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The Medicare Supplement Market Still Growing Strong

Selling Medicare Supplement plans is a booming business. Medigap plans were enrolled close to 12.6 million American seniors in 2016, up six percent from 2015.

The sale of Med Supplement plans or Medigap is doing well with not signs of slowing down. In fact, the most recent Healthcare Business Strategy report, authored by Mark Farrah Associates’ (MFAs), Medicare Supplement plans paid out $21.7 billion in claims in 2016 and earned $27.9 billion in premiums.

The most popular Medigap plan was Plan F, which is considered to be one of the most comprehensive policies available on the market today. According to MFAs figures close to 7 million people enrolled in Plan F representing 55 percent of the market. However, in 2020 Plan F will no longer exist as an option for newly eligible Medicare recipients thanks to the Medicare Access and CHIP Reauthorization Act of 2016 (MACRA). A second Medigap plan that grew in popularity was Plan G, registering a jump of 364,000 members in 2016.

American seniors could always rely on the Medicare program to help them stay healthy, while allowing them to choose plans that suit their lifestyle and budgets. However, the future of Medicare is uncertain. While on the campaign trail, Trump stated that he would not cut Medicare or Social Security. However, the budget director Mick Mulvaney, told a conservative radio host that he is looking for ways to reform Social Security, Medicare and Medicaid, working around President Trump’s campaign trail promise to leave the programs untouched.

Medicaid may face significant changes and become a block-grant program where each state gets a fixed sum of money from the federal government, which may be a smaller amount than what they receive now. At present, the amount of money a state qualifies for is based on how many people are enrolled in Medicaid.

Currently, according to figures presented to the Senate Budget Committee by Mulvaney, the national debt has risen up to $20 trillion, and without reining in social programs such as Medicare and Social Security the debt will continue to grow. Mulvaney advocates core fundamental changes, such as increasing the retirement age and trimming Medicare benefits for wealthier recipients under the age of 55 to help reduce the burgeoning debt.

Last week, President Trump’s proposed budget landed on Capitol Hill. The plan cuts Medicaid, welfare, food stamps and the social security disability program. Trump’s budget, however, faces opposition from both parties and will likely not become law.

Posted on Friday, June 16th, 2017. Filed under Medicare.

What is the future of the health care bill in the Senate?

Right before the House vote on the new health care legislation, the Senate approved a $1.1 trillion spending bill that will finance the government until September and prevent a government shutdown. The approval of the spending bill allowed the House to safely pass the American Health Care Act (AHCA).

While House Speaker Paul Ryan is hopeful that the Senate can pass a bill meant to replace the Affordable Care Act (ACA) in a couple months, this is highly unlikely. The Senate, which moves more slowly than the House, will now begin work on creating a health care plan that will be acceptable by all the factions of the Republican party. This could mean that the Senate will need to write a new bill all together.

Because the members of the GOP are divided on the issue of a new health care bill it may prove to be a challenging task to pass it. Furthermore, the Senate needs a 51-vote majority to pass the bill, which allows them only two defections. The Senate is expected to take until August to push a bill through with the needed support. When the Senate produces a new or updated bill it will return to the House for a vote.

Until the Senate and House agree on a new health care bill, the ACA remains in place. Thus, those selling and buying health insurance will be adhering to the rules and regulations already in place.

Posted on Tuesday, May 30th, 2017. Filed under Health Insurance.

The repeal and replacement of the ACA: Where is it at?

On May 4, Congress approved legislation to repeal and replace major parts of the Affordable Care Act (ACA). The latest version of the American Health Care Act (AHCA) rolls back the expansion of Medicaid and allows states to opt out of covering patients with pre-existing conditions. The bill now faces uncertainty in the Senate.

The proposed AHCA would end Medicaid’s status as an open-ended entitlement. The bill will also repeal taxes on the super rich, insurers and drug companies. Furthermore, under the new bill, states could adjust coverage for essential medical services such as maternity and emergency care. The latest AHCA seems to be a patchwork of provisions.

