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Archive for the ‘Part D’ Category

On Friday, February 15th, 2013, CMS released the 2014 Medicare Part D deductibles and co-insurance limits for 2014.  This was a part of their “2014 Advance Call Letter” which gives Medicare advantage plans and Medicare Part D plans advance notice of funding for calendar year 2014 so that they can start formulating their bids for the following year.  The final notice will be published by CMS on April 1st, 2013.

In a very unusual situation, the Medicare Part D deductibles and co-insurance limits actually declined in 2014 versus 2013.  The Medicare Part D deductible will fall from $325 to $310.  The Initial Coverage Limit will decline from $2,970 in 2013 to $2,830 in 2014.  The Initial Coverage Limit is the total negotiated value of prescription drug costs (both the insurance company portion and the Medicare beneficiary’s cost share) before the Medicare beneficiary reaches the “Doughnut Hole” or Coverage Gap.

The “Out of Pocket Threshold” decreased from $4,750 in 2013 to $4,550 in 2014.  The “Out of Pocket Threshold” is the amount of cost sharing borne by the Medicare beneficiary before they leave the Coverage Gap and enters the “Catastrophic Coverage” portion of the Medicare Part D benefit.  The “Out of Pocket Threshold” includes the following costs:  (1) the deductible; (2) cost sharing while in the Initial Coverage Limit; and (3) cost sharing while in the Coverage Gap.  Additionally, the portion of prescription drug cost borne by the Pharmaceutical companies for brand name prescription drugs in the Coverage Gap (this is sometimes called the Part D Rebate) is also included in the “Out of Pocket Threshold”.

Due to the provisions of the Affordable Care Act (ACA), Medicare beneficiaries will continue to pay lesser and lesser amounts for both their brand name and generic prescription drugs.  Ultimately, by 2020, the entire “Coverage Gap” will be eliminated; however, this is being phased in during the period from 2010 through 2019.  For example, in 2013, Medicare beneficiaries will pay 47.5% of brand name drugs and 79% of the cost of generic drugs.  The “rebate” is 50% of the cost of brand name drugs, so the insurance company actually pays 2.5% of brand name drugs and 21% of generics in the coverage gap.  In 2014, Medicare beneficiaries will continue to pay 47.5% for brand name drugs (50% covered by rebate and 2.5% by the insurance company), but the cost sharing for generic drugs will drop from 79% to 72%.

The following graph illustrates the changes in Plan and Member Cost Share from 2010 through 2020 with 2014 highlighted.

partdgraph

Finally, once the Medicare beneficiary reaches the “Out of Pocket Threshold” and into the catastrophic coverage, they will see the minimum copay decline as well.  The minimum copay for generics will decline from $2.65 copay to $2.55 copay in 2014.  For brand name drugs, the minimum copay will decline from $6.60 copay to $6.35 copay in 2014.  The Medicare beneficiary will pay either 5% of the negotiated cost of the drug or the minimum copays listed above, whichever is greatest.

On April 1st, 2014 CMS will finalize these dollar amounts; however, it is unlikely that they will not deviate by very much.

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Yuval Levin’s opinion piece appears on the National Review Online’s “The Corner” blog.  Yuval offers some counterpoint to Paul Krugman’s “The Medicare Killers” opinion in the New York Times.  I’ll admit that I’m not that familiar with Ryan’s Medicare proposal, other than it would not apply to anyone over the age of 55.  The plan is labeled as the “Voucherization” of the Medicare system, though it may more closely resemble the “competitive” bid process in the Medicare Part D world.  The competitive bidding on Part D benefits has found success in that Part D premiums are projected to hold steady for the third straight year and that costs are running well under initial projections.

