Medicare for Young Folks: A Case Study (Part 2)

In Part 1, we met a young lady who suffered a tragic medical setback, and is now unable to live on her own, and whose medical care is paid for by Medicare. We also began to learn about what alternatives or supplements might be available to her and her family to help fund her care.

The Medicare Advantage plan seemed promising. One immediate challenge is that the most recent regular Open Enrollment period ended last month, and the next one doesn't start until the Fall. The good news, according to my personal Medicare Advantage guru Roger D, is that folks on the Extra Help program are pretty much always in Open Enrollment, so she may be able to hop on to an Advantage Plan.

So we'd now identified 3 potential avenues: an Exchange plan, her father's retirement medical plan, or a Medicare Advantage plan. It was now time to do a little more digging, and then to meet to review the results:

As it turns out, folks on Medicare can not (easily) buy an ACA Exchange policy. As the folks at CMS explain:

"It’s against the law for someone who knows that you have Medicare to sell you a Marketplace plan."

But what if you really, really want one?

Well:

"[T]here are some situations where you can choose Marketplace coverage instead of Medicare ... if you’re eligible for Medicare but haven’t enrolled in it ... If you’re paying a premium for Part A, you can drop your Part A and Part B coverage and get a Marketplace plan"

Oh. Well, our young lady is already enrolled, so the first "out" won't work. And the second alternative didn't seem very promising, since she wouldn't be eligible for a subsidy.

So much for that.

Adding her to my friend's plan has some attraction: it's a known quantity (and is itself a Medicare Advantage plan with some great benefits) and offers the convenience of having one plan (and carrier) for both.

I had, however, a concern: what happens if/when my friend passes away - can his daughter stay on the plan? After poring over the written materials he had brought with him, and several frustrating phone calls to the carrier, we still don't have a definitive answer. This is troubling, but not necessarily a deal-killer.

So we called Roger (my guru) and had a very frank and helpful discussion about a separate Medicare Advantage plan for the daughter. First, we confirmed that she is, in fact, an Extra Help participant, so the Open Enrollment issue is moot. Second, we learned that there are several $0-premium Advantage plans available here, saving my friend several thousands of dollars in extra premiums. These plans also cap her out-of-pocket exposure to about $4,000 a year, which is well within my friend's means to cover.

One thing that still needs to be done before a final decision is made is to confirm that her doctors and other providers are in-network, and to check her meds against the carriers' formulary lists.

My friend was delighted that a good plan is available at a very affordable cost ("free"), and was very impressed with Roger's depth of knowledge about not just the Advantage plans but also the Extra Help and other programs. He even suggested some other places for my friend and his daughter to look for additional resources and help.

It's such a blessing to have access to folks on whom I can call to ask for help and advice, and who I know will take care of my clients. It makes me look good (no mean feat in itself), and they get quality advice and service.

And there's this: I try to learn from every interaction I have, whether or not I make a sale. There is no doubt that I'll have the opportunity to use what I've learned on this case down the road. And that, too, is no small thing.

Cavalcade of Risk #201: Call for submissions

Russell Hutchinson hosts next week's Cav. Entries are due by Monday (the 3rd).

To submit your risk-related post, just click here to email it.

You'll need to provide:

■ Your post's url and title
■ Your blog's url and name
■ Your name and email
■ A (brief) summary of the post

PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like). And please only submit if you are willing to link back to the carnival if your submission is accepted.

Happy Blogiversary!

Hard to believe, but today marks the 9th anniversary of InsureBlog. As always, I find it helpful - and humbling - to revisit my very first post, and to contemplate with pride how far we've come.  This past year, we welcomed new co-blogger Pat Paule, who brings still another interesting perspective to our pages.

Words can't express how fortunate I feel to be working with Bob, Mike, Nate, Kelley, Bill and Pat. As I often brag, I am blessed with the very best co-bloggers on the 'Net.

Most important, of course, are our loyal readers (and followers) who visit us each day - Thank You!