The bill will most likely be amended by the various Republican factions within the Senate. In addition, the Senate Republicans have been working on their own version of the health care bill, which will consider the ideas already in the House bill. Once the Senate passes its new or updated version of the AHCA, that bill will return to the House for another vote.

However, the biggest unanswered question with any replacement of the ACA is that no one can calculate how many people would be covered under a new health care bill. By May 22 the Congressional Budget Office (CBO) will release its report on the cost and potential coverage of the new AHCA. The analysis of this bill will be complicated by the fact that it leaves a lot to the states. It will be up to the Senate Republicans to consider the implications of the upcoming CBO report.

Posted on Thursday, May 18th, 2017. Filed under Health Insurance.

How to get Medicare Part D drug coverage?

Generally it is a good idea to get drug coverage when you are first eligible because if you do not, you may pay a late enrollment penalty. You can only avoid a late fee if you either take advantage of the Extra Help program or have other credible prescription drug coverage from a union or employer.

If you do not know if you are going to be assessed a penalty, Medicare will let you to know what the penalty is and what amount you need to pay for your premium. Typically, the penalty is then paid as long as you have a Medicare drug plan. Therefore, it is important to know the deadline of enrollment and do so on time in order to avoid penalties.

There are two ways for you to obtain prescription drug coverage. One way to do this is through a Medicare Prescription Drug Plan Part D, which adds drug coverage to the original Medicare; some Medicare Private Fee-for-Service plans; Medicare Medical Savings Account plans; or some Medicare Cost plans. The second way to get coverage is through a Medicare Advantage Plan Part C where patients get all of Medicare Part A (hospital), Medicare Part B (medical), and Part D (prescription drugs) in this plan. Those who enroll must have Part A and Part B to be in a Medicare Advantage Plan (MA-PD).

Here are the four ways to join a drug plan:

Note: Joining a Medicare drug plan, may impact your Medicare Advantage Plan (Part C) and you will revert back to Original Medicare if you join a Medicare Prescription Drug plan (Part D) and if your Medicare Advantage Plan included coverage for prescription drugs.

Posted on Friday, April 28th, 2017. Filed under Medicare.

What happens when a person reaches the Medicare Part D deductible?

It is important to understand that not all patients have an annual deductible, so the observations in this post refer only to those who do pay a deductible. Once that deductible limit has been reached, what usually happens is that the patient then has to pay a co-insurance or co-payment for every prescription. Co-payments are typically a fixed dollar amount. Co-insurance payments have the individual pay a percentage of the total cost of the drug.

Medicare Part D also has what is referred to as catastrophic coverage. If a patient’s annual out-of-pocket reaches $4,950 (2017), only a small co-payment or co-insurance amount is paid for all covered drugs for the balance for the year.

If you qualify as low income Medicare Part D has an Extra Help provision that may help an individual or family reduce drug costs even more. Those who qualify do not pay more than $3.30 per covered generic drugs or $8.25 for a brand name covered drug.

Want to find your level of possible Extra Help? Visit the Medicare website at:

Posted on Friday, April 21st, 2017. Filed under Medicare.

How much is Medicare Part D?

Medicare Part D costs vary greatly from one individual to the next. Expenses, per person, change in response to the drug used, the drugstore filling it out, the type of plan and if the person qualifies for Medicare’s Extra Help program. The Extra Help program helps people with low incomes pay prescription drug program costs like premiums, deductibles and co-insurance fees.

Medicare Part D costs vary because all the Part D plans have their own terms and rules for the policies offered. All plans are required to offer minimum coverage that then can be built on with additional offers. For example, some plans will provide tiered systems where only some brand-name drugs are less expensive.

Nonetheless, there are some common features to be found in all Part D Medicare Plans. For instance, most individuals pay a monthly premium that increases with the person’s salary. All patients do not pay the monthly premium and this is applicable when it comes to deductions. Many Part D Medicare plans charge an annual deductible prior to coverage becoming effective. Deductibles are different for each plan. For 2017, Medicare has stated the maximum deductible is $400.00.

Posted on Friday, April 14th, 2017. Filed under Medicare.

