Part B Costs More For Persons With Higher Income

The premium for Medicare Part B is $93.50 in 2007 for most people, but people with higher income will pay more for Part B beginning this year.  

Single persons who file an individual tax return showing income greater than $80,000, or married persons filing a joint tax return showing income greater than $160,000 will pay the higher premium.  Though income reported in 2005 will be the income used to make this determination, Social Security can use income from a year of lower income within the last three years.

Premium costs are the following:

Individual Tax Return       Joint Tax Return         Premium

$80,000 or less              $160,000 or less         $93.50

$80,001 - 100,000           $160,001 - 200,000     $105.80 

$100,001 - 150,000         $200,001 - 300,000     $124.40

$150,001 - 200,000         $300,001 - 400,000     $142.90

Above $200,000              Above $400,000          $161.40                      

Medicare Expects To Recoup $4 Billion In Part D Expense

On October 5, 2007, The Center for Medicare and Medicaid Services issued a press release indicating that Medicare expects to recover $4 billion from Part D plans following the 2006 plan reconciliation. Te press release follows:

The Centers for Medicare & Medicaid Services (CMS) announced today that the agency will collect $4 billion from Part D drug plan sponsors due to lower-than-expected drug costs in 2006, the first year of the Medicare drug program. This collection results from the payment reconciliation that CMS has completed for 2006, including the application of risk sharing created under the Medicare Modernization Act (MMA).

For the 2006 contracting year, Medicare will be collecting funds from plans due to the fact that actual drug costs for almost all Part D plans were below expected levels in their 2006 bids. A number of factors led to this lower spending, including the fact that 2006 marked the first time that plans were bidding on the new Part D program and the fact there are higher levels of generic drug utilization in Part D than anticipated. Plans submitted their bids for the 2006 contracting year in June 2005. At the time, there was limited information available with respect to the costs associated with beneficiary utilization in the new prescription drug benefit or the number of beneficiaries who would enroll. The 2006 bids, despite being developed based on the plans’ best expectations and having been extensively reviewed by the CMS Office of the Actuary, were nevertheless somewhat uncertain predictions of what would actually happen when the drug benefit began in 2006.

Part D payments to plans are designed to be adjusted for the actual experience of the Part D program. Under the MMA, CMS is required to pay the plan sponsors prospectively based on their bids, and can only complete a final reconciliation of accounts after the end of the calendar year. Final payment reconciliation involves several different activities. For example, monthly subsidies paid by Medicare for low-income beneficiaries and for individuals who incur catastrophic spending are paid on a prospective basis based on estimates in each plan’s bid. After the end of the contracting year, when all the claims data are available, the prospective payments are compared to actual incurred costs and other related data, and appropriate adjustments are made to the plan payments. In addition, monthly premium subsidy payments to the plans are adjusted at the end of the year to reflect updated data about beneficiary health status and enrollment.

By statute, risk sharing limits the unanticipated losses or unexpected gains by Part D plans. For the first two years of the Part D program, if a plan’s drug spending is 2.5 percent or more higher than projected, Medicare makes additional payments to cover a portion of the unanticipated costs. If drug spending is 2.5 percent or more below the levels projected in a Part D plan’s bid, Medicare recoups a portion of the unanticipated cost savings. These risk corridors, which apply during the first two years of the Part D program, reflect the intent to not only mitigate plan risk through additional reinsurance, but also to assure that during the initial years of starting the new benefit, taxpayers would share more fully in any unanticipated savings.

Plans can appeal the final reconciliation calculation by contacting StrategicHealthSolutions, LLC by October 22, 2007. SHS will perform follow-up analysis of any disputed matters; the final decision on reconciliation issues will be made by CMS.

CMS expects that, as plans have further experience with the Part D program, their bid submissions will in future years will more accurately anticipate their actual costs to provide prescription drug coverage. In fact, the 2007 bid submissions were significantly lower than those submitted in 2006 and were a reflection of the actual 2006 Part D drug program experience. Accordingly, CMS anticipates that amounts collected from or paid to plans in future years as a result of final reconciliation and risk sharing will be significantly lower than the reconciliation for the 2006 plan year.