The (Un)Affordable Care Act: Film at 11:00

[Hat Tip: Ace of Spades]

Medicare for Young Folks: A Case Study

A friend of mine recently reached out to me for some advice about his disabled daughter. Years ago, while an Honor Student at a prestigious Midwestern university, she needed emergency surgery, and while under anesthesia, an accident occurred: oxygen was cut off to her brain for many minutes, resulting in permanent brain damage.

She is still able to converse for brief periods of time, but unable to earn a living or live on her own. Even though she's only in her early 30's, she does qualify for Medicare and for the "Extra Help" program that substantially reduced her out-of-pocket for necessary medications.

Her father - my friend - is retiring soon, and asked for my help in researching health insurance alternatives for his daughter. What he was looking for would be a pre-65 Medicare supplement (MedSupp) for her. He already knew of one potential source: for a monthly premium of $300, he could add her to his post-retirement health plan (provided by a former employer). He asked me if there were others, and I agreed to research this (mostly because I think this is a very interesting scenario, plus I get to help a friend).

I identified several potential avenues, and began to determine their viability:

First, I recalled that - years ago - the 'Medicare And You booklet' put out by our state Department of Insurance (DOI) used to include a list of the handful of carriers that sold pre-65 MedSupps. I clicked over to the site and downloaded the latest version, and began to search through it for that list.

It was nowhere to be found.

So I called the DOI to see if I was just looking past it, and was told that it wasn't me: there are currently no longer any carriers that market these plans (at least not here in the Buckeye State). So much for that.

But the nice gentleman at the DOI did mention that Medicare Advantage plans are available to serve this market, although the young lady would have to be in an Open Enrollment period. I turned to my own Medicare Advantage guru, Roger D (I long-ago decided against selling these myself), who kindly offered his expertise. One thing he suggested I do is to determine whether or not the young lady was participating in the Extra Help program.

Extra Help enables qualifying Medicare beneficiaries to purchase their meds at greatly reduced prices, with the government (well, fellow tax-payers) picking up the cost. According to the Social Security Administration (which oversees the program), Extra Help "is estimated to be worth about $4,000 peryear." Nice!

I also started looking into whether or not she could buy an ACA-plan from the Exchange.

In Part 2, we discuss the results.

Health Wonk Review is up...

Brad Wright hosts this week's round-up of wonky health-related posts. It's quite an effort, with lots of great posts and helpful context. Do check it out.

Thursday Morning LinkFest

■ From the Stupid Carrier/Government Tricks File:

"State insurance regulators have reached a settlement with the Genworth Life Insurance Company over the insurer’s use of the Social Security Administration's Death Master File database."

The carrier has agreed to more aggressively utilize the Social Security Administration's Death Master Files (DMF) to search for potential claimants.

Only one thing wrong with this whole (stupid) idea:

As we reported almost 2 years ago, "the DMF is itself rife with potential errors and misinformation" and there's no indication that this has been addressed.

Garbage in, garbage out - but hey, at least the states' insurance departments get to nick GW's policy- and other stake-holders for some quick cash.

■ Deadlines? What deadlines?

"The IRS [has unilaterally decided that] it will wait at least until 2015 to enforce the nondiscrimination rules, at the earliest, because defining terms such as “highly compensated employee” and “discrimination” has been difficult."

Math is hard? Who knew?

More importantly, under what authority is the IRS declining to enforce the law? 

■ And speaking of IRS malfeasance, turns out they're having no problem defining how to enforce the Evil Mandate ObamaTax on ordinary citizens:

"The Internal Revenue Service has drafted a collection of proposed regulations that could determine whether some taxpayers will owe fines for failing to get health coverage ... The IRS assumes many enrollees are confused"

Gee, whatever gave them that idea? 

■ This is kind of scary (if unsurprising): International Medical broker Global Underwriters has provided a "brief Travel Alert Update and Product Overview for all of our brokers and agents that have clients traveling internationally."

Specifically, there are significant concerns about the upcoming Olympics, since "[a]cts of terrorism, including targeted bombings, hostage taking, suicide bombing continue to occur in Russia particularly in the North Caucasus Region."

Is this destined to be a repeat of Munich '72?

