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News September 2016

Washington Watch

Medicare and Health Care Insurance Snags, Traps, Escalating Costs, And Surprising Bipartisan Potential Solutions

By Alan M. Schlein

One of the biggest criticisms of high-deductible plans is that instead of pushing people to be careful, cost‑conscious health care consumers, these plans force people to avoid care altogether. Instead, this [proposed legislation] inches toward the idea of a value‑based policy.

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Only days after Judy Hanttula came home from the hospital after surgery last November, her doctor’s office called with bad news. Records showed that instead of traditional Medicare, she had a private Medicare Advantage plan. The shock was that her doctor and hospital were not in its network. That meant that neither the plan nor Medicare would cover her medical costs. Her “seamless conversion” was going to cost her $16,622.

Rep. Diane Black, a Tennessee Republican congresswoman, and Earl Blumenauer, a Democratic congressman from Oregon, don’t agree on very much about health care.

Both sit on the powerful House Ways and Means Health Subcommittee and both tend to vote on the opposite side of most health care issues. Black, a nurse by training, has called President Barack Obama’s Affordable Care Act an “abject failure” which she argues was “built on a grand deception.”

Black’s dislike of liberal health care policies is well known. She’s best known on Capitol Hill for her hardline anti‑abortion stance. Earlier this year, she authored the Conscience Protection Act, a bill, approved by the House 245‑182 preventing discriminating against a health care provider based on the provider’s refusal to be involved in or provide coverage for abortion. Black is also well known for her role as a member of the controversial Select Investigative Panel on Infant Lives, a House committee formed in the wake of last summer’s Planned Parenthood sting videos.

Blumenauer, on the other hand, is an environmental crusader who is known for cycling from his Washington residence to the U.S. Capitol and occasionally to the White House for meetings. A strong supporter of the President’s Affordable Care Act, Blumenauer says “it is absolutely a step in the right direction,” and has strongly criticized Republicans’ efforts to dismantle the health care law as “a disappointing political stunt.”

His biggest accomplishment since winning the Portland, Oregon, district in 1996 has been getting Congress to approve giving veterans the right to discuss medical marijuana as a treatment option with the Veterans Affairs doctors in states where it is legal. He tried repeatedly to persuade Medicare to reimburse doctors for talking with seniors about their wishes for end‑of‑life care, and during the 2009 Obama health care fight, it was his amendment that then‑Republican-vice-presidential candidate Sarah Palin labeled “death panels,” killing the amendment. But earlier this year, Congress finally passed a version of the legislation.

So getting Black and Blumenauer to agree on anything related to health care is noticeable. They’ve gone much further than that, co‑sponsoring the Access to Better Care Act which would change the tax code to increase access to chronic disease treatment by allowing what can be covered under high-deductible health plans before people have met their deductible. This would only apply to people with health savings plans.

Chronic conditions are particularly costly and hard to cover. Currently Treasury Department regulations provide certain types of preventive care to be covered for free or at a reduced cost before the deductible is met. But that exemption does not apply to “any service or benefit intended to treat an existing illness, injury or condition.”

That means lots of people who are in high‑deductible policies and have expensive chronic diseases, like heart disease or diabetes, have to pay the full cost to manage their conditions, and of course could also be exposed to unaffordable out of pocket costs. The bipartisan legislation would change that, allowing coverage of exams, prescription drugs and other services for people who have chronic conditions and are enrolled in high‑deductible health plans.

The lawmakers and advocates across a wide spectrum of the health care world are hopeful this proposal will ease growing consumer anxiety over higher medical deductibles. One of the biggest criticisms of high-deductible plans is that instead of pushing people to be careful, cost‑conscious health care consumers, these plans force people to avoid care altogether. Instead, this inches toward the idea of a value‑based policy.

An increasing number of employers are pushing their employees into high‑deductible plans and by far, they are the most common in the ACA’s individual and small group markets, because they cost the consumer less out of pocket. But for anyone with a chronic illness, these plans can become a financial nightmare.

America’s Health Insurance Plans, the insurance industry trade group, says almost 20 million people had a high‑deductible health plan paired with an HSA (health savings account) in 2015, a 13 percent increase from 2014. HSAs were built into Medicare in the legislation that expanded prescription drug coverage under former President George W. Bush in 2003.

Not only are Black and Blumenauer working together, but in an election year in which Congress rarely accomplishes much, the bill has added fuel behind it with strong support from an unusual coalition of traditional political adversaries. The American Heart Association, the liberal consumer group Families USA, and pharmaceutical giants like Pfizer and Merck & Co. are among groups that have endorsed the bill. Even AHIP and the Blue Cross and Blue Shield Association, which represent the largest health insurance companies in the country, have also praised the Black‑Blumenauer proposal.

“Given that 86 cents of every health care dollar is used to treat chronic conditions, it makes sense to remove barriers that make it harder for health plans to cover clinically proven services that help manage chronic conditions and improve quality of life,” argued the American Benefits Council President James A. Klein, adding his group’s support of the legislation. “We need more common sense bills like this one,” he said.

The bill has a more promising chance of becoming law because it represents one of the rare areas where common ground can be found on any health care legislation. “Many families don't have the financial reserves to cover the full cost of a high‑deductible health plan,” Lydia Mitts, a senior policy analyst at Families USA told Modern Healthcare recently. “We want to make sure all types of coverage are being able to do more to help people with chronic conditions.”

