Medicare Should Warn Enrollees on Steep Late Sign-up Penalties
For many Americans entering retirement, it comes as an unwelcome surprise: Medicare premiums become much more expensive if you do not sign up on time. The program tacks on a 10 percent penalty on monthly Part B premiums for each full 12-month period of late enrollment, and you keep on paying the penalties for the rest of your life.
The aim is to avoid “adverse selection,” which occurs when people sign up for coverage only when they think they will need it. That helps keep premiums lower for all Medicare enrollees.
But a heads-up would be nice. And that is the intent of the Beneficiary Enrollment Notification and Eligibility Simplification Act (BENES Act), a bill introduced with bipartisan support last week in the U.S. Senate (companion legislation was introduced in the House of Representatives earlier). It would require the government to send a notification letter in the year before your 65th birthday – the first date of Medicare eligibility.
The letter would explain the enrollment rules, and – importantly – how Medicare interacts with other insurance coverage you might have.
Roughly 750,000 Medicare beneficiaries paid late enrollment penalties in 2014, according to the Congressional Research Service (CRS). That is less than 2 percent of enrollees, but for those who do pay the penalties, the bite is painful. On average, total premiums for late enrollees were 29 percent higher, CRS reported.
Medicare is the primary source of health insurance for seniors, and choosing the correct Medicare plan is important. However, it only provides for 100 days of skilled nursing care. Planning for those potential costs are a critical component for anybody, regardless of when you sign up for Medicare.
Want to discuss your plan for paying for your care needs today and in the future? Contact us to discuss how you can plan for future long term care needs that are not covered by Medicare.
A wrinkle in Medicaid’s complex funding formula gives nursing homes owned or leased by city or county governments a funding boost of 30 percent per Medicaid resident. The money is sent to the hospitals, which negotiate with the nursing homes over how to divvy it up.
Westminster Village North, a nursing home and retirement community in Indianapolis, recently added 25 beds as well as two kitchens to speed food delivery to its residents. It redesigned patient rooms to ease wheelchair use and added WiFi and flat-screen televisions. This fall, it’s opening a new assisted-living unit.
The nursing home can afford these multimillion-dollar improvements partly because it has, for the past five years, been collecting significantly higher reimbursement rates from Medicaid, the state-federal health insurance program for the poor.
The changes began when Hancock Regional, a county-owned hospital 15 miles away, began leasing Westminster Village North. A wrinkle in Medicaid’s complex funding formula gives nursing homes owned or leased by city or county governments a funding boost of 30 percent per Medicaid resident. The money is sent to the hospitals, which negotiate with the nursing homes over how to divvy it up.
About half of Westminster’s residents are on Medicaid, so the new funding was substantial.
“We have seen amazing changes and created a more homelike environment for our residents,” said Shelley Rauch, executive director of the home.
Nearly 90 percent of Indiana’s 554 nursing homes have been leased or sold to county hospitals in the past 14 years, state records show, bringing in hundreds of millions in extra federal payments to the state.
Even though Indiana’s nursing home population has remained steady at about 39,000 people over the past five years, Medicaid spending for the homes has increased by $900 million, to $2.2 billion in 2016, according to state data.
Today, more than two-thirds of Indiana’s Medicaid long-term care dollars go to nursing homes. The U.S. average is 47 percent.
The funding enhancements were pioneered in Indiana, but hospitals in Pennsylvania and Michigan also have used the process. Advocates say it has been a key factor in helping to keep Indiana’s city and county hospitals economically vital at a time when many rural hospitals nationwide are facing serious financial difficulties.
Critics contend that the money flow has not significantly improved nursing home quality. Furthermore, they say, it has provided incentives to steer patients to nursing homes rather than lower-cost options, such as home health care or community-based daycare centers.
Joe Moser, who until May was Indiana’s Medicaid director, acknowledged while in office that more people were moving to nursing homes rather than staying in their homes, and said it was due in part to the hospital-nursing home marriages. “It is a factor that has contributed to our imbalance” in care choices, he said.
Daniel Hatcher, a law professor at the University of Baltimore and author of “The Poverty Industry,” a book published last year, said this funding arrangement is a bad deal for the poor because it takes a large portion of Medicaid dollars targeted for services for low-income nursing home residents and sends it instead to hospitals to use as they please.
That undercuts the purpose of the Medicaid program, he said.
“The state is using an illusory practice and taking away money from low-income elderly individuals who are living in poor-performing nursing homes,” he said. He noted Indiana is ranked near the bottom of states for nursing-home quality by several government and private reports. Among them is a scorecard from Families for Better Care and the AARP scorecard.
