Long-Term Care Insurance Explained

What is long-term care insurance?

As the name states, long-term care insurance (LTCI) helps pay for the expenses of long term care not covered by regular health insurance, Medicare, Medicare Advantage, or Supplements. Some people are surprised to learn that Medicare doesn’t cover LTCI. The typical services include assistance with daily activities (such as bathing, dressing, eating, toileting, transferring, and continence), and benefits are triggered by needing help with two of the six ADLs.

Here’s a breakdown of what long-term care insurance covers and how it works:

What It Covers

Personal Care: Assistance with basic activities like bathing, dressing, eating, toileting, and transferring (getting in and out of bed or a chair).

1. Home Health Care: In-home care.

2. Nursing Home Care: Coverage for staying in a nursing home or skilled nursing facility.

3. Assisted Living: Support for people who need help with ADLs but do not need full-time nursing home care.

4. Adult Day Care: Services provided during the day for people who need supervision and care but live independently at night.

5. Hospice Care: End-of-life care and support.

When I quote LTCI, I like to include a include a rider for home health care.

Why Is It Important?

Long-term care can be terribly expensive, yet many people underestimate the costs of needing extended care. While Medicare covers some healthcare-related expenses, it does not pay for long-term custodial care or personal care. Medicaid does cover long-term care, but only for those with low income and limited assets. Long-term care insurance helps bridge the gap, providing financial security and ensuring that you can access the care you need without depleting your savings.

Who Needs Long-Term Care Insurance?

Purchasing LTCI is typically recommended for people who:

• Are in their mid-50s to mid-60s and want to plan ahead for potential future care needs.

• Have significant assets they want to protect, as long-term care services can be very expensive.

• Want to reduce the burden of caregiving from family members or loved ones.

Key Features of Long-Term Care Insurance

• Premiums: You pay monthly or annual premiums for long-term care insurance, and the amount depends on factors like your age, health, and the type of coverage you choose.

• Benefit Period: This is the duration of time the insurance will cover long-term care. Benefit periods can range from a few years to a lifetime. I typically recommend covering the average length of stay in an assisted living facility, which is 3.7 years for women and 2.2 years for men, so a four-year benefit period will cover the vast majority of clients needing care.

• Daily Benefit Amount: The amount the insurance pays per day for care services. You choose a daily benefit based on what you expect your care costs to be.

• Elimination Period: This is the waiting period before the insurance benefits begin. It typically ranges from 30 to 180 days. The shorter the elimination period, the higher the premium.

• Inflation Protection: Many policies offer inflation protection, meaning your benefits will increase over time to keep pace with rising care costs. If you buy an inflation rider, it will increase your premium.

When to Buy Long-Term Care Insurance

As stated above, the best time to purchase long-term care insurance is when you are relatively young and healthy, typically in your 50s or early 60s. Buying early allows you to lock in lower premiums and increases the chances that you will qualify for coverage.

Pros of Long-Term Care Insurance

• Financial Protection: Helps cover the costs of long-term care, protecting your savings.

• Choice and Flexibility: You can choose where and how you receive care, whether at home, in an assisted living facility, or a nursing home.

• Peace of Mind: Provides peace of mind knowing you won’t have to burden family members with caregiving responsibilities or worry about covering care costs.

Cons of Long-Term Care Insurance

• Cost: Premiums can be expensive, and there’s a chance you may never use the policy.

• Complexity: Policies can be complicated with different terms and exclusions, making it hard to compare options.

• Premium Increases: Some policies may increase their premiums over time, which can become burdensome for retirees on fixed incomes.

• Waiting Period: Many policies have an elimination period before benefits kick in, which can delay care.

Overall, long-term care insurance is a tool to help protect your financial well-being if you need extended care in the future, but it’s important to carefully evaluate the policy terms and consider your long-term needs.

Medicare Parts B and D Premiums and Deductibles will Show Increases for 2025

In what has become an annual ritual, the Centers for Medicare & Medicaid Services (CMS) have announced the 2025 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2025 Medicare Part D income-related monthly adjustment amounts.

Rates are based on annual income from two years prior, which means that you income in 2023 will determine the rates you pay for 2025.

The Decline of Medicare Advantage Star Ratings: What Does It Mean?

Medicare star ratings, which range from one to five stars, serve as a tool for evaluating the quality of care provided by Medicare Advantage plans. For the third year in a row, Medicare Advantage plans have seen a decline in their average star ratings. For 2025, the average star rating is 3.92, down from 4.07 in 2024. In 2025, only seven plans received a five-star rating, down from 38 in 2024.

What does this decline mean?

