Medicare Open Enrollment Period Begins Today

The Medicare Open Enrollment Period -- which begins earlier this year on Saturday, October 15 – has been expanded to last seven weeks and will end on December 7.  The Department of Health and Human Services (HHS) expanded the enrollment period by a week as compared to previous years in which the election period ran from November 15 to December 31.  Medicare beneficiaries will have more time to find a suitable plan, but some still may think they have until New Year's Eve to decide.
HHS Secretary Kathleen Sebelius recently stated, “Thanks to the Affordable Care Act, people with Medicare can get certain preventive services for free and can get more affordable prescription drugs."  She added that “open enrollment is seniors’ chance to review their Medicare choices and pick the plan that works for them, or keep the plan they have today.”

Medicare beneficiaries now can begin reviewing the 2012 quality ratings for Medicare Advantage Health Plans (Part C) and Medicare Prescription Drug Plans (Part D) for the upcoming year.  This year the Centers for Medicare and Medicaid Services (CMS) is highlighting plans that have achieved an overall quality rating of 5 stars with a high performer or “gold star” icon so people with Medicare can easily find high quality plans.  People with Medicare can switch to an available 5-star plan at any time during the year; however there's no guarantee that 5-star plans will be available in all service areas.

Resources for Medicare Beneficiaries

Medicare beneficiaries can review and compare current plan coverage with new plan offerings, using many resources, including:

• Visiting www.medicare.gov, where you can utilize the website's plan finder to compare costs and coverage of the plans available in your area.
• Calling 1-800-MEDICARE (1-800-633-4227) for around-the-clock assistance to find out more about coverage options.  TTY users should call 1-877-486-2048.  Multilingual counseling is available.
• Contact Us if you would like personalized assistance comparing available plans in your area.

Plans for Medicare Expense Cuts

ObamaCare vs. Ryan-House GOP Plan

If you’ve been following national news in recent months, you may have come across mention of the Ryan-House GOP Plan. What is it? How is it different from Obama’s plan per the Patient Protection and Affordable Care Act (PPACA)? How might it affect you?

Drafted by Representative Paul D. Ryan, chairman of the House Budget Committee, and in competition with Obama’s and the Democrats’ plan for reducing governmental health care costs, the Ryan-House GOP Plan has been proposed by the Republicans in Congress for the same goal. It does not necessarily deny that some aspects of the Obama plan are good, but it serves as an alternative and as a potential opportunity for improvement of the governmental cost management of health care reform.

So what are the differences between the Obama plan and the Ryan-House GOP Plan? They both aim to save the government money, but in different manners. Firstly, regarding Medicare, the PPACA plans to reduce costs by granting more power to the Independent Payment Advisory Board, allow the Medicare program to bargain with drug companies for reduced prices, and take measures against fraud. This is estimated to save approximately $200 billion in the next ten years. On the other hand, the Ryan-House GOP Plan plans to reduce government costs by creating vouchers instead of providing full health care to Medicare beneficiaries under the age of 54. Also, premiums for Medicare coverage would be increased to cover approximately 35% of Medicare costs, rather than the 25% proposed under the PPACA, saving $241 billion in the next ten years. In addition, Senator Ryan’s suggestion that the eligibility age of Medicare be raised gradually from 65 to 67 would save approximately $124 billion by itself in the next ten years. Overall, this is projected to save $30 billion above and beyond the PPACA. Regarding Medicaid cost reductions, Obama has not come up with a definite plan, but projects cost decreases of $100 billion over the next ten years. On the other hand the Ryan-House GOP Plan has a plan to make Medicaid a block-grant program, where states are just given a sum of money for Medicaid to distribute as is fit. This plan is supposed to save $771 billion over the next ten years. Furthermore, the Ryan-House GOP Plan calls for the repeal of the PPACA in order to reduce costs.

The Ryan-House GOP Plan might be viewed unfavorably by those who are opposed to a reduction of benefits to Medicare beneficiaries. In any case, it is more clearly outlined in some areas of interest such as Medicaid cost reduction. If the Ryan-House GOP Plan is adopted, it may or may not be adopted in full (especially if the PPACA is not repealed). It does seem to be a worthy plan for consideration, and is being reviewed by the bipartisan panel of Republican Senator Pete Domenici and Democratic budget expert Alice Rivlin.  Most Democrats, including Senator Charles Schumer, rail against the Ryan plan arguing that it is a scheme to destroy Medicare and use that savings to give tax cuts to the wealthy on the backs of seniors. It could just as easily be argued that the Ryan plan is fiscally far-sighted and provides a better framework to maintain solvency of the Medicare program.