The chart below shows the actual spending on the Part D program from 2006 through 2011 versus the CBO estimates in 2003.  Spending for 2012 and 2013 are estimates versus the CBO projections.  The Part D program may actually be one of the few government programs which is coming in under initial projections.  For example, in 2012, the Part D program is currently projected to actually cost $61 billion versus an initial CBO projection of $105 billion (42% LESS than originally projected).  Competition was not the only factor in driving down costs, other factors included a lower than projected enrollment (CBO estimated 87% enrollment versus actual enrollment of 73%, a 16% difference) and a strong generic drug pipeline in the past few years.

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NEW OFFER:  Click here to learn about our 2013 AHIP Medicare Training Reimbursement Offer!

Here is some general information regarding the 2013 AHIP Medicare Advantage and Medicare Part D General Compliance Traning:

  • The general website is https://www.ahipmedicaretraining.com.
  • If you have registered in the past, your username is your National Producer Number (NPN).  You can find your NPN by searching here.
  • If you haven’t passed the AHIP exam in 2012, you will need to take all 5 modules for 2013 before you are allowed to take the exam.  If you passed the exam in 2012, you will only need to take modules 4 and 5.  IMPORTANT:  The exam will cover all 5 modules, so even if you passed in a prior year, you should review modules 1, 2 and 3.
  • You can save a PDF copy of the 5 modules for self-study or print the slides.  The link is on the left bar after you click on a module..  Just right click and save to your hard drive or left click and print.  The PDF copy of the study modules DO NOT have the practice questions (see next bullet).
  • When clicking through the study modules, you can skip the practice questions, but you really shouldn’t.  Answering the practice questions wrong has no impact passing the AHIP, so don’t worry if you get the practice answers wrong.  Take your time with the practice questions and make sure you understand why each answer is correct.
  • The cost of the training is $150 if you do the training through the https://www.ahipmedicaretraining.com website.  DON’T!!  Generally, you can find the training for $100 (save $50) by going through a insurance company’s certification website.
  • Even if you take AHIP through a carrier’s website, you can use the AHIP training for ALL companies who require the 2013 AHIP for General Compliance Certification.
  • You get 3 attempts to pass the training with a score of 90%.  If you don’t pass on the first 3 attempts, you will have to pay another fee to try the test again.  IMPORTANT:  Many companies will not accept the AHIP test results if you don’t pass on one of the first 3 attempts.
  • Many companies will offer a “reimbursement” in addition to the reduced rate for AHIP.  My suggestion is to do a little “shopping” and certify with the carrier who you believe you will be doing some business with.  Generally, the reimbursement is based on submitting a small number of applications.  However, you will not qualify for the reimbursement unless you do the initial AHIP certification through that insurance company’s certification portal.
  • Ritter will be posting detailed information on each carrier’s certification process as the details come available.  To find the certification process you are looking for, go to www.ritterim.com and search for “Certification” or click here.  (Adding the carrier’s name will improve your search results!)
  • Some states will allow you to collect CE credits for passing AHIP.  There is an additional cost if you want to get these credits.  Make sure your state accepts them before you pay the fee!

Good Luck!

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Following are the MAXIMUM commissions which CMS allows a Health Plan to pay for any 2013 Medicare Advantage enrollment:

State of California and New Jersey:

  • First Year Commission for an Initial (NOT like to like) Medicare Advantage enrollment:  $517.00
  • First Year Commission for a Replacement (Like to Like) Medicare Advantage enrollment:  $259.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $259.00

States of Pennsylvania and Connecticut and the District of Columbia

  • First Year Commission for an Initial (NOT like to like) Medicare Advantage enrollment:  $466.00
  • First Year Commission for a Replacement (Like to Like) Medicare Advantage enrollment:  $233.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $233.00

All other States:

  • First Year Commission for an Initial (NOT like to like) Medicare Advantage enrollment:  $413.00
  • First Year Commission for a Replacement (Like to Like) Medicare Advantage enrollment:  $207.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $207.00

Following are Commissions for Medicare Stand alone Part D Plans (PDP) for ALL STATES:

  • First Year Commission for an Initial (NOT like to like) Medicare Part D enrollment:  $56.00
  • First Year Commission for a Replacement (Like to Like) Medicare Part D enrollment:  $28.00
  • Renewal Commission (years 2-6, depending on CMS cycle year):  $28.00

 

 

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I’ve had the opportunity to review the 2013 Medicare Marketing Guidelines, so I wanted to share my thoughts on the MMG.  Primarily, this review is through the lens of the external agent or broker, but I’ve included some information on changes that won’t impact the agent day-to-day, but which might be “nice to know”.