But proponents of the practice say that even when hospitals get most of the money, it is well spent.
Marion County Hospital and Health Corp., the large safety-net hospital system in Indianapolis, owns or leases 78 nursing homes across the state, more than any other county hospital.
Sheila Guenin, vice president of long-term care there, said the hospital keeps 75 percent of the additional Medicaid dollars and the nursing homes get the rest. Still, the additional money has improved care. The transfer of the license to the hospital has kept several nursing homes from closing and increased staffing rates at many others, she said.
About 40 percent of the county hospital’s nursing homes have five-star ratings from the federal government, up substantially from 10 years ago, Guenin said. Among the improvements at the nursing homes were the addition of electronic health records and of high-capacity emergency generators to provide power in a natural disaster.
Still, some patient advocates said the extra funding is flowing to hospitals and nursing homes with little public accounting. Ron Flickinger, a regional long-term-care ombudsman in Indiana, said, “A lot of extra money is being spent here, but I’m not sure patients have seen it benefit them.”
Medicaid, which typically covers about two-thirds of nursing home residents, is jointly financed by the federal and state governments. States pay no more than half the costs, although the federal match varies based on a state’s wealth. In Indiana, the federal government pays about 65 percent of the costs.
The enhanced nursing home payments began in 2003 when a county-owned Indianapolis hospital decided to take advantage of Medicaid rules to bolster its bottom line. In this case, the hospital purchased a nursing home, then provided the money for the state to increase what it spent on the home to the federally allowed maximum.
That increase, in turn, drew down more federal matching funds. Since the federal remittance was larger than the hospital’s contribution, the hospital got back its initial investment and divided the extra money with the nursing home.
Other county-owned hospitals in Indiana slowly followed suit.
All the Medicaid funding for nursing homes should be going to those homes to care for the poor, not shared with hospitals to use as they choose, he said.
The strategy, promoted by consultants advising hospitals and nursing homes in Indiana, is used heavily there because of the plethora of county-owned hospitals. But the federal government is tightening the rules about such payments.
Texas has secured Medicaid approval for a similar strategy starting this month, but federal officials have made the extra funding dependent on nursing homes meeting quality measures, such as reducing falls. Oklahoma is seeking to get federal approval as well.
And in a rule released last year, the federal Centers for Medicare and Medicaid Services announced that it would gradually force states to shift to payment systems that tie such reimbursements to quality of care. Michael Grubbs, an Indiana health consultant, said that rule does not stop the Indiana hospital funding program, but it’s unclear that it will last.
Nursing-home operators in Indiana say the financing arrangement has helped them keep up with rising costs and improve care for residents.
Zach Cattell, president of the Indiana Health Care Association, a nursing-home trade group, noted the number of nursing homes in the state earning Medicare’s top, five-star rating has increased 9 percentage points since 2011. He said the percentage of high-risk residents with pressure ulcers and those who are physically restrained also dropped significantly.
“The money has meant a great deal to us,” said Gregg Malot, director of business development at Pulaski Memorial Hospital in northern Indiana. “I don’t see this as a loophole but see it as an opportunity for small, rural community hospitals to improve our quality and access to care.”
His hospital is the only one in Pulaski County. The extra Medicaid revenue from having acquired 10 nursing homes statewide — about $2 million a year — has helped finance the purchase of the hospital’s first MRI machine, so doctors don’t have to rely on a mobile unit that used to come twice a week, he said. The hospital also spent some of the money to add a computerized system to monitor patients’ vital signs.
Steve Long, chief executive of Hancock Regional Hospital in Greenfield, said his hospital recently built two fitness centers in the county with help from the extra Medicaid dollars that resulted from its acquisition of Westminster Village.
He rejects the notion that additional Medicaid money reduces the hospital’s incentive to add home- and community-based care in the community. He said new Medicare financing arrangements, such as accountable care organizations, give the hospital motivation to find the most efficient ways to care for patients after they leave the hospital.
But he acknowledged the hospital benefits from seeing more patients go to nursing homes licensed under its name.
“Welcome to health care — it’s a complex and confusing environment where we have all different competing incentives,” Long said.
Traditional Insurance Market Declines
Forbes is reporting that only about 89,000 people bought private long-term care insurance in 2016, a nearly 14 percent decline from 2015, according to an industry survey. Nearly all were bought in the individual market, though about 15,000 people purchased coverage through their jobs.
