Medigap Plans Research Articles

Out-of-pocket cost modeling of adjuvant radiation therapy duration in standard-of-care treatment of glioblastoma across Medicaid and Medicare plans.

2045 Background: The optimal radiation treatment (RT) length (6 weeks of 60 Gy in 30 fractions versus 3 weeks of 40 Gy in 15 fractions) for older adults with glioblastoma is debatable, with Level 1 evidence (PMID 15051755) revealing no difference in survival between RT regimens. However, there remains a paucity of evidence describing the role of insurance on out-of-pocket (OOP) costs for patients undergoing varying lengths of RT. This project aims to quantify expenses by insurance plans, enhancing transparency in treatment cost understanding. Methods: We utilized the National Comprehensive Cancer Network guidelines to determine the standard treatment protocol, including 30-fraction or 15-fraction RT with concurrent and post-radiation temozolomide for 12 cycles. The model assumes a Medicare- and/or Medicaid-eligible patient ≥ 65 years of age with glioblastoma. The total aggregate out-of-pocket (OOP) costs were determined from the sum of treatment costs, deductibles, and copays/coinsurance based on Medicaid, Original Medicare, Medigap Plan G, and Medicare Part D Rx plan over a two-year time horizon (not adjusted for inflation). All procedures were assumed to take place within the premises of an Ohio hospital. Results: Treatment charges include neurosurgery, neuro-oncology, and radiation oncology initial consultation, follow-up visits, diagnostic head CT, MRI, craniotomy with maximum safe resection, surveillance brain MRI, temozolomide, antiemetics, prophylactic TMP-SMX, weekly CBC, and tumor treating fields. RT-specific treatment charges include treatment planning, simulation and verification, RT delivery, and on-treatment visits. Original Medicare beneficiaries face an OOP cost of 20% for Medicare Part B claims with no cost cap for approved procedures after the deductible. Medications are covered under Medicare Part D with copays. This results in a total OOP treatment charge of $4,454.01 for 30 fractions and $3,913.86 for 15 fractions. Medigap Plan G beneficiaries face a total OOP charge of $2,387.22 for 30 fractions and $2,369.61 for 15 fractions. For Medicaid beneficiaries (assuming all treatments are approved by Medicaid), all expenses are covered without limit, resulting in no OOP expense for either treatment plan. Conclusions: Three-week versus six-week RT for GBM reduces OOP costs facing patients by 10%. By understanding the financial implications, healthcare providers, policymakers, and patients can make informed decisions about treatment options, and healthcare systems can develop strategies to mitigate the economic burden associated with GBM care.

Out-of-Pocket Cost Modeling of Adjuvant Antiestrogen and Radiation Therapy After Lumpectomy for Early-Stage Breast Cancer Across Medicaid and Medicare Plans

The optimal adjuvant therapy (antiestrogen therapy [ET] + radiation therapy or ET alone, or in some reports radiation therapy alone) in older women with early-stage breast cancer has been highly debated. However, granular details on the role of insurance in the out-of-pocket cost for patients receiving ET with or without radiation therapy are lacking. This project disaggregates out-of-pocket costs by insurance plans to increase treatment cost transparency. Several radiation therapy schedules are accepted standards as per the National Comprehensive Cancer Network guidelines. For our financial estimate model, we used the 5-fraction and 15-fraction radiation therapy and ET prescribed over a 5-year duration. The total aggregate out-of-pocket costs were determined from the sum of treatment costs, deductibles, and copays/coinsurance based on Medicaid, Original Medicare, Medigap Plan G, and Medicare Part D Rx plans. The model assumes a Medicare- and/or Medicaid-eligible patient ≥70 years of age with node-negative, early-stage estrogen-receptor-positive breast cancer. Patient out-of-pocket costs were estimated from publicly available insurance data from plan-specific benefit coverage materials using a 5-year time horizon. Original Medicare beneficiaries face a total out-of-pocket treatment charge of $2738.52 for ET alone, $2221.26 for 5-fraction radiation therapy alone, $2573.92 for 15-fraction radiation therapy alone, $3361.26 for combined ET+ 5-fraction radiation therapy, and $3713.92 for combined ET + 15-fraction radiation therapy. Medigap Plan G beneficiaries have an out-of-pocket charge of $1130.00 with radiation therapy alone and face an out-of-pocket of $2270.00 for ET alone and combined ET+ radiation therapy. For Medicaid beneficiaries, all treatments approved by Medicaid are covered without limit, resulting in no out-of-pocket expense for either adjuvant treatment option. This model (based on actual cost estimates per insurance plan rather than claims data), by estimating expenses within Medicare and Medicaid plans, provides a level of transparency to patient cost. With knowledge of the costs borne by patients themselves, treatment decisions informed by patients' individual priorities and preferences may be further enhanced.

