Embed Size (px)
DESCRIPTION
Medigap and Medicare Advantage in Michigan.
Citation preview
Medigap and Medicare Advantage
in Michigan
November 2012
This legislation ensures Seniors will continue to have access to affordable,
high quality care
1
▪ The legislation ensures the AG agreement to freeze Medigap Rates
for the next four years will stay in place
▪ After the freeze, the legislation specifies that over half of the
revenue spent yearly from the $1.5 billion contribution will be a
targeted, more effective Medigap program to help Seniors in need
▪ This new Medigap structure will not require small business to pay
more for BCBSM insurance to fund the subsidy – which harms their
ability to provide insurance for their employees and create jobs
▪ Seniors have an alternative to Medigap that is similar in cost, yet
can offer more comprehensive benefits: Medicare Advantage
▪ Medicare Advantage is community rated and guaranteed issue
Understanding Medigap and different health coverage options for Seniors
2
Medicare Advantage is a viable
option for Seniors
▪ Medigap is a supplemental plan for
seniors who choose Original Medicare.
It is not Medicare, and seniors have
other choices for coverage
▪ Medigap subsidies were enabled
before Medicare Advantage was
created by the federal government
▪ Medigap market share for the Blues
has remained locked in place because
of heavy subsidies
– BCBSM has 210,000 seniors
enrolled in Medigap that our
competitors presumably want, but
can't have because subsidies
applied to our product make theirs
uncompetitive on price
▪ Medicare Advantage has
outgrown Medigap in total
enrollment because it is a
better, more affordable,
more comprehensive, and
guaranteed issue option in
the market
▪ Medicare Advantage costs
have gone down over time
because companies are
competing on a level
playing field for
customers
What is Medigap?
Health benefit coverage differences between Medigap and
Medicare Advantage
▪ Medicare Advantage provides medical management where Medigap does not
▪ Medigap patients can receive service anywhere Medicare is accepted;
Medicare Advantage is serviced in-state by PPO and out-of-state by PPO/
providers that accept Original Medicare
▪ Medicare Advantage provides many benefits which are not covered under
Medigap:
– Some preventative service
– Allergy testing
– Vision
– Dental
– Enhanced prescription formularies (5 vs. 2-3)
– Home Infusion Therapy
– Nutrition and tobacco cessation
– Unlimited in-patient hospital
– Unlimited in-patient/ out-patient mental health
3
Seniors have health coverage alternatives to Medigap that are similar in
cost, yet offer more comprehensive benefits
SOURCE: CMS, BCBSM
1 Dental coverage is approximately $35 to $40 per month in total costs if purchased separately
Health
benefits
offered
Oakland
county
example
Coverage Included Coverage Included
Medigap package Medicare Advantage package
99.90Medicare Part B Medicare Part B 99.90
BCBSM Legacy
Medigap
122.86 BCBSM Medicare
Plus PPO
112.40
Total OOP 75
BCBSM PDP B Premium 87.30 Total OOP 243.0
Monthly total 385 Monthly total 355
Yearly Total 4,620 Yearly Total 4,260
Medigap costs 8% more than Medicare
Advantage which offers better coverage
▪ Dental
▪ Medicare Part A
▪ Coverage for conditions
excluded under Medigap
(infusion therapy, etc.)
▪ Medicare Part A
▪ Medicare Part B ▪ Medicare Part B
▪ Prescription benefits ▪ Prescription benefits
▪ Vision ▪ Vision
▪ Most Medicare
Advantage
plans provide
at least the
same cover-
age and often
at a lower cost
(including
some with Part
B subsidy)
▪ In many cases,
Medicare
Advantage
provides better
coverage at a
meaningfully
lower cost
MA plan
includes
dental1
4
✓✓
Included
Optional
Alternatives to Medigap are similar in cost and quality but don’t hurt small
businesses and individuals (Kent County)
64 6057
139 6883 213
207 268
0
100
200
300
400
167
Un
ite
d M
ed
ica
re C
om
ple
te
Plu
s (
HM
O-P
OS
)
275
275
0
Hu
man
a G
old
Ch
oic
e
H81
45
-00
5 (
PF
FS
)
318
261
BC
N A
dva
nta
ge C
las
sic
(HM
O-P
OS
)267
207
Pri
ori
ty M
ed
ica
re V
alu
e
(HM
O-P
OS
)
217
217
0
Pri
ori
ty M
ed
ica
re
(HM
O-P
OS
)
255
191 228
41
Me
dic
are
Plu
s B
lue
Sig
na
ture
(P
PO
)
304
221
Pri
ori
ty M
ed
ica
re S
ele
ct
(PP
O)
267
199
Me
dic
are
Plu
s B
lue
As
su
re (
PP
O)
306
78
OM
+B
CB
S P
lan
C+
PD
P B
332
125
BC
N A
dva
nta
ge
Pre
sti
ge
(H
MO
-PO
S)
388
175
Hu
ma
na
Ch
oic
e
H5
47
0-0
05
(P
PO
)
269
OM
+M
yB
lue
MG
F+
PD
P B
346
Monthly Member Costs$