Here is a link to the 2013 MMG.

Section 70.5, 70.6 and 70.7  (pages 49-51) provide the information on marketing through unsolicited contacts.  These are some of the most important sections for an agent to understand and closely watched by CMS.  I recommend any agents who are selling either Medicare advantage or Part D Medicare products review these 3 sections at least a couple times.

All of Section 120 (pages 87-94) is important for agents to understand, so I recommend reviewing this entire section thoroughly.  I will call out a few specific sections that are particularly noteworthy.

Section 120.2 (page 87) directs health plans to terminate agents (and report to the state Department of Insurance) who submit enrollment applications without holding an insurance license in the state where the Medicare beneficiary resides.

Sections 120.4 including 120.4.1through 120.4.7 deal with agent compensation, so it’s important for agents to understand how they will be paid.  It’s also important to know when they will be charged back commissions (section 120.4.6 gives the situations where a disenrollment in the first 3 months should NOT be considered a rapid disenrollment.)

Section 120.4.4 deals with developing and implementing a compensation strategy.  The first bullet talks about what CMS defines as first year commission versus renewal.  This, in my opinion, has been handled erratically by health plans.  CMS instructs that if a Medicare beneficiary enters a plan effective September 1st (for example) of 2012, the RENEWAL payments should begin in January of the following year (January 2013 in this example).  I’m still hearing about plans that wait until the plan has been in force for 1 year before paying renewals.  Note that CMS gives plans discretion (with regard to the initial payment) to either (1) pay the full initial commission or (2) pay a pro-rated amount based on the number of months which the beneficiary was enrolled.

The first bullet on page 91 deals with movement from an employer group Medicare advantage plan (Series 800) to an individual Medicare advantage plan.  This movement should create an INITIAL commission for the agent.

The fourth bullet on page 91 is interesting in that a Health Plan is able to consider an external broker the same as an “employed agent” if the external broker only represents ONE PLAN exclusively.  This means that the HP is not bound by CMS compensation guidelines.

The last bullet on page 91 deals with when a plan (OR AGENT) elect to terminate their contracts and how existing renewal compensation is handled. Many plans will not pay renewal compensation if an agent is terminated (even if “not for cause”), because of CMS’ “in good standing rules”.  This section, however, indicates that the terms of the contract can dictate remaining cycle year renewals.  This makes me believe plans may have more discretion than I previously thought.

Section 30.12 directs health plans to include their Overall Star Ratings for the plan in 3 locations:  on their website, on the Summary of Benefits and on the Enrollment Form.  There continues to be a quality focus on Medicare advantage plans and CMS will continue to highlight Star Ratings as a measure of quality.

Sections 40.8 and 40.8.1 provide guidance for the listing of telephone numbers.  Section 40.8 improves the readability of Marketing pieces in that the Hours of Operation only needs to be listed once on a marketing piece, even if the phone number is listed several times.  Section 40.8.1 mandates that if an external broker’s phone number is listed on a marketing piece, the health plan must also list their telephone number (and hours of operation once).

Section 70.10.3 provides Scope of Appointment guidance.  I recommend all agents are thoroughly familiar with this section as it is a focus area for CMS.  Note that CMS indicates that the SOA should be obtained 48 hours in advance of the appointment.  Also, if the SOA is not obtained 48 hours in advance, the agent needs to document the reason.