Assessing out-of-pocket cost differences in treatment for Medicare-eligible patients with favorable prognosis early-stage Hodgkin lymphoma.

15 Background: In the treatment of favorable Hodgkin Lymphoma (HL), Level 1 evidence comparing combined modality therapy (CMT) with chemotherapy alone has persistently demonstrated that obviating radiation therapy (RT) worsens recurrence rates despite no significant overall survival difference. As there remains limited evidence on the granularity of the impact of insurance on HL treatment, this project disaggregates costs by insurance plans to enhance the transparency of out-of-pocket (OOP) cost estimations in Medicaid and/or Medicare-eligible (age 65+) patients. Methods: National Comprehensive Cancer Network guidelines were queried to assess the appropriate therapy for HL. Following initial adriamycin/bleomycin/vinblastine/dacarbazine (ABVD) chemotherapy x 2 cycles with Deauville 1-2 response on PET scan, CMT was defined as involved site RT (20 Gy / 10 fractions), while chemotherapy alone was defined as an additional ABVD x 2. Current Procedural Terminology and Healthcare Common Procedure Coding System codes identified treatments. OOP expenditures, deductibles, and copay/coinsurance were computed for Medicaid, Original Medicare, and Medigap Plan G plans via medicare.gov, medicaid.oh.gov, and cms.gov. Price estimates (from actual prices per insurance plan rather than claims data predictions) assume an Ohio hospital location (zip code = 44106) for all treatments. Total costs were calculated based on all treatments plus a 5-year follow-up (not adjusted for inflation). Treatment charges for chemotherapy alone include initial medical oncology office visit, cost of ABVD x 4, and infusion costs for 4 cycles. Additional treatment charges for CMT include initial radiation oncology consultation, treatment planning, dosimetry calculations, treatment device, simulation and verification, RT delivery, on-treatment visits, medical physics consultation, and annual TSH labs. Results: With Original Medicare plans, patients are faced with an OOP cost of 20% for Medicare Part B claims with no cost cap for approved procedures after the deductible. As such, patients are faced with a total 6-year charge of $1,928.95 for chemotherapy alone, and $2,385.28 for CMT. Under Medigap Plan G, patients encounter an OOP charge of $1,151.14 for chemotherapy alone and $1,176.34 for CMT. Medicaid beneficiaries (assuming all treatments are approved by Medicaid) face no OOP expenses for both treatment plans, as all expenses are covered without limit. Conclusions: By comparing OOP costs between Medicare and Medicaid plans, this model improves cost transparency in the treatment of favorable early-stage HL. Our findings indicate that omitting RT in favor of chemotherapy alone yields a cost savings of 2-24% at a 5-year follow-up. Further studies are required to assess whether these savings compensate for the inferior outcomes achieved by omitting RT in this patient population.

Insurance Plan Coverage Modeling of the Marginal Costs from One Week vs. Three Week Radiation Therapy in Standard-Of-Care Treatment of Post-Lumpectomy Early-Stage Breast Cancer Across Medicaid and Medicare Plans