Beneficiaries in the Part D program continue to enjoy excellent value and consumer choice, due in large part to strong competitive bidding by plans. As previously reported, the actual average premium paid by beneficiaries for standard Part D coverage in 2008 is expected to be nearly 40 percent lower than originally projected when the benefit was established in 2003. Further, the program is 30 percent less expensive overall for the first 10 years than originally estimated.

CMS recently launched the 2008 national enrollment campaign. Working with State health insurance assistance programs (SHIPs) and other partners, this year's campaign is targeted toward beneficiaries with limited means who are eligible for additional assistance. The 2006 plan reconciliation, the 2008 enrollment campaign, and all other parts of the agency’s efforts related to Part D are focused on fine-tuning the program to assure that it continues to deliver high value and lower costs to seniors and taxpayers.

Low Income Subsidies Help Pay for Prescription Drug Costs

The following is an article prepared by the U.S. Department of Health and Human Services:

Centers for Medicare & Medicaid Services National Medicare Multi-Media & Education Campaign Start Saving on Your Prescription Drugs

Are you having trouble paying for prescription drugs? If you are and you have Medicare, there is extra help available and you may be eligible. And, if you think you won’t qualify for it, think again. One woman with Medicare was struggling to pay for her prescriptions even with a drug plan and her $800 Social Security benefit. She talked to Monica, a counselor at the local State Health Insurance Information Program (SHIP) in Louisiana. Once she heard that the value of her house, as long as she lived in it, would not be used when determining her qualification for the extra help, she applied and qualified. She was very grateful for the extra help. This extra help — available by applying and qualifying through Social Security — can pay for part of your drug costs, for example monthly premiums, annual deductibles, and prescription co-payments. The extra help could be worth more than $3,300 per year. Many people with limited income and resources qualify for these big savings and they don’t even know it. So, be a smart consumer, and don’t walk away from this extra help. You must apply to find out if you qualify for the extra help. Apply online at http://www.socialsecurity.gov/, call Social Security at 1-800-772-1213 (TTY 1-800-325-0778), or go to the nearest Social Security office for assistance. To qualify for extra help in 2007, your income should be no more than $15,315 for an individual or $20,535 for a married couple. Your income limit may be higher if you or your spouse support other family members who live with you or if you live in Alaska or Hawaii. Your resources (like bank accounts, stocks and bonds) can’t be more than $11,710 for an individual or $23,410 for a married couple. Remember, your house and car don’t count toward resources.

To learn more about the Medicare prescription drug plans and when you can join, call 1-800-MEDICARE (1-800-633-4227; TTY 1-877-486-2048) or visit http://www.medicare.gov/. Get the most out of your Medicare benefits! This information prepared by the U.S. Department of Health and Human Services.

Medicare Enrollment Periods

When to enroll in various parts of Medicare can be confusing, especially in light of all the acronyms used by the Medicare program today. A person on Medicare who does not act carefully and with correct information may lose needed benefits. The following dates and information should help clear up some of the confusion. However, if you have questions about enrolling in a plan or changing plans call your area agency on aging at 1-800-AGELINE and ask for a State Health Insurance Counselor.

At a bare minimum, you need to know the following:

Initial Enrollment Period (IEP)

Initial enrollment in Medicare occurs during a seven month period spanning three months prior to, the month of, and three months following a person’s 65^th birthday. People may be automatically enrolled in Part A, but they must make a decision about participating in Part B, C and D. Part B coverage begins the month of eligibility for the person who enrolls in Medicare Part B during the first three months of the initial enrollment period, and Part B coverage begins from one to three months after enrollment for the person who enrolls during the last four months of the initial enrollment period.

Annual Coordinated Election Period (AEP)

The Annual Coordinated Election Period runs from November 15 through December 31 each year. During this time beneficiaries may change prescription drug plans they have under Medicare Part D, enroll in or change from one to another Medicare Advantage plan under Medicare Part C or return to original Medicare. Those who enroll for the first time in a Part D plan will pay a penalty consisting of an increase in premium cost of 1 percent for each month he or she was eligible but did not apply for Part D during the initial enrollment period. Any changes made during the Annual Coordinated Election Period go into effect on January 1.

