enrollment period to select or change coverage starts October 15 and runs through December 7.

For starters, you need to review your current plan to make sure it continues to meet your needs. Also, the plan itself might have changed. If so, you may already have received a notice.

Starting this month you should use Medicare’s Plan Finder to search for a plan that meets your needs. October 15 is the first day you can change your Medicare coverage for next year. On December 7, that window closes.

January 1

Coverage for the year begins January 1 if you switched to a new plan. If you stay with the same plan, any changes to coverage, benefits, or costs for the new year will also take effect on that date.

If you’re in a Medicare Advantage Plan, you can leave your plan and switch to Original Medicare. If you switch to Original Medicare, you’ll have until February 14 to also join a Medicare Prescription Drug Plan to add drug coverage.

Your coverage will begin the first day of the month after the plan gets your enrollment form. In certain cases, you may be able to make other changes if you qualify for a Special Enrollment Period.

The basics

New to Medicare? Here are some basic things you need to know: Medicare plans are divided into parts.

Part A pays for hospital care, skilled nursing, hospice, and even some home health care. This part is free, providing you or your spouse have been in the Social Security system for at least ten years. If not, premiums can run as much as $407 a month

Part B is more like regular health insurance, covering doctor visits, preventive care, outpatient care, and hospital visits. Premiums are based on income and are deducted from your Social Security payments if you are receiving benefits. In 2015, Part B cost $104.90 a month for Medicare beneficiaries whose incomes are $85,000 a year or less – $170,000 for a couple – and up to $335.70 for those whose annual income is greater than $214,000.

Part C is what is known as a Medicare Advantage plan. It combines parts A and B and, in most cases, Part D, the drug plan. Premiums vary by location and coverage. According to the Centers for Medicare & Medicaid Services, the average premium in 2016 will be $32.60. Advantage plans often limit where beneficiaries can get their care.

Part D covers prescription drugs, with premiums of $15 to $50 per month. It isn't required, but here's something to keep in mind; it's cheaper to enroll when you begin Medicare, instead of waiting until you are older.

Still have questions? AARP has a handy Medicare Question & Answer Tool. You can also visit Medicare.gov, or call 1-800-MEDICARE (1-800-633-4227) to learn more.

When you celebrate your 65th birthday, it's a transition to your “golden years.” Even if you're still working, you start thinking about the days when you won't be.

And even if you are still on the job, age 65 marks the time when you transition from private health insurance – if you are fortunate enough to have it – to Medicare, the government's health program for seniors.

As with any government program, Medicare can be confusing for those who are new to it. To help with the transition, AARP's Medicare expert, Patricia Barry, is out with the second edition of her book, Medicare For Dummies. It's offered as a comprehensive guide for navigating Medicare’s often-confusing complexities and helps consumers avoid mistakes that could be costly.

Barry outlines what Medicare covers and what beneficiaries pay, offering some tips along the way for reducing out-of-pocket costs.

Making the right decisions

“This book will help anybody with Medicare get the best out of their coverage and save money,” said Barry. “Medicare For Dummies is especially useful for people who are about to become eligible for the program, because that’s when they need to make the right decisions—out of an array of often confusing options—and avoid pitfalls that could cost them dearly.”

The book also provides some of the basics, including how the program is broken down. Medicare Part A is the hospitalization portion of Medicare, covering you when you are admitted to the hospital. According to Medicare, you usually don't pay a monthly premium for Medicare Part A coverage if you or your spouse paid Medicare taxes while working. This is sometimes called "premium-free Part A."

Medicare Part B works like normal health insurance, covering doctor's visits and routine health care.

Most people pay the Part B premium of $104.90 each month, if you sign up for Part B when you're first eligible.

Costs

You pay $147 per year for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment. Costs for higher income beneficiaries may be higher.

Medicare Part D is the program's prescription drug coverage, which is optional. Many beneficiaries who are healthy and not taking medication often decline this coverage. However, the coverage becomes increasingly expensive for each additional year you wait. If you were to develop a serious illness at age 70, the Part D premiums would be much higher than if you obtained it at age 65.

Medicare doesn't cover all of your medical costs – only about 80%. That's why many recipients purchase a “supplemental” policy that covers the other 20%.

Complicated? Sure. In her book, Barry offers readers advice to get the most from the program while avoiding the pitfalls.

Her advice in a nutshell? Sign up at the right time to avoid lifelong penalties.