For early-stage breast cancer (BC), the choice of radiation therapy (RT) duration (1- versus 3-weeks) is highly debated. Cost and financial toxicity are major concerns that BC patients face. Nonetheless, there remain limited discussions providing granular details of the role of insurance in the aggregate cost of 1 week versus 3 weeks of RT for patients. This project addresses this gap by disaggregating costs by insurance plan to increase transparency of out-of-pocket (OOP) cost estimates in RT. Surgical, medical, and radiation oncology treatment procedures were determined through the National Comprehensive Cancer Network guidelines; codes were identified using Current Procedural Terminology and Healthcare Common Procedure Coding System. OOP treatment costs, deductibles, and copay/coinsurance were calculated in accordance with insurance type, including Medicaid, Original Medicare, and Medigap Plan G. The medicare.gov, medicaid.oh.gov, and the physician fee schedule from cms.gov were used to determine pricing. Price estimates reflect actual costs per insurance plan rather than costs estimated from claims data. All procedures were considered to be performed in an Ohio hospital setting. One-week RT was defined as 5 fractions without boost, and 3-week RT was defined as 15 fractions without boost. Treatment charges for RT included initial radiation oncology office consultation and subsequent radiation oncology clinical treatment planning notes, complex 3D treatment plan, dosimetry calculations, complex treatment device design and construction, complex treatment planning simulation, simple verification treatment simulation, complex RT delivery, port verification films, on-treatment visits with radiation oncology, and continuing medical physics consultation. Original Medicare beneficiaries face an OOP cost of 20% for every Medicare Part B charge with no cost cap for all approved procedures after the deductible is met, resulting in a marginal OOP treatment charge of $649.24 for 1 week and $1006.20 for 3 weeks of RT. Assuming the deductible is met post-lumpectomy, Medigap Plan G beneficiaries are faced with no additional charges for both lengths of radiation treatment. Similarly, for Medicaid beneficiaries (assuming all treatments approved by Medicaid), all expenses are covered without limit, resulting in no OOP expense. Considerations of 1 week and 3 weeks of RT for post-lumpectomy early-stage BC are often dependent on cancer characteristic and patient preferences. This model (based on actual cost estimates per insurance plan rather than claims data) compares OOP costs across Medicaid and Medicare plans, which more holistically informs patients in their decision for choice of treatment.

Out-of-Pocket Cost Modeling of Adjuvant Radiation Therapy Duration in Standard-of-Care Early Stage Breast Cancer Treatment Across Medicaid and Medicare Plans

For early-stage breast cancer (BC), the choice of radiotherapy duration (1- versus 3-weeks) is highly debated. Cost and financial toxicity are major concerns that BC patients face. Nonetheless, there remain limited discussions providing granular details of the role of insurance in the aggregate cost of 1 week versus 3 weeks of radiotherapy for patients. This project aims to disaggregate costs by plan to increase transparency of out-of-pocket (OOP) cost estimates in radiotherapy. Treatment procedures were determined through the National Comprehensive Cancer Network guidelines. OOP treatment costs, deductibles, and copays/coinsurance were calculated by utilizing Medicaid, Original Medicare, Medigap Plan G and Medicare Part D Rx plans. The medicare.gov, medicaid.oh.gov, aarpmedicareplans.com, and the physician fee schedule from cms.gov were used to determine costs by treatment. Price estimates reflect actual costs per insurance plan rather than costs estimated from claims data. All procedures were considered to be performed in an Ohio hospital setting. One-week radiotherapy was defined as 5 fractions without boost, and 3-week radiotherapy was defined as 15 fractions without boost. Medicare beneficiaries with Original Medicare coverage face an OOP treatment charge of $649.24 for one-week radiotherapy and $1006.20 for three-weeks of radiotherapy. Assuming the deductible is met post-lumpectomy, Medigap Plan G beneficiaries are faced with no additional charges for both lengths of radiotherapy. Similarly, for Medicaid beneficiaries (assuming treatment is approved by Medicaid), all expenses are covered without limit, resulting in no OOP expense. Considerations of one- and three-weeks of radiotherapy for post-lumpectomy early-stage BC are often dependent on cancer characteristics and patient preferences. This model (based on actual cost estimates per insurance plan rather than claims data) compares OOP costs across Medicaid and Medicare plans, which more holistically informs providers and patients in radiotherapy duration decision-making.

Assessing the marginal costs of radiation therapy and antiestrogen therapy for post-lumpectomy, early-stage breast cancer across Medicaid and Medicare plans.