Fla. Judge Strikes Down Health Reform Law

BREAKING NEWS... Just today, a federal judge in Florida ruled that the Obama administration's health care overhaul is unconstitutional, siding with 26 states that sued to block it.

Roger Vinson, a judge in the U.S. District Court in Pensacola, Fla., said in a ruling on State of Florida et al. vs. United States Department of Health and Human Services et al. (Case Number 3:2010-cv-00091-RV), that Congress has no authority under the commerce clause of the U.S. Constitution to enforce the “minimum essential coverage provision” in PPACA.


As we mentioned in our December eNewsletter, this debate appears destined to reach the U.S. Supreme Court. While two other federal judges had upheld the requirement that people buy health insurance or face penalties, Henry E. Hudson of the U.S. District Court in Richmond, Virginia ruled that the insurance mandate violates the Constitution.

In today's ruling, Vinson went even further than Judge Hudson and declared the entire health care law unconstitutional.

"This is obviously a very difficult task. Regardless of how laudable its attempts may have been to accomplish these goals in passing the Act, Congress must operate within the bounds established by the Constitution," Vinson wrote in his 78-page ruling.

President Barack Obama's administration had argued that the health care system was part of the interstate commerce system. They said the government can levy a tax penalty on Americans who decide not to purchase health insurance because all Americans are consumers of medical care.

But attorneys for the states said the administration was effectively forcing the states to participate in the health care overhaul by holding billions of Medicaid dollars hostage. The states also said the federal government is violating the Constitution by forcing a mandate on the states without providing money to pay for it.

If the PPACA minimum coverage provision takes effect in 2014 as enacted, it will require many people with incomes above a certain level who do not get health coverage from their employers to buy a minimum level of health coverage or else pay a penalty. The provision provides exceptions for individuals with religious objections to owning health coverage and for some individuals who cannot find affordable health coverage.


Health insurers have argued that they can provide affordable health coverage for all, without basing rates on health status, only if the government requires all people – including relatively young, healthy people – to have health coverage.

PPACA contains many provisions other than the minimum coverage mandate. Vinson says the entire act must be declared void because PPACA is not written in such a way that the coverage mandate can be considered separately from the rest of the act.

There is widespread sentiment for reducing the cost of health care and improving the quality, and the Florida case “is not about whether the Act is wise or unwise legislation,” Vinson says.

“This has been a difficult decision to reach, and I am aware that it will have indeterminable implications,” Vinson says. “At a time when there is virtually unanimous agreement that health care reform is needed in this country, it is hard to invalidate and strike down a statute titled ‘The Patient Protection and Affordable Care Act.’”

Judge Vinson made headlines in December 2010 when he asked during oral arguments on the Florida case whether Congress had the authority to impose a PPACA broccoli-eating mandate.

Surely one of our former Presidents was offended by that, you know the one that wouldn't eat his broccoli.

Until next time,

Andrew Herman
AH Insurance Services, Inc.

Changes to Medicare Part D

Medicare Part D Downfalls


The turn of the year always brings changes to Medicare benefits… but this year wealthier people get a special change to their Part D premium to reward them for their high income.

So what’s the change? Starting January 1, 2011, Medicare beneficiaries face a new income related monthly adjustment amount (IRMAA) to their Medicare Part D premiums. Depending on income as filed on the 2009 tax return, an additional sum may be due each month:

How will you know for certain what you will be required to pay? The Social Security Administration will send you a letter in the mail notifying you of the extra amount that must be paid for the IRMAA.

The surcharge on your Medicare Part D premium is NOT to be paid to the provider of your Part D drug plan. Regardless of the method used to submit normal Part D premiums to your insurance provider, the extra monthly cost required by the IRMAA will be collected by the Social Security Administration. Please remember, if you do not have a Medicare Part D drug plan, you will not have to pay any extra money in Medicare premiums.


Until next time,



Andrew Herman

AH Insurance Services, Inc.

