8 replies »

1. @ john ballard

   I have a professional grasp of Medicare but not of exchanges. My only knowledge of exchanges is that I was forced onto the Massachusetts exchange by the effects of RomneyCare (my insurer stopped selling direct to individuals but only through brokers because fo RomneyCare rules and restrictions). The Massachusetts exchange is a nightmare. Think of all the joke punchines you’ve heard about the DMV being in charge of your healthcare and double them. Luckily, only about 3% of Massachusetts residents have to deal with the RomneyCare exchange and — personally — I only had to deal with it for a year prior to going on Medicare.

   That being said, your description of exchanges seems to be what happens here in Massachusetts except for all the rigamarole of going through the welfare system. The RomneyCare exchange is not really about selling insurance but about giving it away free or highly subsidized under all the onerous government BS you can imagine. Therefore even if you simply want to buy insurance full price paid for out of your pocket, you are pushed into the welfare system. In addition, as I understand it, the federal government will decide what is covered under PPACA, not the individual states.

   I have the impression that you think this exchange idea somehow applies to Medicare (you say “old Medigap policies”) but to the best of my knowledge it does not. However in a sense, Medicare is a precursor to the idea because the CMS highly regulates its four plans and Medigap plans in terms of what is covered, etc. And — as I said above — the Part C and D Medicare Plan Finder works something like the Massachusetts exchange web site. (But both are pretty bad in terms of software and user friendiness if you’re used to something like Amazon or Facebook; they are more like the old travel reservation systems of the 1970s; sounds like you and go back away

2. Thanks for your followup. Sorry if I sounded prickly. I think we’re pretty much on the same page.

   I sense you have a professional grasp of what is meant by “exchanges.” I have come across the name of Alain Enthoven and tried to figure out how that exchange concept works but I’m still not clear. See if this is close—

   Apparently every individual state is charged with formulating a slate of insurance plans, each of which is plainly defined regarding what is and is not “covered” and to what degree, co-pays, OOP max, etc. Private insurance companies are then invited to market any, some or all of those plans in the same way that the old alphabet Medigap policies were done. (And apparently the newer plans N and L are a latter-day addition to the others.) Of course the plans will conform to the new constraints — no rescission, no exclusions for pre-existing conditions, and I’m not sure about annual or lifetime caps. Do I have that right or does “exchanges” mean something else?

3. Nothing snarky meant by “mentality.” I’ve been in an HMO for 30 years (back when the clinic/hospital/insurance administrator were all one legal entity). Both conceptually and philosophically, it makes sense to me.

   [And for me… I basically have the same doctors/resources/benefits post-65 (that is, on Medicare) as I had pre-65, except that as a self employed person my monthly premium has gone from $850 a month for most of 2011 to $146 a month in 2012.]

   That clinic/hospital/insurance administrator all-in-one mindset (better word than mentality?) is what PPACA (and I mentioned Dr. Berwick only because you did) wants for everyone…

   … except for those on Medicare. As it is currently written, the PPACA exhanges do not involve Medicare beneficiaries, although you could think of the Medicare C/D PlanFinder on medicare.gov as an exchange.

4. Thanks for that. And you’re correct, the PPACA packaged ACO is in fact the old HMO reincarnated. (But I find that snarky use of the word “mentality” somewhat off-putting.) Of that I’m well aware.

   I like your shorthand about the Plan A/B/Gap/D bundle versus the A/B/C bundle although it makes Original Medicare look like the wrinkled old relic it is compared with the newer model. It’s too soon to tell which will be the better deal in the long run. The result will turn on whether Medicare can lob off enough wasted resources to compete with the administrative expenses + corporate profits + marketing + sales bonuses of the private sector. I admit it’s a toss-up. I think about it every time I see one of those ads for “free” motorized wheelchairs on TV or the inventory of durable medical equipment at various places where I am sometimes assigned as a care-giver. (I doubt they were there gratis from private insurance but I could be wrong.)

   The confusion about our Medigap choice is understandable. I had a hard time digesting it myself. Of your list of possibilities, we fell under the “plan …stops giving care in your area” subset and so were able to have what you properly call “guaranteed issue” for the Medigap plan of our choice. (I have a hard time speaking “insurance” cuz my vocabulary is so imprecise. Those buzzwords, acronyms and catchy shorthand sure make it easier to communicate once you get the hang of it.) We selected Plan N which the insurance man said was the newly minted non-MA alternative for folks who still preferred — what was it — that A/B/Gap/D bundle you mentioned.

   I expect this transition period to be inconclusive at least until a few years after the exchanges come into play. That would be about 2020 or after. And by then my wife and I will be pushing eighty if we are still around. I’m not confident that in the meantime our collective national net worth will be such that most of us may fall into the Medicaid net before then. I don’t know if you’ve checked lately, but except for a comfortable upper crust individual net worth is eroding pretty fast.