The latest report from the Social Security Trustees Report assumes that for just the third time since the automatic adjustments were adopted in 1975, people who receive Social Security payments will not receive a cost-of-living-adjustment (COLA) in 2016.

COLAs only kick in when the Consumer Price Index (CPI), the official gauge of inflation, goes up. The CPI is not expected to increase in the base period used to determine the COLA.

A report by the Center for Retirement Research at Boston College says this would have an unintended consequence that would sock some Medicare recipients with a significant Medicare premium hike.

“Cause a flap”

“The anticipated lack of a Social Security COLA will cause a flap in the Medicare program because, by law, the cost of higher Medicare Part B premiums cannot be passed on to most beneficiaries when they do not get a raise in their Social Security benefits,” the authors write.

This unintended consequence also highlights the complicated interaction between Medicare premiums, which are generally deducted automatically from Social Security benefits, and the net benefit – the money available for non-health care expenditures.

According to the report, the Social Security COLA does not fully reflect the increase in health care costs faced by the elderly because the net Social Security benefit does not keep pace with inflation. While many seniors rely on the inflation adjustment in Social Security, “the rise in Medicare premiums undermines the ability of beneficiaries to maintain their purchasing power for non-health-care items.”

Medicare recipients are accustomed to paying more each year in premiums. The report finds that, barring any complicating factors, the premium would increase from $104.90 in 2015 to $120.70 for 2016.

Hold-harmless provision

But here's the rub; the law contains a hold-harmless provision that limits the dollar increase in the premium to the dollar increase in an individual’s Social Security benefit. This provision applies to roughly 70% of Part B enrollees. They have nothing to worry about.

The remaining 30% aren't covered by the hold-harmless provision. They include new enrollees during the year; enrollees who do not receive a Social Security benefit check; enrollees with high incomes (who are subject to the income-related premium adjustment), and dual Medicare-Medicaid beneficiaries - whose full premiums are paid by state Medicaid programs.

Because 70% of Medicare recipients would see no increase in the absence of a Social Security COLA, the Part B premiums for the remaining 30% must be raised enough to offset the rising costs.

52% premium hike

“Under the intermediate economic assumptions, the estimated monthly premium in 2016 for these other beneficiaries is $159.30,” the authors write. “That means that, unless the Administration figures out some workaround, the base Part B premium would rise from $104.90 to $159.30 – a 52% increase.”

For higher income participants, the premiums would rise even higher, based on multiples of $159.30.

“Clearly, political pressure will build for some kind of work-around,” the report concludes.

The Federal Trade Commission (FTC) has reached settlements with a group of scammers who falsely promised consumers new Medicare cards in order to obtain their bank account numbers and debit their accounts.

The settlements, resolving charges the FTC filed last year against Benjamin Todd Workman and Glenn Erikson and their companies, ban the schemers from selling healthcare-related products and services.

Empty promises

Telemarketers falsely told consumers they needed their bank account numbers to verify their identities before sending a new Medicare card, promising they would not take money from the accounts. In fact, they took several hundred dollars from each consumer’s account and provided nothing in return. In some cases, the telemarketers falsely promised to provide consumers with identity theft protection services.

Under the settlement orders, the defendants also are banned from selling identity theft protection-related products and creating or depositing remotely created checks or remotely created payment orders, which are used to make bank account debits.

They also are prohibited from billing or charging consumers without their consent, misrepresenting material facts about any product or service, violating the Telemarketing Sales Rule, and selling or otherwise benefiting from customers’ personal information.

The orders impose a judgment of more than $1.4 million, which will be suspended upon payment of $35,000 by Workman and the surrender of certain bank accounts. In each case, the full judgment will become due immediately if either defendant is found to have misrepresented his financial condition.

The defendants are Workman, Sun Bright Ventures LLC and Citadel ID Pro LLC, and Erickson and Trident Consulting Partners LLC.

People who receive monthly Social Security benefits will find a little more in their checks in 2015.

The Social Security Administration says monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 64 million people will increase by 1.7% in 2015 the coming year.

The cost-of-living adjustment (COLA), which works out to about $22 per month, will begin with benefits that more than 58 million Social Security beneficiaries receive in January 2015. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2014.

The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Bureau of Labor Statistics.

More changes

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $118,500 from $117,000.