The sales decline continues a stunning trend. At the market’s peak in 2002, consumers bought 750,000 traditional policies, eight times what they purchased last year. For the second year in a row, the total number of people covered by long-term care insurance fell slightly as more dropped coverage, died, or exhausted benefits than bought new policies. Roughly 7 million people currently own traditional policies, a number that has not changed in a decade even as the population of those 55 and older (those most likely to buy or use long-term care insurance) has grown by 30 million.
While fewer people bought traditional insurance last year, more purchased policies that combined life insurance with long-term care benefits. More than twice as many consumers bought policies that typically add long-term care benefits to annuities or whole life plans than purchased stand-alone coverage. Some consumers continue to want to hedge against personal care costs in old age, but not with traditional, stand-alone policies.
Average premiums fell slightly in 2016, from $2,497 to $2,480. That may reflect a mix of several factors. They include slightly younger buyers and slightly less generous daily benefits, though the average length of policy benefit period rose a tick from 2015. Consumers also purchased less generous inflation protection, with many choosing a feature known as Future Purchase Option that allows them to buy more coverage in future years instead of getting automatic annual benefit increases.
One carrier, using a back-to-the-future marketing strategy, sold single-premium lifetime policies. This product, popular a decade ago, allows consumers to make one upfront payment and avoid future premium increases. But nearly all carriers abandoned the design because of the big, and difficult to predict, risks they were taking on.
In 2016, insurers were also underwriting prospective customers more strictly, with more carriers reviewing consumer’s medical and medication records and doing telephone interviews and cognitive assessments. Other research suggests that as many of one-third of those who want to buy long-term care insurance are unable to do so because they cannot pass underwriting.
Traditional long-term care insurance is disappearing as a way for middle-income people to prepare for their personal care needs in old age. It is too expensive for many consumers, and too difficult to buy, especially for those who wait until their 60s when they are likely to have pre-existing conditions that may disqualify them. At the same time, most large life insurance companies — which were once the core of the business — are unwilling to sell long-term care coverage at all.
The rise of combination products suggests that people still want protection against long-term care costs. But without big changes, stand-alone long-term care insurance is likely to play only a modest role in this market for the foreseeable future.
If Long-Term Care Insurance is not an option for you, then planning to qualify for Medicaid benefits is critical. Contact our office to discuss what planning to qualify for Medicaid would mean to you.
Fall and winter don’t just bring cooler temperatures and the holidays — the final seasons of the year also mean open enrollment for Medicare. For most seniors in the United States, the period between Oct. 15 and Dec. 7 is the only time they can switch or make changes to their Medicare plan insurance.
“As people age, their health care needs evolve,” says Dawn Maroney, chief growth and strategy officer for Alignment Healthcare. “When that happens, they may find the Medicare plan they first chose when they became eligible no longer meets all their needs. This open enrollment period is their yearly opportunity to re-evaluate whether to continue with their plan or switch to another, with changes becoming effective the first of the new year.”
Most Americans are aware that Medicare is a government program designed to ensure people older than 65 have access to affordable health insurance. The program can also cover people younger than 65 who have certain disabilities.
The Medicare program has four parts, according to Medicare.gov: A, B, C and D.
* Medicare Part A helps pay for in-patient hospital stays, care in a skilled nursing facility and hospice care.
* Medicare Part B helps cover care by doctors or other health care providers, outpatient services, some medical equipment and some preventive services.
* Medicare Part C (also known as Medicare Advantage) covers everything included in parts A and B, and usually includes Medicare prescription drug coverage as part of the plan. Medicare Advantage plans may include extra benefits and services for an extra cost. Medicare-approved private insurance companies, such as Alignment Healthcare’s Alignment Health Plan, run Medicare Advantage plans.
* Medicare Part D helps cover the cost of prescription medications and is run by Medicare-approved private insurance companies.
Original Medicare versus Medicare Advantage
Most people think of Medicare parts A and B as Original Medicare, in which the government pays directly for the health care services received. People with Original Medicare can see any doctor and hospital that accepts Medicare in the country, without prior approval from Medicare or their primary care physician. Most people do not pay a monthly premium for Part A if they paid taxes while working; everyone pays a monthly premium for Part B, based on income. The standard premium for Part B in 2017 was $134 per month, which is deducted from the individual’s Social Security benefits.
Original Medicare pays for about 80 percent of the total costs of health care. The patient is responsible for the remaining 20 percent, which can mean high out-of-pocket costs in the event of a hospitalization or other events requiring significant medical attention. To offset the financial burden of that 20 percent, some people choose to purchase supplemental insurance, called Medigap.