It is interesting in 70.10.3 that CMS indicates that plans are allowed and ENCOURAGED to employ the use of technology when acquiring SOA’s.  This includes e-mail, so I’m wondering if a plan will develop a method for obtaining SOA’s with e-mail.

Section 70.10.4 deals with “walk ins” with respect to obtaining a SOA.

Following are just some changes I find interesting:

In 2012, CMS put an additional limit on nominal gifts.  In addition to the $15 limitation, CMS put an annual cap of $50.  In 2013, CMS clarified in section 70.2 (see NOTE) that this does not include PRE-enrollment nominal gifts.  Thus plans only need to track members.  One caveat is that plans can’t intentionally make multiple nominal gifts to PRE-enrollees.  For example, they can’t have 10 different nominal gifts (say at 10 different tables) available for giveaway at one marketing event.

As a coorelary to this, section 70.3 is removing the $50 per year cap for members where Health Plans wish to incentivize their members to take advantage of certain benefits.  One example would be smoking cessation.

CMS is allowing plans to deliver some documents in formats other than paper.  This is good to see happening!  The catch here is that the member must agree to receive the documents (specifying exactly which ones) and specify the method they are willing to receive it (like e-mail).  For example, if the member agrees, the plan could deliver the ANOC letter via email.  It will be interesting to see if health plans use agents to try and promote this type of efficiency in communications (example, agent delivers the authorization for electronic delivery at the time of enrollment).  I’m sure there are some Medicare beneficiaries who would prefer getting notifications via e-mail or some other means, plus this saves time and money.

Another new item is the use of Multi-language insert (section 30.7.1) which now must be used by all plans regardless of whether or not at least 5% of their population is non-English speaking.  The multi-language insert must be used with the Summary of Benefits and the Annual Notice of Change (ANOC).

CMS did some rewording of certain disclaimers (Disclaimers are in section 50).  For example, the PFFS disclaimer which used to be about a paragraph long is not a short 2 sentence disclaimer.  CMS edited a number of disclaimers to use plain language as opposed to legalese.  For example, the PFFS disclaimer was,A Medicare Advantage Private Fee-for-Service plan works differently than a Medicare supplement plan. Your doctor or hospital is not required to agree to accept the plan’s terms and conditions, and thus may choose not to treat you, with the exception of emergencies. If your doctor or hospital does not agree to accept our payment terms and conditions, they may choose not to provide health care services to you, except in emergencies. Providers can find the plan’s terms and conditions on our website.

This has been revised to:  “A Private Fee-for-Service plan is not a Medicare supplement plan. Providers who do not contract with our plan are not required to see you except in an emergency.

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Here is a handy guide published by CMS which reviews all of the enrollment periods available to Medicare beneficiaries to enroll in Medicare advantage and Medicare Part D (includes AEP, IEP, ICEP and SEP enrollments).

Click here to view.

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Here is a link to an interview by Fox Business of Joe Baker of the Medicare Rights Center, a non-profit counseling and advocacy organization in New York.

I think he may be understating the impact of the cuts to Medicare Advantage somewhat.  He talks about the reduction from 110% to 113% of original Medicare costs being lowered to 100% in the next few years.  Current estimates for Medicare Advantage reimbursements are estimated at 107% in 2012, so there is still a bit of cutting left to do.  While it is true that these cuts don’t impact those on original Medicare, they will impact Medicare beneficiaries who currently have (or will in the future have) Medicare Advantage plans.

It’s quite true, however, that Medicare Advantage has not seen a reduction in it’s overall membership.  Frankly, this has been a bit surprising to me and could be explained by the fact that Medicare beneficiaries are satisfied with the plans in spite of the fact that the extra benefits are not as rich as they once were.

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Today we issued this press release which discusses the AgentEnroll.com technology and how this can simplify the enrollment process for you and for your clients. We are very pleased to have one of our key partners, Coventry Healthcare, participating with this program.

Keep in mind that this is FREE for ALL AGENTS who are using Ritter as their FMO for Coventry.  Also, it covers their Part D products and their Medicare Advantage products.