What does Medicare Part D cover?

Medicare Part D requires clients to buy plans from a private insurance company. That means that each insurer offering Part D has its own list of covered drugs, the plan formulary.

In order for each insurance company to be able to provide information to potential and existing clients, they break the drugs into various tiers with differing costs. Thus, the drugs in the lowest tier generally have a lower co-insurance or co-payment cost and vice versa — higher-cost drugs usually have a higher co-insurance or co-payment price. There is an exception to this rule, however, if a doctor wants a patient to take a drug in a higher tier, it is possible for patients to obtain the drugs at an affordable price.

The formulary usually stays the same during the year, but it is possible for a plan to change coverage providing it follows Medicare’s rules and regulations. Patients affected by such a change must have at least 60 days’ notice before changes go into effect. Additionally, a refill request must be honored, plus the patient is offered a 60-day supply under the previous plan before changing to the new plan.

Interested in finding out what drugs are covered in your area? Check out Medicare’s plan finder tool at:

Posted on Friday, April 7th, 2017. Filed under Medicare.

The proposed GOP healthcare plan and what it means for the ACA

Until Congress passes the proposed American Health Care Act, the current rules and regulation regarding the ACA remain in place. This means that the following aspects of the ACA must still be complied with for the duration.

Some of the rules and regulations that must still be followed include, but are not limited to:

  • Anti-discrimination rules related to transgender benefit protections and their enforcement
  • Individual and employer mandates and fines/taxes for non-compliance
  • Market reform mandates and IRS tax enforcement from large employers whose self-insured group plans do not satisfy market reform rules
  • Reporting obligations/IRS tax enforcement of dues from large companies failing to accurately and in a timely manner report coverage offered to workers/dependents

The rising opposition to the proposed American Health Care Act, is likely going to cause a delay in the ability for the Act to pass through the House and Senate. Many voices of opposition are voicing their concerns that rushing through this healthcare act and not allowing it to be properly vetted will have the potential to adversely affect many Americans.

The next few months or years are likely to be confusing and frustrating. Insurance agents, brokers and carriers are going to be doing their best to stay on top of the latest changes.

Posted on Friday, March 31st, 2017. Filed under Health Insurance.

How the executive order affects larger employers?

Late January, President Trump signed a healthcare executive order that could impact employers, even if it did not specifically mention them.

The executive order instructed federal agencies to, “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement that would impose a fiscal burden,” on states, health care providers or individuals. The order can undo individual mandates to purchase insurance and other mandates placed on employers, like providing full-time employees with coverage.

The employer mandates may be regarded as a fiscal burden, according to the wording of the executive order. The employer mandate may become questionable if there is no tax on individuals who do not have minimum essential health insurance.

Nonetheless, it is advisable for all employers to continue complying with the established rules by the ACA until the GOP proposed American Health Care Act (or another act) is implemented.

The transition from the ACA to the proposed American Healthcare Act may be painful and prolonged. Stay on top of what is happening in the industry and understand your existing health coverage to be able to evaluate what may replace it.

Posted on Monday, March 27th, 2017. Filed under Health Insurance.

How does the executive order affect current guidance in relation to the ACA?

Late January, President Trump signed an executive order that urges his administration to repeal and replace the Affordable Care Act (ACA). The order allows legislators to fight the current health care system by adding new rules and regulations. The executive order points the administration to allow states to decide the changes in healthcare policy.

This order sends a signal to the American people that health care laws are coming. The order itself, however, does not affect the ACA directly. In fact, the executive order is broad in scope and it raises a number of questions such as:

  • How will changes impact employers offering group health care plans?
  • How does the order affect what is currently in place under the ACA rules and regulations?
  • If the mandate for individuals to have minimum essential health insurance or pay a penalty is suspended, how does that affect employers?

With so many questions to be answered, the plan to replace ACA is not going to be immediate. Given the nature of the legislative process, checks and balances, public input on various issues, various legal issues and political agendas, it may be several years before the ACA is replaced.

Posted on Friday, March 24th, 2017. Filed under Health Insurance.