Of the estimated 168 million workers who will pay Social Security taxes in 2015, about 10 million will pay higher taxes because of the increase in the taxable maximum.

Medicare premium

The bump in benefits is not the only good news for seniors.

The premium of $104.90 that most people pay each month for Medicare Part B won’t change in 2015. Nor will the Part B deductible of $147 per year.

At the same time, the government says that if your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay more.

For consumers with Medicare Advantage, the 2015 open enrollment period starts October 15 and extends through December 7, 2014. If you want to make changes to your plan, that's your window of opportunity.

Medicare Advantage is a type of Medicare health plan purchased through a private company that contracts with Medicare to provide Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans.

Being enrolled in a Medicare Advantage Plan means your Medicare services are covered and paid for outside of Original Medicare. Most Medicare Advantage Plans also offer prescription drug coverage.

Shopping season

Just before open enrollment the companies that operate the various Medicare prescription drug and Advantage plans will inform you of any changes for the coming year. You can decide to stick with the plan you have or shop around for another.

What should you be on the lookout for? If you have a prescription drug plan, the premiums and co-pays you pay can change. That information should be contained in the Annual Notification of Change you will receive by the end of September.

Medicare Advantage plans themselves can also be subject to change. You might see an increase in co-pays for doctor's visits and outpatient services. There could also be an increase in out of pocket maximum payments.

Besides changes in costs, there could be changes that require you to go looking for a new health care provider if you keep your current plan.

Doctors pulling out

“In the last few years more doctors, and even some hospitals, have been dropping some of the Medicare Advantage plans that they accept,” Brandon Ritchey, an owner of Medicare Health Plans, a health insurance company in Overland Park, Kan., told ConsumerAffairs.

Ritchey's company sells Medicare Advantage policies in Kansas and Missouri and Medigap supplemental policies nationwide online.

“If you are planning to change Advantage policies it's best to work with an agent face to face,” he said. “Changing policies can be relatively simple or complicated. But you should work with someone who can explain the process and answer questions.”

Year of change?

Ritchey says Medicare recipients should be prepared for changes in their policies this year. His company advises that, due to shrinking doctor reimbursement rates, the pool of doctors who accept Medicare is also shrinking in many areas.

Early indications suggest that in many areas plans are increasing their premium and copays and some of the zero premium plans may have to begin charging a monthly premium. Living in an area with fewer Medicare eligible consumers may produce the most drastic changes, including the removal of some plans altogether.  

In 2009 Medicare, the health insurance program for Americans 65 and older, spent $1.9 billion on 26 tests and procedures that studies have shown offer little or no health benefit.

In other words, the money was wasted. And the researchers who advance this claim say it's “just the tip of the iceberg.”

Harvard Medical School researchers analyzed Medicare claims data, focusing on the tests and procedures that had been identified as essentially useless. They found that a least one in four – 25% – of Medicare recipients received one or more of those services in 2009.

Those 26 tests and procedures aren't the only identified as having little or no value. The researchers claim there are hundreds more.

"We suspect this is just the tip of the iceberg," said study author J. Michael McWilliams, associate professor of health care policy.

Other warnings

This is not the first alarm bell to go off over Medicare spending. Last year a Department of Health and Human Services (HHS) report found improper Medicare payments in Fiscal 2013 surged by nearly 19%, to just over $35 billion.

In April The New York Times reported a small number of doctors raked in nearly a quarter of the $77 billion paid out in U.S. government health programs, including Medicare.

The report said in 2010 just 100 doctors received a total of $610 million, including a Florida ophthalmologist who collected $21 million in Medicare payment. Researchers compiling this latest study say the numbers are shocking.

"We were surprised that these wasteful services were so prevalent," said Aaron Schwartz, lead author of the Harvard study. "Even just looking at a fraction of wasteful services and using our narrowest definitions of waste, we found that one quarter of Medicare beneficiaries undergo procedures or tests that don't tend to help them get better."

Unneeded services

The commonly prescribed but ineffective services identified by the researchers include arthroscopic debridement for knee osteoarthritis and a form of back surgery that involves filling collapsed disks with cement.

These services, the researchers claim, almost never provide any health benefit to patients. In fact, they claim they are almost always wasteful, pointing to recent empirical studies that have been conducted on the effectiveness of the procedures.

Other procedures were identified as wasteful, even though they can provide significant benefits for patients under very specific circumstances.