This method anticipates NO FACE TO FACE meeting, thus there is NO scope of appointment required to enroll a Medicare beneficiary with the AgentEnroll.com system.

If you are already appointed with Ritter for Coventry and would like us to set up a personalized website for you to begin using AgentEnroll.com, please contact Amy Shuman at 800-769-1847 (dial 224) or request AgentEnroll.com setup via our Contact Us link.  Let us know your Agent Writing Number (AWN) and a copy of your certification completion certificate.  You must be certified for 2012 to get set up for this system!

If you are not appointed with Coventry, Ritter can get you contracted and after you are certified and have an agent writing number, we can set up a website for you to use!  Click here to request contracting.

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Do you need insurance product training? RitterIm.com has an up-to-date posting of all the top carriers’ trainings on our event calendar. Registration is “one click” away at Ritter Insurance’s “Events’ Calendar”! (You must be logged in to register!)
  • Monday, August 29th; Coventry AEP Broker Seminar is being held in Grantville, PA and is open to PA agents.  Universal Health Care Certification Training is being held in St. Petersburg; Houston, TX; Mt. Vernon, IL and Tupelo, MS. 2012 Altius Product Training seminar is being held in South Jordan, UT. Foresters New Producer Training and Foresters Producer’s Guide to Member Benefits seminars are both open to all agents.
  • Tueday, August 30th; Baltimore Life Tele-sales Training for Silver Guard Products Using INSpeed webinar is open to all Baltimore licensed agents. Coventry HAPA-CCP2012 Product Training seminar is being held in Mars, PA. Coventry AEP Broker Seminar is being held in Lancaster, PA. Coventry Health Care of Texas 2012 Medicare Broker Product Training seminar is being held in Plano, TX. Coventry, Part D Prescription Drug Benefit-All the Details seminar is being held in Augusta, GA. Florida; CoventryCCP Product Training webinar is open to all FL agents. Coventry SFL Onsite CCP Product Training seminar is being held in Stuart, FL. Universal Health Care Certification Trainings are being held in Fairfax, VA; Kansas City, MO; Stuart, FL; Houston, TX; Jackson, MS and Greensboro, NC. Genworth Roundtable Discussion to Grow Senior Market Business seminar is being held in Missoula, MS. Foresters LifeFirst Training webinar is open to all agents.
  • Wednesday, August 31st; Coventry HAPA-CCP 2012 Product Training seminar is being held in Boardman, OH. Coventry AEP Broker Seminar is being held in Allentown, PA. Coventry Health Care of Texas 2012 Medicare Broker Product Training seminar is being held in Houston, TX. Universal Health Care Group Face to Face Trainings are being hosted in Springs, MD; St. Louis, MO; Boca Raton, FL; San Antonia, TX; North Dublin, OH; Monroe, LA and Raleigh, NC.
  • Thursday, September 1st; Coventry HAPA-CCP 2012 Product Training seminar is being hosted in Monroevill, PA. Coventry 2012 Personal Care Product training seminar is being hosted in Rockford, IL. Coventry Health Care of Texas 2012 Medicare Broker Product Training seminar is being hosted in Antonio, TX. Universal Health Care Certification Meeting are being held in Orlando, FL; Rockville, MD; Perrysburg, OH; Grapvine, TX and Fayettevill, NC. Foresters PlanRight Training and Foresters SMART UL Training webinars are open to all agents. Aetna 2012 Product Training webinars open to agents in CT, DE, ME, NJ, NY, PA, VT, NH and Ri.
  • Friday, September 2nd;  Universal Health Care Certification Meeting seminar is being held in Charlotte, NC.
  • Monday, September 5th; There are no scheduled training. Happy Labor Day!

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Ritter Insurance Marketing is committed to providing our agents with information about the insurance industry. Below are links to the lasted news in your state. (Must be logged into ritterim.zendesk.com/ to view forums) 

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