General Enrollment Period (GEP)

A person who did not enroll in Part B when he or she first became eligible for Medicare may elect Part B coverage during the General Enrollment Period, which extends from January 1 through March 31of each year. Enrollment becomes effective on July 1 of the same year. A lifetime penalty will be imposed, however, making the monthly premium 10 percent higher for each 12 month period the person did not enroll in Medicare Part B.

Open Enrollment Period (OEP)

During 2007 the Open Enrollment Period provides Medicare beneficiaries with one opportunity to enroll in, disenroll from, or change a Medicare Advantage plan. The only limitation on changing Medicare Advantage plans is that if a person’s existing Medicare Advantage plan provides prescription drug coverage, he or she may only switch to another plan with prescription drug coverage, and if the existing plan has no prescription drug coverage, then he or she can switch to another Medicare Advantage plan that does not provide drug coverage. Like the General Enrollment Period, the Open Enrollment Period extends from January 1 through March 31 during 2007. Unlike enrollment in Part B, the change in Medicare Advantage enrollment or disenrollment becomes effective the month after the change is made.

Limited Enrollment Period (L-OEP)

Congress created a new enrollment period for 2007 & 2008, the Limited Open Enrollement Peroid. The Limited Open Enrollment Period allows someone in Original Medicare to enroll in a Medicare Advantage plan without drug coverage at any time of the year (or a private-fee-for-service plan with drug coverage). Enrollment becomes effective the month after the choice is made. A beneficiary in a Medicare Advantage plan without drug coverage may not use the Limited Open Enrollment Period to return to Original Medicare. The Centers for Medicare & Medicaid Services (CMS) has indicated that beneficiaries who use the Limited Open Enrollment Period to join a private fee-for-service plan without drug coverage will be able to keep their stand alone prescription drug plan (PDP). However, those who use the limited open enrollment period to enroll in an HMO, local PPO, or regional PPO that does not offer drug coverage will lose their prescription drug coverage. Beneficiaries who lose drug coverage as a result of a choice made during the Limited Open Enrollment Period will be assessed a late enrollment penalty on their Part D premiums for any month in which they did not have drug coverage.

Special Enrollment Peroid (SEP)

People on Medicare who delay enrolling in Part B because they are covered by employer-sponsored health insurance as an active worker or as a dependent of an active worker have a Special Enrollment Period during which to enroll in Medicare Part B without incurring the penalty for late enrollment. This Special Enrollment Period runs for eight months from the time they (or their spouse) retire or they lose their health insurance coverage. Part B coverage starts the month after the election is made.

A number of Special Enrollment Periods exist for Medicare Advantage and Prescription Drug Plan exceptional circumstances. For example, someone who moves out of a Medicare Advantage Plan or PDP service area has an SEP to enroll in a plan that serves their new home. Beneficiaries who move into, reside in, or move out of a nursing home may also have a SEP. Individuals who are eligible for Medicare and Medicaid have an SEP that allows them to change Part D drug plans at any time. CMS has the authority to create SEPs for exceptional circumstances. For instance, on June 15, 2007, CMS announced an SEP exceptional circumstance for beneficiaries. This SEP is for individuals who have enrolled in Medicare Advantage Plans or Private Fee-For-Service plans based on misleading or incorrect information provided by plan employees, agents or brokers. Persons in this situation should call 1-800-MEDICARE to see if they qualify for this SEP.

Problems Paying the Part D Premium

Since Medicare Part D to pay for prescription drugs came into existence, people who select a plan have had the option to pay the premium directly to the insurance company or to have the premium withheld from his or her Social Security check.

While automatic deduction from the Social Security check seems to be the easiest way to go, it is now appearing that it might not be.  A number of computer errors have caused problems for people who have the Part D premium deducted from the Social Security check.  In the early days of Part D, some payments of the automatically deducted premiums were not sent to a particular insurance company, resulting in plan members receiving notices of disenrollment.  While this problem was corrected, computer errors continue to cause problems for people having their premiums deducted from the Social Security check.  Some people are having too much money deducted, and others are not having enough deducted, while others are having nothing deducted.  On some occasions payments deducted have been paid to the wrong plan.  We have seen at least one person in Alabama who left a plan last year, yet the premium continues to be deducted from the Social Security check. 