Exceptions

For example, lower back imaging provides little help for a patient with muscle soreness but it can be lifesaving when used to identify cancer or a spinal abscess.

With hundreds of medical procedures to consider, the researchers zeroed in on 26 that would stand out using the kind of information available in Medicare claims data. Then they looked for examples of those services that were likely to be a waste of money.

Waste was hard to isolate, they found, because the criteria used to measure it tends to vary widely.

Some might disagree

"How much waste you find varies greatly depending on how you define it,” Schwartz said. “Removed from the clinical details of a particular patient, it is hard to know whether a given procedure might be useful or not."

But finding and eliminating waste in Medicare can be expected to get increased attention in coming months. According to AARP, the Affordable Care Act shifts Medicare's focus to keeping older people healthy.

As a result, some coverages may be improved while procedures identified as wasteful or ineffective may no longer be covered, with the money diverted to other uses.

Companies advertise in order to build brand awareness with consumers. When it's decision time, the company is hoping the consumer will pick its brand.

That's how companies sell everything from beans to automobiles and yes, even health benefit policies. A study by HealthPocket, a company that rates health care policies, has completed a study of how individual policies stack up in the the government's Medicare plan quality star system. In particular, it focused on one well-known and widely-used branded Medicare Advantage program. 

“We found that plans bearing the AARP brand in the Medicare Advantage market on average fall short of the industry in two measures of plan quality,” the study said.

More than 14 million Americans have Medicare Advantage plans, which supplement coverage under traditional Medicare. The plans are growing in popularity compared to traditional Medicare, and consumers who choose Medicare Advantage coverage have a variety of plan options to compare before making a final decision.

According to HealthPocket, consumers usually base their choices on multiple factors, including premium cost and finding their physician in a plan network. The Medicare plan quality star rating system ranks plans by assigning them a number of stars.

In the middle of the bunch

Out of five possible stars, HealthPocket says 85 percent of AARP's plans fell into the 3.0-3.5 range, with 8.7 percent in the 4.0 range and no plans achieving an excellent 4.5 or 5.0 score. At the same time, 31 percent of non-AARP plans achieved a score of 4.0 or higher.

Sheila, of Boynton Beach, Fla., signed up with AARP's United Healthcare Medicare Advantage and finds the requirement of pre-authorization for drug approval, which can take up to 72 hours, doesn't work well in her case.

“I am suffering with blood clots, which can be very dangerous,” she writes in a ConsumerAffairs post. “If I don't take the drug, I could easily suffer an embolism that will end my life. I can understand the need for an authorization on a controlled substance. They insist that a prescription from my doctor will not suffice as authorization. I do not write my own prescriptions. If a doctor does, why is this not considered authorization?”

Bill, of Livonia, Mich., says his doctor hates his AARP policy and he is coming to share that view.

'Polite but incompetent'

“I find their telephone customer service to be very polite but incompetent,” Bill writes. “I've called five times over the last five weeks to check on my application and on the fifth call, they said they have never received a completed application. All other calls they said it was in progress. Also, I tried to apply using their website but it wouldn't work. So I faxed my application and they lost it. I will seek insurance elsewhere.”

According to the HealthPocket study, the highest-performing competitors  were nonprofit health plans, including Kaiser; Gunderson Lutheran Health System; Baystate Health; and HealthPartners, Inc. Certain for-profit plans also had higher average contract scores than AARP, including Humana and Aetna, the report said.

"Having health plan options can save money and improve quality of care, but it can also make decisions tough for consumers," said Steve Zaleznick, Executive Director for Consumer Strategy and Development at HealthPocket. "While going with a well-known brand can bring peace of mind, consumers also have tools they can use to help weigh costs and quality objectively, including for plans with less familiar names."

The Medicare plan star-rating system is a tool consumers can use to compare plans. The rating provides a one to five – actual results start at two stars -- scoring system for Medicare Advantage Plans. The overall rating reflects treatment, preventive care, and customer satisfaction collected on the Medicare Advantage plan.  

Before you go under the knife for surgery, why not get a look at what it’s going to look like beforehand?

Today, you can do that with Touch Surgery, an app that gives patients a virtual walk-through of the procedure they’re getting. The app serves as a training tool for surgical students as well.

Jean Nehme, who created the app with Andre Chow, Advait Gandhe and Sanjay Purkayastha, said it really allows patients to involve themselves with the details of the surgery, which in turn allows them to feel better about it.