Health Care Advertisements

Health Care Plan Advertisements: Let The Buyer Beware


All around us - on television, on the radio, and on the internet when we’re browsing - there are advertisements for health care plans. Some specifically relate to changes in health care mandated by the new Patient Protection and Affordable Care Act (PPACA), while others are generic advertisements, not new in their message, but only in their graphics. Be wary of these commercials, for no matter how glitzy they may be, their primary purpose is to sell rather than to inform.

In looking into the issue of advertisements, AH Insurance Services reviewed specific promotional materials from Aetna and United Healthcare. We were hoping to encounter easy-to-understand sound bites that would summarize the new benefits mandated by health care reform and explain the impact of these benefits on plan premiums. What do you suppose we found?

Well, we found lots of information - but not all of it clear-cut - and much of the relevant information is buried from the consumer.

Aetna, for example, provides real information about the impacts of PPACA on health insurance plans via their Homepage, but first you must search for “health care reform” and then sort through material provided in a long list of URLs. When it comes to Aetna’s advertisements, it’s difficult to discern what is true from what is mere embellishment without having prior knowledge about health care reform provisions. Aetna’s advertisements promote new benefits as innovative plan features, when in reality these benefits are mandated by PPACA. So even though Aetna makes their plan options sound original, consumers will find them available with every new health plan.

United Healthcare uses advertisements that emphasize consumer satisfaction and security. That’s all fine, but what about explaining the health plan changes and quantifying any extra costs? United Healthcare’s visual pieces, such as the advertisement to the left, emphasize the importance of obtaining a health care plan, and merely give assurance of protection. Radio commercials by United Healthcare, such as those found on United Healthcare's National Advertising website, also emphasize the protection that having health insurance provides, while giving little factual information on new health benefits.

We see on United Healthcare's National Advertising website video advertisements in which consumers give their impressions of the health care they purchased for their small businesses. Once again, these give little information about what the actual benefits and costs are, but they do give four essential tips to purchasing health insurance:

1. Look at the benefits

2. Compare prices

3. Research the quality of service

4. See if your doctors are covered

Do not be lulled by non-informative advertisements containing fantastic consumer reviews. We all pay mind to good testimonials, but it would be foolish to think that insurance companies use a random sample to choose which reviews will be shared with the public. We suggest listening closely to the reviews, and then doing due diligence to confirm their integrity.

Even though a company may include little information in its advertisements, its products are not necessarily inferior. The key is to do your research, either by yourself or with a trusted independent insurance agent. Make sure you weigh the benefits and potential shortcomings of each plan, and compare premiums with several competitors. Sometimes, quoted rates vary substantially between companies, but that may not tell the full story as the company with lower quoted rates might employ much more stringent medical underwriting. Currently, it’s still permissible for health insurance companies to charge a higher premium, impose exclusions for pre-existing conditions, or outright deny adult applicants based on their medical history.

While we didn’t specifically review any of Humana’s advertisements for this post, we should mention that we haven’t noticed any mention in the media yet of the new lower new business premium rates Humana will be rolling out on January 2nd on its Florida “HumanaOne” individual health product. Lower rates - now that’s an expression you don’t hear very often. Perhaps in this case, you heard it from us first!

For a summary of the changes to health care plans mandated by the PPACA, please visit our prior blog posts titled New PPACA Provisions I and New PPACA Provisions II.

Until next year,

Andrew Herman

AH Insurance Services, Inc.

The New Medicare Advantage Disenrollment Period (MADP)

MEDICARE ADVANTAGE DISENROLLMENT PERIOD (MADP) runs from:

January 1 through February 14

New for 2011, the Open Enrollment Period (OEP) has been replaced with the Medicare Advantage Disenrollment Period (MADP). Medicare beneficiaries can no longer make a switch in their Medicare Advantage plan during this period; however members may disenroll from Medicare Advantage and return to Original Medicare.

Medicare Advantage customers with prescription drug coverage as of the beginning of MADP should take note of the following:

1. If you are enrolled in a Medicare Advantage plan that includes prescription drug coverage, you may be able to return to Original Medicare (plus any stand-alone drug plan, or none).
2. If you are enrolled in a Private Fee-for-Service (PFFS) Medicare Advantage plan plus a stand-alone drug plan, you may be able to return to Original Medicare (keeping the same drug plan or dropping it).
3. If you are enrolled in a Private Fee-for-Service (PFFS) Medicare Advantage plan that includes prescription drug coverage, you may be able to return to Original Medicare (plus any stand-alone drug plan, or none).