Understanding Medicare Advantage Star Ratings

Medicare Advantage (MA) plans were created as a private insurance alternative to traditional Medicare, offering the same benefits as traditional Medicare, plus a range of extras like dental and vision care. In order to help consumers make informed choices, the Centers for Medicare & Medicaid Services (CMS) assigns star ratings based on performance metrics such as customer satisfaction, health outcomes, and service quality. Higher ratings typically lead to increased funding and attract more enrollees, making them a significant focus for insurance carriers.

The Declining Trend - What’s Going On?

According to a recent report, CMS has not made any major changes in star ratings methodology recently. A close look reveals that several factors may be responsible:

1. Increased Standards: Medicare Advantage plans are rated on 40 clinical quality and member service measures, and for 2025 CMS raised the cut points for many of the measures, meaning plans had to perform better to get higher star ratings. While this is a step toward ensuring better healthcare, it can also result in lower star ratings for plans that previously scored higher.
   Two insurance carriers have formally challenged the lower star ratings: UnitedHealthcare filed a lawsuit Sept. 30, disputing the inclusion of a secret shopper phone call in CMS’ star ratings calcuations that they say was flawed. Humana said that there may be potential errors in CMS' calculations after experiencing a drop after "narrowly missing industry cut points on a small number of measures."

2. Pandemic Impact: The COVID-19 pandemic has disrupted healthcare services across the board, and many Medicare beneficiaries faced challenges accessing care. This obviously affected the insurance companies’ ability to provide services. Even though it was beyond the insurors’ control, it impacted their stars.

3. Consumer Expectations: As beneficiaries become more informed and engaged, their expectations for quality care have risen.

4. Data Reporting Challenges: Some plans have struggled with the data reporting requirements set by CMS, leading to potential inaccuracies in their performance assessments.

What does it mean?

For Medicare beneficiaries, a decline in star ratings could have a few implications. For one thing, it’s possible that the lower ratings may indicate a decline in the quality of care provided. Since Advantage plans must earn a rating of 4 or higher to receive bonus payments from CMS, many plans may receive less funding from CMS, potentially resulting in reduced benefits or higher costs for enrollees.

Looking Ahead

Addressing the decline in star ratings will require concerted efforts from the various stakeholders:

• Insurance Providers: Plans need to focus on improving care delivery, enhancing member engagement, and ensuring compliance with CMS requirements. All those mailings my policyholders complain about will NOT cease.

• Policymakers: CMS may need to consider adjusting its rating criteria to better reflect the challenges faced during unprecedented events like the pandemic so that plans aren’t unfairly penalized.

• Beneficiaries: Medicare recipients should stay informed about their plan options and understand how star ratings affect their choices. Using the Medicare Plan Finder can help, and I’m always happy to be a resource.

Conclusion

The decline in Medicare Advantage star ratings for the third year in a row is a trend that warrants attention from all corners of the healthcare system. As the landscape evolves, staying informed and proactive will be key for Medicare consumers. Like I frequently say, you must be your own best advocate.

How to Get Out of a Medicare Advantage Plan

You were railroaded into getting a Medicare Advantage plan, probably by answering the phone and being misled by a pushy salesperson. Now, you realize your mistake and don’t want the plan.

How do you get out?

Luckily, there are options:

1. If you dropped a Medicare supplement to join an Advantage plan for the first time, the Medicare Advantage Trial Right Period gives you the opportunity to cancel the Advantage plan and return to the Medicare supplement you previously had, if the same insurance company you previously had still sells it. You may do this for the first 12 months of having the Advantage plan, and you don’t have to wait for the Annual Enrollment Period to do it. This is a federally guaranteed right and is available to you one time only. See page 23 of this document.

2. You can wait for the Annual Enrollment Period (AEP) (October 15-December 7) and switch back to Original Medicare and add a Prescription Drug Plan. You may also apply for a Medicare supplement, but you will be required to pass all the health questions and underwriting. Insurance companies have different underwriting guidelines, and some are more particular than others. If you are denied, you will be responsible for the charges not covered by Medicare.
   
   What happens if you leave your Advantage plan but don’t qualify for a Supplement? Well, in that case you need to review which Medicare Advantage plan suits you best, unless you’re willing to be exposed for the various charges and 20% Medicare doesn’t cover. I recommend starting by verifying that your doctors and medicines would be adequately covered! After that, you may get more picky about the extra benefits such as dental, vision, hearing, OTC benefits, gym membership, etc.

In the world of Medicare, what you may do and when you may do it all starts with having a valid Election Period*.