Private insurance companies offer Medigap to cover things Medicare doesn’t, such as deductibles, co-pays and co-insurance — but, keep in mind, Medigap only supplements Original Medicare benefits. Further, if you do not apply for Medigap in the first six months of becoming eligible, there’s no guarantee that an insurance company will sell you a Medigap policy.
With Medicare Advantage, government-approved private companies administer health plans that cover everything Original Medicare does, but can do so with different rules, costs and restrictions that can change every year. For example, a private Medicare plan may require your physician to request permission before performing a procedure in order to be paid by the plan. Medicare Advantage plans, however, usually cover extras that Original Medicare does not, like dental care, vision services, hearing exams and gym memberships.
Most Medicare Advantage plans also include prescription drug coverage (Medicare Part D), which is not included in Original Medicare, at no additional cost. If you elect to enroll in a Medicare Advantage plan, you still have Medicare — this means that you must still pay your monthly premiums for parts A and B, in addition to a monthly premium for Part C, if applicable. Many Medicare Advantage plans are available for no additional monthly premium.
When choosing between Original Medicare and Medicare Advantage, you should consider these questions:
* How likely is it your health needs will change down the road? Since health changes as you age, chances are your treatment needs will, too. If you don’t enroll in the additional insurance and drug coverage when you first sign up for Original Medicare, you may pay a monthly penalty for enrolling later and may not be eligible for additional Medigap coverage.
* Are you still working past age 65? If so, you will probably want to enroll in Part A, because there generally are no monthly premiums, and it may supplement your employer’s insurance plan. You might choose to delay enrolling in Part B, but it depends on your health coverage. Everyone has to pay a monthly premium for Part B.
* Is it more important to you to have lower or no premiums or lower out-of-pocket costs? With Original Medicare, you may pay more out of pocket without supplemental insurance and prescription drug coverage. Medicare Advantage includes supplemental insurance and sometimes prescription drug coverage, too.
* How important is it to keep your doctor? Original Medicare is accepted by any doctor or hospital that accepts Medicare, without referral. Medicare Advantage plans allow you to select a doctor from the plan network, which is usually very large; your current health care providers are likely to be in the network already.
* Do you regularly take prescription medication for chronic conditions? Prescription drug coverage is not included in Original Medicare, and if you fail to sign up for Part D at the time you enroll, you could pay a penalty for adding it later. Most Medicare Advantage plans do cover prescription drugs.
“Medicare Advantage allows patients to receive the care they need to stay well and keeps their budgets in check with set costs and annual maximums,” Maroney says. “It’s an ideal solution for patients who need frequent care or who struggle to meet medical expenses.”
Join us for a FREE seminar to be conducted at Heritage Hills Nursing Center in Smithfield, Rhode Island where we will be discussing the legal issues that must be planned for with seniors.
Click the below link to lean more. To register, please call Jenny Coutre at 401-231-2700 x39.
Health-Insurance rate increases
A number of Rhode Island health-insurance companies have been granted permission for double-digit rate increases to their premiums for 2018.
The new rates released Thursday by the Office of the Health Insurance Commissioner range from increases of 5 percent to 12.1 percent. In six of 12 cases, the rates app
roved are less than the increases requested by the insurance companies. Collectively, the 2018 premium approvals are $16.7 million lower than what insurance companies requested.
The rate increases approved for the individual market, which covers roughly 47,000 people, are: Blue Cross Blue Shield of Rhode Island, 12.1 percent; Neighborhood Health Plan of Rhode Island, 5 percent.
The rate increases approved for small-group market, which covers roughly 60,000 people, are: Blue Cross Blue Shield of Rhode Island, 7.3 percent; Neighborhood Health Plan of Rhode Island, 6.3 percent; United HealthCare HMO, 8.1 percent; United HealthCare PPO, 8.1 percent; Tufts Health Plan HMO, 6 percent; Tufts Health Plan PPO, 6.5 percent.
The rate increases approved for the large-group market, which covers roughly 123,000 people, are: Blue Cross Blue Shield of Rhode Island, 10 percent; United HealthCare, 8 percent; Tufts Health Plan HMO, 9.8 percent; Tufts Health Plan PPO, 10.4 percent.
Having health insurance is the first step in the process of planning for medical issues and paying for your care to address those issues. However, health insurance is only one piece in the health care planning puzzle. People need to be aware that health insurance does not pay for every health related expense. One major expense it does not pay for is nursing home care, or skilled nursing care. These medical expenses are not covered by health insurance and should you or a loved one find yourself in a position to need to reside in a facility, many are overwhelmed with the financial burden it imposes. Thus planning your estate and planning for these expenses is critical. Call us to discuss how you can plan for these expenses.