If you want to disenroll, the plan must accept your disenrollment request so you can return to Original Medicare; however, Medicare beneficiaries on non-PFFS Medicare Advantage plans will be automatically disenrolled upon their enrollment into a stand-alone drug plan during the MADP.

Please be aware that if you chose to disenroll and you choose not to enroll in a prescription drug plan, you may have a late enrollment penalty if you choose to enroll in a prescription drug plan in the future.

If you disenroll during the MADP, your disenrollment will be effective on the first day of the month following receipt of the disenrollment request.

If your situation doesn't fall into one of the three categories above, please don't hesitate to Contact Us.

Changes to Grandfathered Group Health Care Plans

Group Health Plans Got New Grandfathering Guidelines


On June 17, 2010, the Departments of Health and Human Services, Labor and Treasury (the “Departments”) released interim final regulations relating to the status of grandfathered health plans under the Patient Protection and Affordable Care Act (PPACA). These regulations set forth rules (outlined in a previous blog post) for determining whether or not a plan qualifies as grandfathered, how that status is maintained, and how a grandfathered plan loses the coveted status. One such rule provided that a group health plan would lose its grandfathered status if the plan entered into a new policy, certificate or contract of insurance after March 23, 2010.

Five months later, on November 15, 2010 the Departments issued an amendment generally allowing group health plans to switch insurance companies without forfeiting grandfathered status, as long as the plan is not changed in a manner that violates any of the other rules for maintaining grandfathered status. There are a few major circumstances through which this change protects the health care recipient:

• An insurer may stop selling a certain type of plan
• A company may change hands
• An employer may find a plan offering similar healthcare coverage at a lower cost
• Insurance carriers are less likely to impose unfair renewal rate increases on group plans that are clinging to their grandfathered plan status
• Third-party administrators may now be changed for all grandfathered health care plans (including individual)

The November 15th amendment does seem to make the grandfathering process easier and more consumer-friendly. However, it is important to note that this applies to grandfathered group plans only; individual health insurance policyholders who change their insurance carrier still will lose grandfathered status. Also, the amendment isn’t retroactive, as plans that lost grandfathered status between March 23, 2010 and November 15, 2010 cannot regain get their status back.

Is this good? We think so, except for the fact that the Departments chose not to make the amendment retroactive to March 23rd, which in our viewpoint would have been more consistent.

Does this mark the beginning of many changes to PPACA? We think it’s possible, but of course only time will tell.

Until next time,



Andrew Herman

Social Security Sets Premiums for 2011

Since there was no increase in Social Security for 2011, Medicare Part B premiums are frozen at the levels Medicare Beneficiaries were paying in 2010. For people who are new to Medicare in 2011, the Part B premium will increase to $115.40/month, a 4.4% increase. There are now three different amounts for Part B premium, dependent upon when the person first enrolled in Medicare Part B:

- 2011 enrollees pay $115.40
- 2010 enrollees pay $110.50
- 2009 and prior enrollees pay $96.40

Starting January 1, 2011, your Part D monthly premium could be higher based on your income. This includes Part D coverage you get from a Prescription Drug Plan (PDP), a Medicare Advantage Prescription Drug (MAPD) plan or a Medicare Cost Plan that includes prescription drug coverage. If your modified adjusted gross income as reported on your IRS return from two years ago is above $85,000 for a single return or $170,000 for a joint return, you will pay an income-related monthly adjustment amount in addition to the plan's stated Part D premium. If you have to pay a higher amount based on your income, Social Security will contact you this month with the specific information.

Also in 2011, the Medicare Part A Deductible increases from $1100/benefit period to $1132/benefit period; and the Medicare Part B Deductible increases from $155/calendar year to $162/calendar year.

If you would like to receive information on 2011 Medicare Health & Drug Plans, please contact us.

Until next time,

Andrew Herman
AH Insurance Services, Inc.