529 Background: With recent Level I evidence (FAST FORWARD) supporting radiation therapy (RT) duration as short as one week and Level I evidence (CALGB9343) supporting RT omission in favor of antiestrogen endocrine therapy (ET) alone in select patients, the necessity of both RT and ET, adjuvantly, in early-stage breast cancer (BC) has been questioned. Evidence providing granular details on the role of insurance in the aggregate cost of RT and ET is lacking. This project disaggregates costs by insurance plan to increase transparency of out-of-pocket (OOP) cost estimates. Methods: National Comprehensive Cancer Network guidelines were utilized to determine the proper treatments, with FAST FORWARD radiation dose/fractionation (26 Gy in 5 fractions) representing RT. Treatments were identified using Current Procedural Terminology and Healthcare Common Procedure Coding System codes. OOP costs, deductibles, and copay/coinsurance were calculated for Medicaid, Original Medicare, Medigap Plan G, and Medicare Part D Rx. The medicare.gov, medicaid.oh.gov, aarpmedicareplans.com, and cms.gov were used to determine pricing. Price estimates reflect actual costs per insurance plan rather than costs estimated from claims data. All procedures were considered to be performed in an Ohio hospital setting, insurance coverages were based on the zip code 44106, and total expenses were based on all treatments plus a 5-year follow-up (not adjusted for inflation). Results: Treatment charges for ET include medical oncology initial consultation, biannual medical oncology follow-up, baseline bone density study, and Anastrozole cost (5-years). Treatment charges for RT include initial consultation, treatment planning, dosimetry calculations, treatment device, simulation and verification, RT delivery, on-treatment visits, and medical physics consultation. Original Medicare beneficiaries face an OOP cost of 20% for Medicare Part B claims with no cost cap for approved procedures after the deductible. Medications are covered under Medicare Part D with copays. This results in a marginal OOP treatment charge (after 5-year follow-up) of $767.54 for ET alone and $1,416.78 for ET + RT. Medigap Plan G beneficiaries face a marginal OOP charge of $1,225 for both ET alone and ET + RT, assuming the $226 Medicare Plan B deductible is met by the cost of lumpectomy during the year of RT. For Medicaid beneficiaries (assuming all treatments are approved by Medicaid), all expenses are covered without limit, resulting in no OOP expense for either treatment plan. Conclusions: Discussions of adding RT to ET for post-lumpectomy early-stage BC often involves considerations of treatment costs. This model (based on actual cost estimates per insurance plan rather than claims data) can help to enhance cost transparency by comparing expenses between Medicare and Medicaid plans.

Comparing spending across Medicare programs.

As Medicare Advantage increasingly becomes the dominant form of Medicare, meaningful and accurate comparisons with traditional fee-for-service Medicare will be increasingly important for both beneficiaries and policy makers. Recent debate among policy experts, government advisory bodies, and health plans highlights the need to create standardized comparison between the 2 Medicare programs. Supplemental benefits, Part B cost-sharing differences, and prescription drug benefits should be valued with a series of structured comparisons. Making this information transparent to beneficiaries through the plan finder would improve beneficiary decision-making. Finally, pragmatic comparisons would support policy makers in making improvements to Medicare Advantage program policy, undertaking comparative program evaluation, and engaging in Medigap plan oversight.

Medicaid Coverage 'Cliff' Increases Expenses And Decreases Care For Near-Poor Medicare Beneficiaries.

Cost sharing in traditional Medicare can consume a substantial portion of the income of beneficiaries who do not have supplemental insurance from Medicaid, an employer, or a Medigap plan. Near-poor Medicare beneficiaries (with incomes more than 100percent but less than 200percent of the federal poverty level) are ineligible for Medicaid but frequently lack alternative supplemental coverage, resulting in a supplemental coverage "cliff" of 25.8percentage points just above the eligibility threshold for Medicaid (100percent of poverty). We estimated that beneficiaries affected by this supplemental coverage cliff incurred an additional $2,288 in out-of-pocket spending over the course of two years, used 55percent fewer outpatient evaluation and management services per year, and filled fewer prescriptions. Lower prescription drug use was partly driven by low take-up of Part D subsidies, which Medicare beneficiaries automatically receive if they have Medicaid. Expanding eligibility for Medicaid supplemental coverage and increasing take-up of Part D subsidies would lessen cost-related barriers to health care among near-poor Medicare beneficiaries.