Veterans to receive private medical care
President Donald Trump has signed an emergency spending bill that will pump more than $2 billion into a program that allows veterans to receive private medical care at government expense. Trump, who made improving veterans care a central campaign promise, signed the VA Choice and Quality Employment Act while at his New Jersey golf club on Saturday.
The bill, which addresses a budget shortfall at the Department of Veteran Affairs that threatened medical care for thousands of veterans, provides $2.1 billion to continue funding the Veterans Choice Program, which allows veterans to seek private care. Another $1.8 billion will go to core VA health programs, including 28 leases for new VA medical facilities.
Why the new Veteran program?
The Choice program was put in place after a 2014 wait-time scandal that was discovered at the Phoenix VA hospital and spread throughout the country. Veterans waited weeks or months for appointments while phony records covered up the lengthy waits. The program allows veterans to receive care from outside doctors if they must wait at least 30 days for an appointment or drive more than 40 miles to a VA facility.
VA Secretary David Shulkin has warned that without legislative action, the Choice program would run out of money by mid-August, causing delays in health care for thousands of veterans. The bill will extend the program for six months. Costs will be paid for by trimming pensions for some Medicaid-eligible veterans and collecting fees for housing loans.
Veterans benefits are questions that all people who have served should seek the information to fully understand their options. Many who have served, while having the option to receive benefits in established Veterans hospitals and facilities, often choose to participate in private facilities. Veterans needing skilled nursing care have the option of receiving the care inside the VA hospital program, or, as with any private citizen, can qualify for Medicaid to pay for those medical needs. Speaking to a person who is certified in VA planning is a critical step in understanding what option is right for you or your loved one.
Source: ABC News
What Is Palliative Care?
Palliative care is an approach that improves the quality of life of patients (adults and children) and their families who are facing problems associated with life-threatening illness. It prevents and relieves suffering through the early identification, correct assessment and treatment of pain and other problems, whether physical, psychosocial or spiritual.
This care is a crucial part of integrated, people-centered health services, at all levels of care: it aims to relieve suffering, whether its cause is cancer, major organ failure, drug-resistant tuberculosis, end-stage chronic illness, extreme birth prematurity or extreme frailty of old age.
Fact 1: Palliative care improves lives
Worldwide, only about 14% of people who need care currently receive it. The quality of life of patients and their families who are facing problems associated with life-threatening illness, whether physical, psychosocial or spiritual are greatly improved by palliative care.
Fact 2: Pushing policy will drive palliative care forward
World Health Assembly resolution 67.19 on strengthening palliative care, adopted in 2014, emphasizes the need to create national care policies, to ensure secure access to opioids for pain relief, training for all health care staff in palliative care, and the integration of palliative care services into existing health care systems.
Fact 3: Most people in need of palliative care are in their own homes
Therefore, the most effective models of palliative care link supervised home care and care at community health centres to hospitals with more palliative care expertise.
Fact 4: Palliative care benefits everyone
Patients during treatment for serious illnesses, not only patients at the end of their lives, can take advantage of what palliative care can offer. For example, it can improve the quality of life of patients receiving radiation therapy for cancer or chemotherapy for cancer or drug-resistant tuberculosis.
Fact 5: Oral immediate-release morphine is an essential palliative medicine
Opioid laws and prescribing regulations must balance the prevention of illegal use of opioids with ensuring accessibility to morphine to relieve moderate and severe pain.
Fact 6: Children have little access to palliative care
They are at a higher risk than adults to face inadequate pain relief. For children, 98% of those needing palliative care live in low- and middle-income countries with almost half of them living in Africa.
Fact 7: Palliative care is “people-centered”
For example, it respects the values and confidentiality of patients, seeks to protect patients and their families from financial hardship due to the illness, and provides emotional support both during the illness and for the bereaved.
Fact 8: Palliative care shows global disparity
Lack of access to palliative care and pain control is one of the largest inequalities in global health. Most people in high-income countries have access, but only a small percentage of people in low- and middle-income countries do. Each year an estimated 40 million people are in need of palliative care, 78% of whom live in low- and middle-income countries.
Fact 9: The need for palliative care has never been greater
It continues to grow with the increase of chronic diseases and people living to an older age.
Fact 10: Integrating home care has multiple benefits
Palliative care that includes home care can improve the quality of life of patients and their families while also saving money for health care systems by reducing unnecessary hospital admissions.
Planning Is Caring – Estate Planning
Plan today for life events to keep the smiles around tomorrow. Wills – Trusts – Long Term Care – Probate – Guardians – Power of Attorney. Call today to make a plan for you and your loved ones.