Furthermore, Touch Surgery lowers the wall of mystery that exists between many surgeons and patients and helps patients feel more secure about their procedure, since they’re able to see what’s being done.

“We’ve found that it really improves patient comprehension and reduces anxiety, and people are getting out of hospitals faster,” said Chow. “Once upon a time, the surgeon was god, but now it’s more of a shared partnership.”

Up close and personal

Although the virtual images may be graphic and disturbing for patients to see, Touch Surgery lets them get an idea of what the problem is and what needs to be fixed.

Chow says he and his partners really wanted to bring patients into the hard-to-understand aspects of surgery and the best way to do that was by creating an interactive tool.

Barrett Veldsman, a patient who underwent gallbladder surgery, said Touch Screen was the best way to understand his procedure, which he wasn’t able to understand when he went on the Internet to do research.

“You look at Wikipedia, you read it, it goes in and you really don’t understand all the terminology, but this is so simple it relaxes you,” he told a media outlet.

“With Touch Surgery we focused on the essence of surgical education and we combined it with new advances in consumer technology that allowed us to make something that’s mobile and interactive in a way that’s never been done before,” he said.

Training tool

But Touch Surgery just wasn’t made to educate patients on an upcoming surgery; it was made so surgeons have an easier and better way to teach their students.

And having training that’s more thorough will allow those students to feel more confident about procedures and explain things to patients a lot clearer, say the creators of the app.

“What the app has allowed trainees to do is to be much more prepared when they actually come to the operating room for the first time, so they understand the anatomy better,” Purkayastha said.

And for future surgeons, Touch Screen couldn’t be easier to use, its creators say. In order to perform mock surgeries, students simply have to swipe the screen or use a pair of virtual cutters to make incisions.

The app doesn’t only teach the technical aspects of performing a surgery, but it helps surgeons learn how to be more decisive in the operating room and make better decisions.

“There is a saying that decision is much more important than incision,” said Nehme.

“Before you cut, you need to be sure of your decision and what comes next. It’s about 75% decision making and 25% technical skill. The interactive learning process helps you identify risks, at what point should you be aware of this nerve, when should you be aware of this artery.”

Touch Screen is available on iPhones and iPads and can be downloaded in the iTunes app store.

If you are among seniors subscribing to Medicare prescription drug plans, here ‘s some good news: premiums are projected to remain constant in 2013. 

The average 2013 monthly premium for basic prescription drug coverage is expected to be $30, according to Health and Human Services (HSS) Secretary Kathleen Sebelius. Average premiums for 2012 were projected to be $30 and ultimately averaged $29.67. At the same time, since the law was enacted, seniors and people with disabilities have saved $3.9 billion on prescription drugs as the Affordable Care Act began closing the “donut hole” coverage gap. 

“Premiums are holding steady and, thanks to the health care law, millions of people with Medicare are saving an average of over $600 each year on their prescription drugs,” said Sebelius. 

The projection for the average premium for 2013 is based on bids submitted by drug and health plans for basic coverage during the 2013 benefit year, and calculated by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary. 

Enrollment period approaching 

The upcoming annual enrollment period -- which begins Oct. 15 and ends Dec. 7, 2012 – allows people with Medicare, their families and their caregivers to choose their plans for next year by comparing their current coverage and quality ratings to other plan offerings. New benefit choices are effective Jan. 1, 2013. 

Because of the Affordable Care Act, out-of-pocket savings on medications for people with Medicare continue to grow, according to HHS.  Last month, CMS announced that more than 5.2 million people with Medicare have saved over $3.9 billion on prescription drugs in the Medicare Part D donut hole since the law was enacted.  In the first half of 2012, over 1 million people with Medicare saved a total of $687 million on prescription drugs, averaging $629 per person this year. 

Looking ahead 

Coverage for both brand name and generic drugs in the coverage gap will continue to increase over time until 2020, when the coverage gap will be fully closed.  This year, people with Medicare received a 50 percent discount on covered brand name drugs and 14 percent coverage of generic drugs in the donut hole. 

In 2013, Medicare Part D’s coverage of brand name drugs will begin to increase, meaning that people with Medicare will receive a total of 52.5 percent off the cost of brand name drugs (a 50 percent discount and an additional 2.5 percent in coverage) and coverage for 21 percent of the cost of generic drugs in the donut hole.