The “Fierce Urgency of Now”: Geriatrics Professionals Speaking up for Older Adult Care in the United States

The “Fierce Urgency of Now”: Geriatrics Professionals Speaking up for Older Adult Care in the United States

Characteristics of New-Onset and Chronic Sleep Medication Users Among Older Adults: A Retrospective Study of a US Medigap Plan Population using Propensity Score Matching.

BackgroundPrescription sleep medications are often utilized to manage sleep problems among older adults even though these drugs are associated with multiple risks.ObjectiveThe aim was to determine the prevalence and characteristics of new-onset compared to chronic sleep medication users and to examine factors associated with the conversion from new to chronic use. A secondary objective was to investigate the impact of sleep medications on health outcomes of injurious falls and patterns of healthcare utilization and expenditures.MethodsA 25% random sample of adults ≥ 65 years with 3-year continuous AARP® Medicare Supplement medical and AARP® MedicareRx drug plan enrollment was utilized to identify new-onset and chronic sleep medication users. Prescription sleep medication drugs were defined using National Drug Codes (NDCs); falls or hip fractures were identified from diagnosis codes. New users had no sleep medication use in 2014, but initiated medication use in 2015; chronic users had at least one sleep medication prescription in 2014 and in 2015; both groups had follow-up through 2016. Characteristics associated with new users, new users who converted to chronic use, and chronic users were determined using multivariate logistic regression. Prevalence of falls, healthcare utilization and expenditures were regression adjusted.ResultsAmong eligible insureds, 3 and 9% were identified as new-onset and chronic sleep medication users, respectively. New-onset sleep medication prescriptions were often associated with an inpatient hospitalization. The strongest characteristics associated with new users, those who converted to chronic use, and chronic users were sleep disorders, depression and opioid use. About 50% of new users had > 30 days’ supply; 25% converted to chronic use with ≥ 90 days’ supply. The prevalence of falls for new-onset users increased by 70% compared to a 22% increase among chronic users.ConclusionNew-onset and chronic sleep medication users were characterized by sleep disorders, depression and pain. Addressing the underlying problems associated with sleep problems among older adults may decrease the need for sleep medications and thus reduce the risk of sleep medication-related adverse events.

Care Coordination Challenges Among High-Needs, High-Costs Older Adults in a Medigap Plan.

Purpose of the Study:Many adults 65 years or older have high health care needs and costs. Here, we describe their care coordination challenges.Primary Practice Setting:Individuals with an AARP Medicare Supplement Insurance plan insured by UnitedHealthcare Insurance Company (for New York residents, UnitedHealthcare Insurance Company of New York).Methodology and Sample:The three groups included the highest needs, highest costs (the “highest group”), the high needs, high costs (the “high group”), and the “all other group.” Eligibility was determined by applying an internally developed algorithm based upon a number of criteria, including hierarchical condition category score, the Optum ImpactPro prospective risk score, as well as diagnoses of coronary artery disease, congestive heart failure, or diabetes.Results:The highest group comprised 2%, although consumed 12% of health care expenditures. The high group comprised 20% and consumed 46% of expenditures, whereas the all other group comprised 78% and consumed 42% of expenditures. On average, the highest group had $102,798 in yearly health care expenditures, compared with $34,610 and $7,634 for the high and all other groups, respectively. Fifty-seven percent of the highest group saw 16 or more different providers annually, compared with 21% and 2% of the high and all other groups, respectively. Finally, 28% of the highest group had prescriptions from at least seven different providers, compared with 20% and 5% of the high and all other groups, respectively.Implications for Case Management Practice:Individuals with high health care needs and costs have visits to numerous health care providers and receive multiple prescriptions for pharmacotherapy. As a result, these individuals can become overwhelmed trying to manage and coordinate their health care needs. Care coordination programs may help these individuals coordinate their care.