Educating Obama on Pre Existing Conditions

In case you hadn't heard, last night was the State of the Union Address. In the hour plus speech President Obama mentioned health care reform for roughly two minutes. The focus during that time was on how nobody could be denied coverage now because of a pre-existing condition. Here is the script taken right from the teleprompter:

Now -- a pre-existing condition used to mean that someone like Amanda Shelley, a physician's assistant and single mom from Arizona, couldn't get health insurance. But on January 1st, she got covered. (Applause.) On January 3rd, she felt a sharp pain. On January 6th, she had emergency surgery. Just one week earlier, Amanda said, that surgery would've meant bankruptcy. That's what health insurance reform is all about, the peace of mind that if misfortune strikes, you don't have to lose everything.

I'm glad Ms. Shelley #GotCovered. But a pre-existing condition is one that a person has prior to purchasing insurance. Her emergency surgery and sharp pain happened after she had purchased insurance.

This was not a pre-existing condition. It would have been covered before Obamacare. Likewise, under Obamacare, if Ms. Shelley wouldn't have purchased insurance on January 1st her emergency surgery would not have been covered on January 6th.

Either President Obama and his speechwriters don't understand their own law or they simply choose to lie about it. If past history is an indicator, my guess is it is the latter.

PPACA - governing arbitrarily rather than lawfully.

Via the indispensable Overlawyered comes  this article published in the Journal Regulation:

You’ll find it well worthwhile to read the entire article, but here are its concluding paragraphs:

"In his classic 1964 book The Morality of Law, Harvard legal philosopher Lon Fuller listed several criteria that mark the break-down of the rule of law. They include the lack of rules, leading to inconsistent decisions; rules that are secret or unintelligible; the use of retroactive legislation; commands requiring citizens to do the impossible; edicts that change unpredictably; and a gap between the rules and the way government actually operates. A society suffering from those maladies is likely to be governed arbitrarily, rather than lawfully.

"Sadly, even in its early stages, PPACA already manifests many of those symptoms.  It left many crucial terms unexplained; even “minimum essential coverage”—i.e., what kind of insurance the law requires Americans to purchase—was left for HHS bureaucrats to define later, outside the reach of the ballot box. The employer mandate was unilaterally extended by administrative fiat beyond the statute’s clear command—yet Republican demands for a similar extension of the individual mandate were turned away, only to be granted in a modified form weeks later when HealthCare.gov proved a failure.

"Those and other aspects of the legislation’s halting and unpredictable implementation reveal serious flaws in PPACA. But they also demonstrate a deeper crisis.
"In the pursuit of progressive goals, the Obama administration and its congressional allies have done long-lasting damage to a constitutional order that was meant to preserve individual liberty by cabining government power along clear, predictable, and democratically accountable lines."

Shall Americans accept such assaults on the Constitution and the rule of law, by following this increasingly tinpot President down the rabbit hole of unilateral government thru arbitrary enforcement and Executive Orders?  Sadly, this remains an open question.

My new article is up...

At Answers.com:

"Homeowners' and business insurance policies don't cover losses caused by floods, and many home and business owners don't even realize this. Up top 25% of all flood insurance claims come from low or moderate risk areas, where premiums may be very reasonable because of the smaller risk."

Down to the wire...

From Anthem email:

"Reminder: January 31 is payment deadline for individual plans effective January 1

Consumers who purchased an individual health plan with a January 1 effective date have until January 31 to submit payment for their first months premium. This applies to individual plans bought on or off the exchange."

One wonders how many will comply, and what happens to those who don't. Recall, also, that the original deadline was the 1st. How many more extensions will Ms Shecantbeserious approve?

When you've lost Jim Moran...

Congresscritter Jim Moran (D-Va) is concerned:

"I’m afraid that the millennials, if you will, are less likely to sign up [for the ObamaTax] ...  don’t think we’re going to get enough young people signing up to make this bill work as it was intended to"

Here's the point, to which Rep Moran passingly alludes: in order for the numbers to properly crunch, there has to be a mix of both healthy and young people (not necessarily the same thing). Absent one, or both, the system will quickly fall apart, since it's on the shoulders of those two demographics that the premium structure relies.

How's that, you ask?