Medicare 2011: The Rules Keep Changing

Part II of a Two-Part Series


Part I of this series explained enrollment period changes impacting Medicare Health & Drug Plans; and in this Part we’ll share changes being made to Medicare Part D drug benefits. For our readers who may not be familiar with Medicare Part D, we’ll start out by providing an overview of the program mechanics.

Medicare Part D drug coverage is available to Medicare Beneficiaries enrolled in Part A and/or Part B. Beneficiaries access this voluntary program through insurance carriers and can get their coverage through a standalone Prescription Drug Plan (PDP) or a Medicare Advantage Prescription Drug (MA-PD) plan (must have both Medicare Parts A and B to enroll in MA-PD).

PDPs and MA-PDs operate on a calendar year basis and provide drug coverage in accordance with the following parameters:

• The plan deductible cannot exceed $310 (many plans have a $0 deductible)



• After the deductible is reached, the Beneficiary is responsible for paying drug co-pays according to the “tier” level of each drug as shown in the plan’s formulary (medicines that don’t appear on the formulary aren’t covered at all)



• When the combined total of the Beneficiary's payments and the insurance company's contributions reaches $2,830, the Beneficiary enters the coverage gap (the infamous “donut hole”)



• While in the coverage gap, the Beneficiary is required to pay for all prescription drugs out-of-pocket



• Once the Beneficiary’s total out-of-pocket drug expenses reach $4,550, the Beneficiary is in the Catastrophic coverage period; and medicines on the formulary are now covered for just small co-payments until the end of the year

So what’s changing in 2011? First, the $2,830 calendar year threshold level to fall into the donut hole increases to $2,840; and second, Medicare beneficiaries will receive a substantial discount on their medicines while in the donut hole (a 50% discount on brand-name drugs and a 7% discount on generics).

The donut hole is filling up.

The Medicare Part D benefit will be further improved over the years, so that the donut hole will gradually fill up. Discounts for both brand-name and generic drugs are scheduled to increase every year until the donut hole is gone for good in 2020.

Click here for more detailed information on the Medicare Part D program.

Medicare 2011: The Rules Keep Changing

Part I of a Two-Part Series


Part I of this series explains the Medicare enrollment period changes that are taking place. In Part II, we will discuss changes coming to Medicare Part D drug benefits for 2011.

Since 2006, there have been an Annual Election Period (AEP) and an Open Enrollment Period (OEP) for each year, during which Medicare beneficiaries may change their Medicare coverage. During the Annual Election Period, a beneficiary could enroll into or dis-enroll from Medicare Advantage and Medicare Part D plans for the upcoming year (starting January 1), no matter what type of Medicare coverage the beneficiary had the preceding year.

For example, during AEP (11/15 – 12/31) a Medicare beneficiary could enroll in the Part D program for the first time; or a beneficiary on Medicare Advantage could sign up with a new insurance carrier. One could make as many changes as desired during AEP, and the last plan enrollment (signed and dated by December 31st) would be the one to take effect in the new year.

The OEP has been the first three months of each calendar year, during which time Medicare beneficiaries were allowed to make one plan change. These changes had to be “like-for-like” with respect to having Part D drug benefits (i.e., the status of having or not having Part D benefits, either on a standalone basis or as part of a Medicare Advantage plan, became locked in on January 1st). Despite the restriction, many people took advantage of the opportunity to switch their Medicare Advantage plan or return to original Medicare during the OEP.

For 2011 enrollments, the AEP rules remain the same but the OEP has been eliminated. OEP has been eliminated and replaced with the Annual Disenrollment Period (ADP) that will run from January 1st through February 14th. During the new ADP, one can still opt out of Medicare Advantage in favor of original Medicare; however ADP does not allow a switch in Medicare Advantage plans, nor does it allow someone in the original Medicare program to enroll into a Medicare Advantage plan. Beneficiaries dis-enrolling from a Medicare Advantage plan will get a special enrollment period (SEP) to join a standalone Part D plan.

Since there is no longer any OEP, it is especially important that Medicare beneficiaries make the best possible decision on their 2011 coverage during this year’s AEP, which as in the past runs from November 15th through December 31st.

Anyone wanting a head start on 2012 Medicare enrollments should take note that the AEP will start earlier beginning in the fall of 2011! Instead of running the last six weeks of the calendar year, future AEPs are scheduled to take place between October 15th and December 7th. Enrollments will take effect on January 1st as always.