Leveraging big data in population health management

Population health management takes into account many determinants of health, including medical care, social and physical environments and related services, genetics, and individual behavior. Many different types of data may be used to guide population health management programs and to estimate program value. In addition to the variety of data required for these programs, big population health program data are characterized by large volume, high velocity, and inconsistent data flows. This manuscript describes how big data analytics have been used to craft a population health program to help improve the lives of about four million older adults who have an AARP® Medicare Supplement Insurance plan (i.e., a Medigap plan). Plan enrollees have access to a wellness program, holistic care coordination programs, two telephone-based advice lines, concierge support for insurance and medical care needs, and a program designed to help reduce unnecessary emergency room (ER) visits. During 2009–2011, these program components led to several improvements in health care. For example, increased duration in care coordination was associated with fewer hospital readmissions, and participants were significantly more likely to have recurring physician office visits and recommended laboratory tests. Participants in ER decision support reduced their ER visits by 1299 visits per 1000 insureds, compared with a reduction of 1121 visits per 1000 insureds for individuals who did not participate in the program. Better depression management helped reduce depression symptoms in 59 % of participants engaged in that program. Big data analytics of member data suggested the need for a wellness program feature, which began in 2014. Analytics of disease management services offered in 2009–2011 helped to combine and refocus these program features to enhance effectiveness in later years. Using big data to help manage and evaluate a population health program has led to several improvements in health care. Program management, reporting, and evaluation processes generated additional data which, when analyzed, continues to refine program implementation and quality. Future improvements to this program may include enhanced integration of social service programs that will generate their own data streams for analyses designed to further improve health and wellbeing.

MACRA Marks New Start for Medicare Payment of Physicians

MACRA Marks New Start for Medicare Payment of Physicians

Big Data, Little Data, and Care Coordination for Medicare Beneficiaries with Medigap Coverage.

Most healthcare data warehouses include big data such as health plan, medical, and pharmacy claims information for many thousands and sometimes millions of insured individuals. This makes it possible to identify those with multiple chronic conditions who may benefit from participation in care coordination programs meant to improve their health. The objective of this article is to describe how large databases, including individual and claims data, and other, smaller types of data from surveys and personal interviews, are used to support a care coordination program. The program described in this study was implemented for adults who are generally 65 years of age or older and have an AARP(®) Medicare Supplement Insurance Plan (i.e., a Medigap plan) insured by UnitedHealthcare Insurance Company (or, for New York residents, UnitedHealthcare Insurance Company of New York). Individual and claims data were used first to calculate risk scores that were then utilized to identify the majority of individuals who were qualified for program participation. For efficient use of time and resources, propensity to succeed modeling was used to prioritize referrals based upon their predicted probabilities of (1) engaging in the care coordination program, (2) saving money once engaged, and (3) receiving higher quality of care. To date, program evaluations have reported positive returns on investment and improved quality of healthcare among program participants. In conclusion, the use of data sources big and small can help guide program operations and determine if care coordination programs are working to help older adults live healthier lives.

Information Transparency for Health Care Consumers: Clear, but Effective?

Information Transparency for Health Care Consumers: Clear, but Effective?

Informed Choice: The Case for Standardizing and Simplifying Medicare Private Health Plans