It's pretty simple, really: since the ObamaTax limits the premium differential between young and old, the former are needed to subsidize the costs of the latter. This means that young people will pay disproportionately higher premiums in order to artificially lower the folks in their 40's and 50's.

And since the law now requires that insurers take everyone whop comes a-callin' - and the sicker the better, really, for the photo ops - the healthiest are now subsidizing their less fortunate fellows to an even greater extent than under our previous system.

What's that word I'm looking for? Oh, yeah.

Timing is everything

This past Fall, I had the opportunity to help one of my long-time clients - who's also a good friend - buy some additional life insurance. My friend, we'll call him Ted, is a bit, um, portly, so he didn't qualify for the best rates. Still, he was satisfied with the offer that the carrier tendered, and we secured the coverage.

One evening recently, Ted called me at home with some scary news: he was calling from the hospital, where he had just been admitted because they had found what appeared to be a brain tumor. Surgery was scheduled for the next day, and he didn't want me to hear the news from a third party.

Of course, I wished him well, and asked if there was anything I could do for him or his family. Mostly, he said, send good thoughts and prayers that the surgery would be successful, and that it would turn out to be something treatable. Of course I agreed.

He did have the surgery, and we're still waiting on the results. In the meantime, though, I immediately went back and reviewed the recent application and coverage binder to be sure that all the i's were crossed and t's dotted. This is especially critical in a case such as this: life insurance policies have a one- or two-year "contestability" clause (often erroneously referred to as a "suicide clause"). Briefly, the contestability clause allows the carrier to review a recently approved policy to see if there were any misstatements or misrepresentations, or if relevant information was omitted (such as a history of cancer).

Thankfully, none of that appears to be the case and, since I've known Ted for over 20 years, I think I'd have a pretty good idea if he had skipped anything important on the application.

Here's why I'm so grateful that he agreed to the final rate: for at least the next few years, Ted isn't going to be able to buy any additional life insurance and will likely never qualify again for even these rates.

Sometimes, it pays to listen to your agent.

MVNHS© vs Seniors

This is the future of the ObamaTax, as well:

"Pensioners with cancer are being written off as too old to treat ... survival rates for British patients aged 75 and over are among the worst in Europe."

And younger Brits with cancer aren't faring so well, either:

"Young lung cancer sufferers are only 10 per cent more likely to die within five years than their continental counterparts"

Gotta love that "only" qualifier.

Today, I spent three hours listening to Anthem's on-hold music...

Somewhere, in one of the deepest circles of Hell, Anthem's over modulated, distorted, horrible music is playing...for eternity.  Be good.  Or else....

Over the cliff? [UPDATED]

[Please scroll down for update - HGS]

We've maintained for a long time that the actual intended result of the ObamaTax was, in fact, Single Payer. And the evidence making that case continues to pile up:

"Aetna CEO Mark Bertolini told CNBC on Wednesday that Obamacare has failed to attract the uninsured, and he offered a scenario in which the insurance company could be forced to pull out of program ... He said that so far, Obamacare has just shifted people who were insured in the individual market to the public exchanges where they could get a better deal on a subsidy for coverage"

Let's unpack this a bit, shall we?

First, I think it is rather frightening - and instructive - that the CEO of a publicly traded company, let alone a major player in the health insurance market, is signaling that his company may willingly walk away from its individual policy market. That represents a major portion of its core business, and he's saying that it may well go "poof."

Second, the news - and most of our readers already know this, of course - that the majority of the "new" business coming into the Exchanges is, in fact, folks whose previous coverage was cancelled despite the President's explicit and repeated promise that this would not happen. So we're not talking about "newly" insured here. As Yogi Berra, CLU might opine, "the uninsured are staying away in droves."

Not exactly what we were promised, either.

UPDATE: In the comments, John F and Bob H make the point that this may be much ado about, well, nothing much. Upon reflection, I think I have to agree with them. On the other hand, it's probably worth at least noting that Aetna is signalling their concern over the viability of the individual market. Is this concern over-stated? Perhaps. It will be, um, interesting to see how this plays out.