The US government is working to correct the problem, but in the meantime, people who have this problem spend countless hours of frustration trying to get it straightened out.

If you have automatic deduction of the premium from your Social Security check, in order to protect yourself, check your bank records to make sure the correct amount of your premium is being withdrawn.  If you run into a problem, call your prescription drug plan to make sure your coverage is in place and to confirm that the plan has the correct information it needs to make the correct deduction.  In the last analysis, the best option may be to switch to direct payment of the premium.  Although you have to remember to pay the bill each month, most companies provide a coupon booklet and envelopes to make payment easier, and you can never trust anyone to handle your business as well as you will handle it yourself.  

For further assistance call the Social Security Administration at 1-800-772-1213.  

Medicare Approved Preventive Services

Over the years Medicare has increasingly covered preventive health care services.  Here we will look at those services.

During the first six months a person is covered by Medicare B, Medicare will pay for a one-time preventive physical exam, called the Welcome to Medicare examination.  This examination permits the doctor to take a patient's medical and social history and look at preventive services the patient may need, such as screenings and shots.  Normal general examination services are included, such as blood pressure, weight, height, EKG, and a simple vision screening test.  If needed, further tests may be ordered. 

The Welcome To Medicare examination should provide the patient with education an counseling about modifiable risk factors for disease, and he or she should leave with a written plan, such as a checklist, including which screenings and other preventive services the patient should get.

New for 2007, during the Welcome To Medicare examination, some people at risk for abdominal aortic aneurysms may be referred for a one-time ultrasound screening.  To qualify for this screening the person must:

• have a family history of abdominal aortic aneurysm
• be male
• be age 65 to 75 and
• have smoked 100 cigarettes during his lifetime.

For the Welcome To Medicare examination, the patient pays the Part B 20 percent that Medicare does not cover after meeting the yearly deductible of $131 (2007).

It is simply not possible for all people covered by Medicare to memorize all of the preventive services that are covered by Medicare.  The Welcome To Medicare examination is a great way for a new Medicare beneficiary to get off on the right track with preventive health services and to become familiar with services that are available.  It is particularly important because many people are unaware of Medicare's expanding coverage of preventive services because Medicare originally did not provide preventive services.

At a bare minimum, all people on Medicare need to know that preventive services exist in the areas bolded below so that they can look up the requirements and talk with their doctors about the available services:

• Cholesterol screening every five years (known as cardiovascular screening);
• Mammograms for women every 12 months;
• Pap and pelvic exams for women every 24 months (women of childbearing age who are on Medicare may have these exams covered every 12 months if they have had an abnormal test with the past 36 months or if the doctor states that the patient is at high risk for cervical or vaginal cancer);
• Colorectal cancer screening for people on Medicare who are over age 50 to include fecal occult blood test once every 12 months, flexible sigmodoscopy once every 48 months, screening colonoscopy once evry 120 months (high risk every 24 months), and barium enema once every 48 months (hight risk every 24 months);
• Prostrate cancer screening for men on Medicare over age 50 to include digital rectal examination and (Prostate Specific Antigen) once every 12 months;
• Flu shots for people on Medicare once every fall or winter;
• Pneumococcal shots for all people on Medicare once per lifetime;
• Hepatitis B shots for all people on Medicare whose doctor states that they are at high risk for hepatitis;
• Bone mass measurements once every 24 months (or more often if medically necessary) for all people on Medicare whose doctor states that they are at high risk for oseoporosis; 
• Diabetes screening to include fasting blood glucose test up to two times per year for all people on Medicare whose doctor states that they are at risk for diabetes
• Diabetes glucose monitors, test strips and lancets for all people on Medicare who have diabetes;
• Diabetes self-management training for certain people on Medicare who are at risk for complications from diabetes if their doctor requests this service;
• Medical nutrition therapy for people on Medicare who have diabetes or renal disease when referred by a doctor;
• Glaucoma testing for all people on Medicare whose doctor states that they are at high risk for glaucoma;
• Smoking cessation counseling for all people on Medicare who are diagnosed with a smoling related illness or are taking medications that may be affected by tobacco.