California Health Advocates (CHA) is a nonprofi t organization dedicated to timely and responsive education and advocacy efforts on behalf of California Medicare benefi - ciaries and the preretirement population. Medicare Rights Center (MRC) is the nation's largest independent source of Medicare information and assistance for people with Medicare. Founded in 1989, MRC helps older adults and people with disabilities get high-quality, affordable health care. EXECUTIVE SUMMARY This report posits that people with Medicare would be better able to make informed decisions about their coverage options and be more likely to receive protection against high out-of-pocket spending on health care if Medicare private health plans-so-called Medicare Advantage plans-were only allowed to offer a fi nite number of standardized benefi t packages. There is a marked difference between choosing among competing private Medicare health plans and selecting a supplemental policy. (Medigap policies are sold by private insurers and receive no government subsidy. They cover gaps, such as deductibles and coinsurance, in the standard Medicare benefi t.) There are a limited number of Medigap benefi t packages, all of which provide fi nancial protection against catastrophic illness. By contrast, there is no limit on the variety of benefi t designs employed by Medicare private health plans and no guarantee of protection against exorbitant medical bills. Combining a review of recent research with an examination of the benefi t packages offered to people with Medicare in 2007, the report demonstrates that there are serious defi ciencies in the benefi t packages of Medicare private health plans. Among the shortcomings detailed in the report: * Consumers suffering from chronic illness can incur widely varying levels of cost-sharing under different plans. * Many plans do not provide a limit on enrollees' annual outof- pocket spending for medical services, or they exempt certain services, such as chemotherapy, from such limits; * Many plans charge more than Original Medicare for specifi c services, such as inpatient hospital care, nursing home stays, or home health care. The report fi nds that the current marketplace for Medicare private health plans, which is characterized by an increasing number of plans with widely varying benefi t designs, makes it nearly impossible for consumers to discover the shortcomings in plans' benefi t design. Informed choice is made more diffi cult by the aggressive marketing of Medicare private health plans and an overreliance by consumers on the information supplied by agents and brokers with a fi nancial interest in pushing specifi c plans. Only a fraction of consumers utilize Web-based plan comparison tools or advice from trained counselors in the State Health Insurance Assistance Program in selecting plans. Today's marketplace for Medicare private health plans bears marked similarities to the marketplace for Medigap plans before Congressional action mandated the standardization of these plans, a reform that successfully enhanced consumers' understanding of their plan options and decreased the incidence of deceptive and abusive marketing. The regulatory structure for Medicare private health plans fails to prohibit benefi t designs that are disadvantageous to individuals with serious illnesses and does not provide consumers with the means for making an informed choice of plans. Drawing from its prior experience regulating Medigap plans, Congress should create a process to develop a limited number of benefi t packages for Medicare private health plans that meet minimum standards of consumer protection. INTRODUCTION Enrollment in Medicare private health plans has risen by over three million since 2003, with the fastest increase concentrated among private fee-for-service (PFFS) plans that are marketed as low- or zero-premium alternatives to supplemental Medigap plans. …

CMS Names Administrator; Prices Rise for 10 Most Frequently Prescribed Medications

CMS Names Administrator; Prices Rise for 10 Most Frequently Prescribed Medications

Estimation of a hedonic pricing model for Medigap insurance.

This paper uses a unique database to examine premiums paid by beneficiaries for Medigap supplemental coverage. Average premiums charged by insurers are reported, as well as premiums by enrollee age and gender, and additional policy characteristics. Marginal prices for Medigap benefits are estimated using hedonic price regressions. In addition, the paper considers how additional policy characteristics and geographic differences in the use and cost of medical care affect premiums. A comprehensive database on premiums paid by beneficiaries for newly issued Medigap policies in the year 2000 along with state-level characteristics. Hedonic pricing equations are used to estimate implicit prices for Medigap benefits. The Centers for Medicare & Medicaid Services contracted for the creation of a detailed database on Medigap premiums. Data were collected in three stages. First, letters were sent directly to insurers requesting premium data. Second, letters were directly to state insurance commissioner's offices requesting premium data. Last, each state insurance commissioner's office was visited to collect missing data. With the exceptions of the part B deductible and drug benefit, Medigap supplemental insurance is priced consistent with the actuarial value of benefits offered under the standardized plans. Premiums vary substantially based on rating method, whether the policy is guaranteed issue, Medigap Select, or explicitly for smokers. Premiums increase with enrollee age, but do not vary between men and women. The relationship between premiums and enrollee age varies across rating methods. Attained-age policies show the strongest relationship between age and premiums, while community-rated premiums, by definition, do not vary with age. Medigap supplemental insurance premiums are higher in states with poorer health, greater utilization, and greater managed care penetration. Despite the high cost, Medigap plans are generally priced in accordance with the actuarial value of benefits. The primary exception is the drug benefit, which appears to be subject to substantial adverse selection. Benefits such as the part B deductible and at-home recovery benefit offer little value to consumers. Several states require insurers to community rate premiums. Such regulation has important implications for premiums, and research needs to consider the impact of such regulation on the Medigap market.