It's a Green Thing

What with all the winter white covering the ground, it's easy to forget that there's green underneath, as well. FoIB Bob Graboyes, senior research fellow at the Mercatus Center at George Mason University, has a slightly different take on the color, though:

"The battle for the soul of American health care is not really one of Democrat versus Republican or liberal versus conservative. Rather, it is between competing visions we can call the Fortress and the Frontier."

And what, you may ask, is "the Frontier?"

Well, as Bob explains it:

"The Frontier believes elites overestimate the capabilities of insiders and underestimate the abilities of outsiders. Innovation is the imperative."

And he then explains exactly how innovation and lateral thinking can drive down health care costs while maximizing effectiveness.

And make sure to check out the green plastic fingers.

Polar Vortex Risk Management

While much of the country continues to shiver from Polar Vortex v2.0, the biggest risk most of us are thinking about is frostbite and slipping on the driveway.

Or perhaps our pipes freezing [ed: from a strictly utilitarian viewpoint, the gentleman was successful].

But there are really a number of other severe weather risks about which we should be aware, and for which we should be prepared. Courtesy of FoIB Bill M and the fine folks at Auto Owners Insurance, here are few key Polar Vortex-related risks:

■ Ice Dams: these are "accumulation(s) of ice at the lower edge of a sloped roof ... [as] interior heat melts the snow on the roof, the water [runs] down and refreeze(s) a the roof's edge." This, of course, leads to a build-up of ice and creates major drain blockage which could end up forcing water into your walls and ceiling.

How to mitigate this risk: make sure your attic is well ventilated and keep the floor of the attic insulated. 

■ Freezing pipes: as mentioned above, a blow torch (while effective) is not recommended. Water is funny: it expands when it freezes (perhaps you've noticed this phenomenon in your freezer's ice tray). When the water in a pipe freezes, it can expand so fast and so much that it breaks (bursts) the pipe.

How to mitigate this risk: insulate exposed pipes with special (and inexpensive) foam sleeves. You should also seal any cracks in outside walls, and keep cabinet doors open so warm air can circulate. Don't forget to keep a slow trickle of water going, especially on lines that pass through exterior walls.

Oh: a hair dryer beats a propane torch if you do have a frozen pipe (really!).

Be safe, and stay warm.

Good News for Medicare Advantage

Aetna CEO Mark Bertolini was interviewed today on CNBC and offered a number of important insights about Medicare Advantage.

First, overall Medicare Advantage enrollment for 2014 rose more than anyone expected. 

Next Bertolini suggested that Medicare Advantage is now “too big” for the federales to shut down.  Nearly 30% of all Medicare-eligible seniors today have elected to buy a private Medicare Advantage policy rather than enroll in traditional Medicare.  That’s around 14 million people.   Bertolini also said that today's employees are increasingly willing to sign up for Medicare Advantage when they reach age 65, because they have had years in which to become familiar with managed care.  I think that means enrollment growth in Medicare Advantage is likely to accelerate over the next few years; an accelerating trend would of course be compounded as more “boomers” retire.

CMS pays private insurers to take over the risk for each senior who enrolls for Medicare Advantage.  At one time, the average CMS payment was 114% of the cost for traditional Medicare enrollees. These higher payments were partly because of risk-adjusters in the CMS payment formula – and partly because Medicare Advantage provides better coverage than traditional Medicare.  However – and this is important information – Bertolini said the average government payment to Medicare Advantage insurers is now down to 106%, and is “headed to zero.”  

In other words, private Medicare Advantage insurers believe they have figured out how to provide better benefits and better service than traditional Medicare, for the same cost. That's big.

It's big because it would bring good news all around: CMS will shed even more traditional Medicare risk – and cost – thus reducing its financial strain; private insurers will pick up even more Medicare Advantage enrollment on a profitable basis even when paid the same as the cost of traditional Medicare; the taxpayers will benefit if there is reduced need for higher taxes to support traditional Medicare; and seniors who prefer Medicare Advantage over traditional Medicare will still have that highly popular option available to them. 

My new article is up...

At Answers.com:

"Deferred Compensation plans, also known as Salary Continuation plans, are used by businesses to reward and retain certain key employees while minimizing their current taxes."