But Mitts was quick to add that her liberal‑leaning organization is still “not a fan” of health savings accounts, a favorite of conservatives in Congress, because they “do not provide adequate protection for many families.” HSAs often are more beneficial for wealthier people and families who have more disposable income so they can take the tax advantages. Older, sicker and lower‑income people usually have less money to set aside for an HSA.

What remains unclear about the proposed legislation is how much it will cost, since the Congressional Budget Office has not yet reported its score for the bill yet. That will play a big factor in determining its’ legislative success. But the positive buzz the legislation is receiving on Capitol Hill is expected to get similar legislation moving in the U.S. Senate as chronic conditions are driving long‑term health costs.

 

So Which Medicare Plan Do You Think You Signed Up For? Which One Did You Actually Get Enrolled In?

Many seniors are finding themselves automatically enrolled in Medicare Advantage plans, instead of the traditional Medicare they thought they were enrolled in. That’s because with Medicare’s specific approval, a health insurance company can enroll a member of its marketplace or other commercial plan into its Medicare Advantage coverage when that individual becomes eligible for Medicare. They call this device “seamless conversion,” and it requires the insurer to send a letter explaining the new coverage, which takes effect unless you opt out within 60 days.

But as Kaiser Health News reported recently, it has certainly shocked a lot of Medicare patients. Only days after Judy Hanttula came home from the hospital after surgery last November, her doctor’s office called with bad news. Records showed that instead of traditional Medicare, she had a private Medicare Advantage plan. The shock was that her doctor and hospital were not in its network.

That meant that neither the plan nor Medicare would cover her medical costs. Her “seamless conversion” was going to cost her $16,622. “I was panicking,” said Hanttula, who lived in Carlsbad, New Mexico at the time.

After more than five hours of making phone calls, she found out what had happened. She had started with individual coverage through Blue Cross Blue Shield when she became eligible for Medicare but the company had automatically signed her up for its own Medicare Advantage plan after notifying her in a letter. Hanttula thought it was junk mail and ignored it like all the mail from insurers because she thought she had chosen traditional Medicare, she told Kaiser Health News Susan Jaffe recently. “I felt like I had insured myself properly with Medicare,” she said. “So I quit paying attention to the mail.”

When asked about which companies have sought or received this kind of approval or how long this “seamless conversion” has been going on, Medicare officials refused to say how long the Centers for Medicare & Medicaid Services has allowed this practice. Many of the big insurers, including Cigna, Anthem and other Blue Cross Blue Shield subsidiaries also decline to discuss whether they are automatically enrolling beneficiaries as they turn 65. But many companies are happy to discuss their use of this practice.

Aetna has announced it will soon start practicing this for its marketplace members in 17 Florida counties beginning in November. Aetna members will get 90 days advance notice and a postcard they can mail back, an Aetna spokesman told Kaiser. In addition Aetna plans to make a followup phone call to make sure people understand the change. United Healthcare also plans to start automatically enrolling members of its Medicaid plans in Tennessee and Arizona into its
Medicare Advantage plans, a spokeswoman said. Humana, the nation’s second largest Medicare Advantage provider has asked Medicare for permission to also do auto‑enrollment. A Humana spokesman told Kaiser that auto‑enrolling will benefit people who want to stay with the same insurance company by simplifying administration.

Medicare officials say they are developing a procedure for reviewing seamless conversion requests as well as a system to monitor implementation. A company given approval must automatically enroll all Medicare‑eligible beneficiaries. But because federal law prohibits marketplace insurers from dropping a member who qualifies for Medicare, both marketplace and Medicare Advantage coverage will continue until the person cancels the marketplace, Medicare spokesman Raymond Thorn explained.

That’s not going to make some Medicare beneficiaries happy. Sally Thomphsen, who lives outside Chicago and had an individual Blue Cross Blue Shield policy last year was stunned when she was notified that she would be in a Medicare Advantage plan when she turned 65. Printed on the member card she received was the name of her new primary care physician, someone she didn’t know.

“I almost hit the ceiling,” said Thomphsen, who had already enrolled in traditional Medicare and demanded that Blue Cross cancel her enrollment in Medicare Advantage. When she reached out to her local advocacy group, Age Option, she found out that she was not alone. The issue has prompted concern on Capitol Hill, by lawmakers like Rep. Jan Schakowsky, D‑Ill., who serves on the Energy and Commerce Committee Subcommittee on Health. Schakowsky says she is considering pushing for stronger consumer protections for seniors, something like requiring Medicare to let consumers “opt‑in” to Medicare Advantage instead of automatically being switched over from traditional Medicare when they turn 65.

Hanttula finally solved her problem with help from a Medicare counselor in her new home state of New Mexico and from the Center for Medicare Advocacy in Washington DC. After explaining that she was enrolled without her knowledge, Medicare disenrolled Hanttula from her unwanted plan and restored her traditional Medicare coverage and more important, agreed to cover her medical bills.

David Lipschultz, a senior attorney at the Center for Medicare Advocacy, who helped her said giving beneficiaries the change to opt out doesn’t go far enough. An insurer’s notification letter can easily be mistaken or overlooked in the deluge of marketing materials seniors receive when they turn 65. “The right to opt out doesn’t exist if they didn’t get the notice or if they did get the notice but didn’t understand it,” he told Kaiser Health News recently.

 

[Also contributing to this story were Kaiser Health News, Business Insurance.com, and Modern Healthcare.com]

Alan Schlein runs DeadlineOnline.com, an internet training and consulting firm. He is the author of the bestselling “Find It Online” books.

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