KENT COUNTY - RANKED BY MEMBER ENROLLMENT
Top 10 Options by enrollment Including Prescription Drug Coverage
SOURCE: BCBSM Business Segment Reports, 1998-2010; Projected subsidies based on historical enrollment, rate increases, and claims data
Monthly Member Premium
Member Cost Sharing
Medicare Advantage is a single plan that replaces the need for combining original
Medicare with various Medigap and Part-D Prescription drug coverage plans
▪ In this Kent County example, Medigap subscribers pay more in total premiums and
cost-sharing payments than 13 out of 14 substitute Medicare Advantage plans
▪ Switching to an average-priced Medicare Advantage plan would save each
Michigan senior citizen almost $500 per year
Original Medicare +
BCBSM Medigap Plan C
+ Part D prescription drug
coverage
Average weighted by
enrollment of $289
5
Alternatives to Medigap are similar in cost and quality but don’t hurt small
businesses and individuals (Oakland County)
11869 96 222 103 105 153 200 78
108 207 268
0
100
200
300
400
Me
dic
are
Plu
s B
lue
Sig
na
ture
(P
PO
)
339
221 214125
HA
P S
en
ior
Plu
s
Hen
ry F
ord
(H
MO
)
297
189
Me
dic
are
Plu
s B
lue
Vit
ali
ty (
PP
O)
332
254
BC
N A
dva
nta
ge
res
tig
e (
HM
O-P
OS
)
375
175
All
ian
ce
Med
ica
re
(PP
O)
360
207
HA
P S
en
ior
Plu
s –
Ex
pa
nd
ed
Ne
two
rk (
HM
O-P
OS
)
312
207
BC
N A
dva
nta
ge
Cla
ss
ic (
HM
O-P
OS
)
310
207M
ed
ica
re P
lus
Blu
e
As
su
re (
PP
O)
389
167
Hu
man
a C
ho
ice
R5
82
6-0
06
(R
eg
ion
al
PP
O)
305
209
HA
P S
en
ior
Plu
s
He
nry
Fo
rd (
HM
O)
283
Monthly Member Costs$
OM
+M
yB
lue
MG
F+
PD
P B
346
78
OM
+B
CB
S P
lan
C+
PD
P B
332
SOURCE: BCBSM Business Segment Reports, 1998-2010; Projected subsidies based on historical enrollment, rate increases, and claims data
Monthly Member Premium
Member Cost Sharing
Medicare Advantage is a single plan that replaces the need for combining original
Medicare with various Medigap and Part-D Prescription drug coverage plans
OAKLAND COUNTY - RANKED BY MEMBER ENROLLMENT
Top 10 Options by enrollment Including Prescription Drug Coverage
▪ In this Oakland County example, Medigap subscribers pay more in total premiums
and cost-sharing payments than 15 out of 24 substitute Medicare Advantage plans
▪ Switching to an average-priced Medicare Advantage plan would save each
Michigan senior citizen almost $250 per year
Original Medicare +
BCBSM Medigap Plan C
+ Part D prescription drug
coverage
Average weighted by
enrollment of $313
6
Alternatives to Medigap are similar in cost and quality but don’t hurt small
businesses and individuals (Wayne County)
69118 96 103 222
108 105 20075
153207 268
0
100
200
300
400
OM
+B
CB
S P
lan
C+
PD
P B
332
OM
+M
yB
lue
MG
F+
PD
P B
All
ian
ce
Med
ica
re P
PO
(PP
O)
360
Monthly Member Costs$
125207
Mo
lin
a M
ed
ica
re O
pti
on
s
(HM
O)
285
210
375
175
HA
P S
en
ior
Plu
s -
Ex
pan
de
d
Netw
ork
(H
MO
-PO
S)
312
BC
N A
dva
nta
ge
Pre
sti
ge (
HM
O-P
OS
)
207
HA
P S
en
ior
Plu
s
Hen
ry F
ord
(H
MO
)
297
189
Me
dic
are
Plu
s B
lue
As
su
re (
PP
O)
389
167
BC
N A
dva
nta
ge
Cla
ss
ic (
HM
O-P
OS
)
310
207
Hu
man
a C
ho
ice
R5
82
6-0
06
(R
eg
ion
al
PP
O)
305
209
Me
dic
are
Plu
s B
lue
Sig
na
ture
(P
PO
)
339
221
HA
P S
en
ior
Plu
s
-H
en
ry F
ord
(H
MO
)
283
346
78
214
Medicare Advantage is a single plan that replaces the need for combining original
Medicare with various Medigap and Part-D Prescription drug coverage plans
SOURCE: BCBSM Business Segment Reports, 1998-2010; Projected subsidies based on historical enrollment, rate increases, and claims data
Monthly Member Premium
Member Cost Sharing
Average weighted by
enrollment of $312
WAYNE COUNTY - RANKED BY MEMBER ENROLLMENT
Top 10 Options by enrollment Including Prescription Drug Coverage
▪ In this Wayne County example, Medigap subscribers pay more in total premiums
and cost-sharing payments than 13 out of 21 substitute Medicare Advantage plans
▪ Switching to an average-priced Medicare Advantage plan would save each
Michigan senior citizen almost $250 per year
Original Medicare +
BCBSM Medigap Plan C
+ Part D prescription drug
coverage
7
While some claim that insurers can deny Medigap coverage under ACA,
federal and state law dictate otherwise
“…this legislation does away with the
insurer of last resort in Michigan which
means when the provisions in this law
run out, the 9 year rate freeze on
Medigap policies, it would be legal for all
insurers to deny coverage for a senior
with a pre-existing condition.”