5. @John Ballard

   You cover a lot of ground above.

   First of all, to sign up for Plan C, you have to buy into the HMO concept, conceptually and ideologically. If you don’t have the PPACA/Dr. Berwick mentality (after all, HMO… ACO = the same thing), Plan C is not for you.

   Second, if you travel a lot, live in different places at different times of the year (e.g., snobird), like to do the research to figure out who to go to in your geography for a cardiology/opthamoloy/endricology/etc. exam (are the type that is able to decide yourself if you even need a cardiologyopthamoloy/endricology/etc exam), etc. … then Plan C is not for you.

   Third (although most important), if you like your doctor, and he or she doesn’t take a Plan C… (ditto for nearest hospital, etc.), then Plan C is not for you.

   But if you get past those three decision points, you should do a lot better financially than “a wash” on a Plan A/B/C bundle than a Plan A/B/Gap/D bundle… on average Every county is different but given the average prices, A/B/C bundles — with fairly average co-pays etc. — come in under $200 a month whereas a A/B/Gap/D bundle — with no co-pays in the Gap plan you pick — will run you over $300 a month. In my county, the difference is twice that, over $2400 a year for my wife and I… each. It takes a lot of co-pays to eat up that savings (and in my county, and I think my state, the OOP limit is $3400 so the most I can “lose” is $1000). But I agree, the ZERO premium Plan Cs typically have some kind of gotcha. Basically you have to do the math.

   Finally, you were not clear about the details of your “second year” and what you said about “Medigap underwriting, etc.” Also not clear about what years you were talking about (before the latest Plan C rules changes?). But currently if the situation you loosely described happened
   — you would get guaranteed issue back onto the same Medigap you were previously on during the first year on the Plan C if you were unhappy with the Plan C (e.g., your doctor dropped it, the math changes, etc.); if you had not been on a Medigap plan because this was your first year on Medicare, you could choose any Medigap plan in this first year of Plan C
   — Also you have guaranteed issue into a Medigap plan if “You are in a Medicare Advantage Plan, and your plan is leaving Medicare or stops giving care in your area, or you move out of the plan’s service area.” (see http://www.medicare.gov/find-a-plan/staticpages/learn/rights-and-protections.aspx)
   — the current “Medicare and You” also says you have the right to “buy certain Medigap plans” if you disenroll from a Plan C during the annual 1/1-2/14 Plan C disenrollment period (but there might be a gotcha in the word ‘certain’)
   — I am no sure about the latter because it is not an issue in my state; we have guaranteed-issue/continuous-enrollment MediGap (can you guess where I live and it’s not landlocked :)).

6. “…25% of Medicare recipients belonged to a Part C plan last year but only used 21% of the Medicare funds expended.”

   I had no idea the number was that high. My wife and I were MA the first year we qualified because the premium was ZERO! She had a hospital stay and after doing the arithmetic we figured it would have been a wash with a traditional Medigap policy with a premium.

   We had to go with traditional Medicare the second year because there were no MA plans offered where we live. We were advised that had there been an Advantage alternative we would have to be approved by underwriters to go back to traditional Medicare with an old-fashioned Medigap supplemental policy. When we learned that we decided to remain with Medicare.

   I doubt most of those with MA plans fully appreciate the limits until it becomes too late. And there will have to be limits, even with the new requirements of PPACA. The private sector is busy kidnapping Medicare beneficiaries, knowing that they are in a heads-I-win, tails-you-lose position.

   The disbursement comparison (MA vs traditional Medicare) speaks volumes about how much can be cut from Medicare without any harm to care. Dr. Berwick was only there a short time and came up with five bullet points worth tons of potential savings.

   I knew the ACA was a creature of the insurance industry, sensing that as parasites they were about to kill the host. (Hence the individual mandate and blocking of any public option.) I didn’t think the takeover would be so soon. Boy, those guys are quick as piranhas. HMOs redux, this time with no escape. But with plenty of corporate profitability.

7. The so-called per-capita cost is not the way to look at Part C. It is just a Congressional accounting device, like a CBO projection. The meaningful statistic is that 25% of Medicare recipients belonged to a Part C plan last year but only used 21% of the Medicare funds expended.

8. I will be posting on this topic shortly. A lot of the “gap” (which is supposed to be getting phased out of existence anyway) is due to the $500-to-$1000 acquisition cost/member. Vouchers won’t solve this problem since health plans will still have to compete for members.

   A lot of the remaining gap is profit — these MA plans can be very profitable.

   My posting suggests having health plans bid to become the default plan in their counties. People can still use the FFS option but it will no longer be automatic. (They can also pick another health plan.)

   Both the member acquisition cost and the profit (at taxpayer expense) will go way down if health plans bid for the right to be the default plan for people turning 65 every year.