A Comprehensive Benefit Option For Medicare Beneficiaries

The proposed Part E, Medicare Extra, outlined in this paper adds a comprehensive benefit option to Medicare, eliminating the need for beneficiaries to purchase a private drug plan and Medigap supplemental coverage. Financed by a budget-neutral beneficiary premium, it has the advantages of greater simplicity, efficiency, and value without adding to federal costs. Beneficiaries now enrolled in Medigap plans would save money, as could employers by choosing a lower-cost alternative to current retiree health plans. Eliminating some of the excess payments to Medicare Advantage plans would yield savings that could be used to help finance premium subsidies for low-income beneficiaries.

Watchdog Agency Questions Benefits of Medicare PPOs

Back to table of contents Previous article Next article Government NewsFull AccessWatchdog Agency Questions Benefits of Medicare PPOsMark MoranMark MoranSearch for more papers by this authorPublished Online:19 Nov 2004https://doi.org/10.1176/pn.39.22.00390016Preferred provider organizations (PPOs) may not be the answer to reforming Medicare that the Bush administration hopes them to be.That's one finding in a Government Accountability Office report titled“ Medicare Demonstration PPOs: Financial and Other Advantages for Plans, Few Advantages for Beneficiaries.”The GAO report examined demonstration projects launched by the federal Centers for Medicaid and Medicare Services (CMS) that were designed to attract PPOs to Medicare+Choice, the program that provides beneficiaries a choice of private plans. The report found that, contrary to expectations, the demonstration projects attracted relatively few beneficiaries.The GAO also stated that CMS “exceeded its statutory authority” when it allowed 29 of 33 of the health plans in the Medicare PPO Demonstration to pay for certain services only if beneficiaries obtained those services from network providers—a violation of provisions governing the health plans' participation in Medicare.“In general, beneficiaries in Medicare PPO Demonstration plans who received care from non-network providers for these services were liable for the full cost of their care,” the GAO wrote. “Examples of such services include skilled nursing and home health, which are covered under fee-forservice Medicare, and dental care and routine physical examinations, which are not covered under fee-for-service Medicare.”A goal of the Bush administration has been to increase beneficiary enrollment in Medicare+Choice. Though PPOs are more prevalent than any other type of health plan in the private insurance market, only six PPOs had contracted to serve Medicare beneficiaries in Medicare+Choice as of 2003.To attract more PPOs to the program—particularly beneficiaries currently enrolled in the fee-for-service plan—two demonstration projects were started that included a total of 34 PPOs.But the GAO report stated that the PPO demonstration projects attracted relatively few enrollees from the fee-for-service plan and did “little to expand Medicare beneficiaries' access to private health plans in 2003.”According to the report, only about 98,000 of the 10.1 million eligible beneficiaries living in counties where demonstration PPOs were available enrolled in the demonstration projects. “Further, although one of the goals of the Medicare PPO Demonstration was to attract beneficiaries from FFS [fee-for-service] Medicare and Medigap plans, only 26 percent of enrollees in Medicare PPO Demonstration plans came from FFS Medicare, with all others coming from Medicare+Choice plans.”The GAO recommended that CMS instruct plans in the Medicare PPO Demonstration to provide coverage for all plan services furnished by any provider that is authorized to provide Medicare services and accepts the plans' terms and conditions of payment.CMS Administrator Mark B. McClellan, M.D., Ph.D., responded that the agency would seek to implement the GAO recommendations and is working with PPO demonstration plans to ensure that they comply with the provisions that govern their Medicare participation.But in a letter to GAO after reviewing the report, McClellan also expressed concern about the “tone” of the report, including the title of it, which he called “misleading, unfair, and not supported by the information presented in the report itself.” He reiterated the administration's optimism about PPOs. “We believe beneficiaries benefit substantially from increased access to the PPO model and will, in the long run, be better off for the availability of these types of plans in the new Medicare Advantage program.”McClellan also said criticisms about enrollment in a demonstration project overlook the experimental nature of demonstration projects.“It is important to note that the PPO Demonstration is just that, a demonstration,” McClellan wrote. “The financial arrangements developed for the project were intended to encourage plans to participate in this experiment, and they should be viewed as a first step in the development of better ways to establish partnerships between the Medicare program and private plans for the benefit of Medicare beneficiaries.”The GAO report is posted online at<www.gao.gov/new.items/d04960.pdf>.▪ ISSUES NewArchived