– Don Hazaert,
Michigan Consumers for Healthcare
(House Insurance Committee meeting,
11/13)
Opponents have made incorrect claims
regarding Medigap issuance
“The issuer of a Medicare Supplemental
Policy may not deny or condition the
issuance or effectiveness of a
Medicare Supplemental Policy, or
discriminate in the pricing of the policy,
because of health status, claims
experience, receipt of health care, or
medical condition in the case of an
individual for whom an application is
submitted prior to or during the 6 month
period beginning with the first month as
of the first day on which the individual is
65 years of age or older and is enrolled
for benefits under part B.”
- Social Security Act Section 18821
The law states that Medigap issuance
cannot be denied due to health status
1 Similar language can be found in Michigan’s Public Act 218 of 1956, Chapter 38
8
Outside of open enrollment period, there are many other situations in which
individuals have guaranteed issue right to Medigap
From CMS publication: Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare, 2012
Medigap is always guaranteed issue
during the open enrollment period…
▪ Both federal and state law require
that during the Medigap open
enrollment period, all Medigap
health insurance issuers must
make all Medigap policies
available to individuals on
guaranteed issue basis with no
health status underwriting
▪ There are also certain special
situations when Medigap guaranteed
issue goes into effect
…and guaranteed issue
during special situations
▪ One decides to switch to original Medi-
care within one year of enrollment in
Medicare Advantage (when first eligible)
▪ One loses Medigap when Medigap
insurer goes bankrupt
▪ One loses Medigap when Medigap
coverage ends (through no fault of the
individual)
▪ One’s insurer leaves Medicare or stops
providing care in residence area (while
individual is enrolled in Medicare
Advantage)
NOT EXHAUSTIVE
9
SOURCE: CMS
A highly competitive Medicare Advantage market exists in Michigan, with
numerous options available for seniors: 23 private health insurers offer 86
MA plans
Insurers include Aetna Medicare, Alliance Medicare PPO, Blue Care Network, Blue Cross Blue Shield of Michigan, Care Improvement Plus, Erickson
Advantage, Express Scripts Medicare, First Health Part D, HAP Senior Plus, HealthPlus, Humana Insurance Company, Paramount Elite, Priority Health
Medicare, SilverScript, SmartD Rx, United American Insurance Company, UnitedHealthcare, Universal American Corp., WellCare
7
9
17
7
13
16
9
17
19
13
1012
18
11
11
11
9
20
22
17
99
18
11
24
20
9
15
20
14
9
15
22
14
11
9
19
1817
17
17
11
20
13
16
20
9
9
27
13
9
10
15
9
19
14
26
17
7
17
14
30
17
11
9
12
7
10
17
7
15
20
23
14
19
9
21
19
14
2528
12
Number of MA plans in Michigan counties, 2013
▪ On average 15
insurers compete
in each county
▪ Each county has
between 7 and 30
MA plans from
which to select
In contrast, the Medigap
market is much less
competitive due to the
required BCBSM subsidy
10
Because Medicare Advantage is a competitive market, plan prices have
come down over the last 3 years as the number of plans has grown
544551
366+49%
201220112010
SOURCE: CMS
70.773.280.2
-12%
201220112010
Number of non-employer Medicare
Advantage plans
Michigan1
Average monthly premium of non-
employer Medicare Advantage plans,
Dollars per month, Michigan1
1 Excludes Special Needs plans
11
CONCLUSION:
This legislation ensures Seniors will continue to have access to affordable,
high quality care
12
▪ The legislation ensures the AG agreement to freeze Medigap Rates
for the next four years will stay in place
▪ After the freeze, the legislation specifies that over half of the
revenue spent yearly from the $1.5 billion contribution will be a
targeted, more effective Medigap program to help Seniors in need
▪ This new Medigap structure will not require small business to pay
more for BCBSM insurance to fund the subsidy – which harms their
ability to provide insurance for their employees and create jobs
▪ Seniors have an alternative to Medigap that is similar in cost, yet
can offer more comprehensive benefits: Medicare Advantage
▪ Medicare Advantage is community rated and guaranteed issue
BCBSM will make contributions of $4.1 billion to Michigan over the next 18
years
13
$4,100,000,000
total contribution
over the
next 18 years
▪ Under Governor Snyder’s proposal, BCBSM will
make substantial contributions to the State of
Michigan
– $1.5 billion in social mission contributions
– $1.8 billion in estimated taxes
– $800 million Medigap subsidy (through 2016)
▪ This is an unprecedented opportunity for Michigan