To that end, here are a couple more situations:

1. If you enrolled in a Medicare Advantage plan during AEP because it sounded awesome…and have now learned it doesn’t work for you…so you want to make a change, you have one opportunity to do so during the Medicare Advantage Open Enrollment Period (OEP). OEP runs from January 1st - March 31st. During this period, you can switch to a different Medicare Advantage plan or drop your current Advantage plan and return to Original Medicare and add Part D plan.

2. At any time of the year, you can switch from your current Medicare Advantage plan to an Advantage plan with a 5-star rating.

While I may be biased, I believe you would do yourself a favor to get the help of a seasoned broker. We’ve seen a lot and will help you avoid common pitfalls.

*a little light reading for you Medicare nerds: https://www.medicare.gov/basics/get-started-with-medicare/get-more-coverage/joining-a-plan/special-enrollment-periods

Changes Coming for Medicare Part D in 2025

There's quite a bit of buzz around the changes for 2025 Medicare Part D plans and Advantage plans. I've already had multiple inquiries, and the talk is that this year will be a big one for lots of switching.

Do you need to worry? I say no, but you do want to stay aware.

Important changes coming to Part D plans:

1. As part of the Inflation Reduction Act, Part D enrollees in 2025 will have a maximum out-of-pocket (MOOP) expense of $2,000 for the calender year, which should provide great relief to people with high prescrition drug costs. The $2,000 cap will be indexed to rise with inflation in the coming years.

2. Another provision in the Inflation Reduction Act, called the Medicare Prescription Payment Plan (MPPP), will allow for an alternate payment structure for enrolles to pay for their prescrition drugs. Referred to commonly as “smoothing,” the MPPP will allow people enrolled in a Part D plan to have the option of spreading their out-of-pocket Part D costs over the calendar year rather than paying directly at the pharmacy counter. When someone opts into the MPPP, their Part D provider will pay the beneficiary’s deductible, coinsurance, and/or copay, depending on their plan details directly to the pharmacy, then the provider will send a monthly bill to the beneficiary. It is important to note that the MPPP will not reduce or increase a person’s Part D cost-sharing obligations–it only spreads them out so that they are hopefully easier to pay.

The Open Enrollment Period for 2025 will run from October 15 to December 7. During this period, Medicare enrollees can:

• Join, drop, or switch to another Medicare Advantage Plan (or add or drop a Part D Precription Drug Plan).

• Switch from Original Medicare to a Medicare Advantage Plan or from a Medicare Advantage Plan to Original Medicare.

• Join, drop, or switch to another Medicare drug plan if you’re in Original Medicare.

Have questions? Please let me know. Medicare is confusing, so let me help you make decisions that are best for your needs.

Medicare Advantage vs Medicare Supplements (Medigap)

I’m a licensed Medicare insurance broker in Nashville and appointed with Aetna, Blue Cross, Cigna, Humana, United Health Care, and many more carriers. I advise people every day Medicare Advantage Plans or MediGap insurance. When I speak with people about their Medicare choices, we spend a lot of time discussing the differences between Medicare Advantage and Medicare Supplements.

Let’s try to clear up some of the confusion.

Traditional Medicare includes Parts A and B, but it doesn’t cover everything. Part A covers hospital stays and some stays in skilled nursing facilities, but the enrollee is responsible for deductibles and limits on the coverage. Part B, which is optional and requires a premium*, covers medical expenses such as doctors' visits, lab tests, outpatient procedures, etc.

To get more comprehensive coverage and reduce out-of-pocket spending for deductibles and limits on coverage, many people opt for Medicare Advantage plans or Medicare Supplements.

Medicare Advantage plans are an alternate way to get Original Medicare, while Medicare Supplements (or Medigap) work with your original Medicare coverage. Both are sold by private companies.

Let’s explore further:

Medicare Advantage (also known as Part C)

In Medicare Advantage, the government pays private insurance companies a fixed payment to provide coverage to enrollees. These plans offer the same Part A and Part B coverage as traditional Medicare (although coverage may be limited to providers is their HMO or PPO network), plus they typically offer additional benefits beyond what Part A and Part B offers. Most Advantage plans also include a Part D Prescription Drug Plan. You’re still in the Medicare program, but your benefits will be paid through your Medicare Advantage plan instead of through the federally administered program. You must be enrolled in both Medicare Parts A and B to be eligible for a Medicare Advantage plan.

Medicare Advantage plans may have physician networks, such as an HMO or PPO. Because you would be limited to network providers, Medicare Advantage plans often have lower premiums than Medigap plans - as low a $0 premium on some plans in some areas - except for your monthly Part B premiums.

Medicare Supplements (Medigap)

With MediGap your monthly premiums will be higher, but your out-of-pocket expenses will be limited and you won’t be restricted to a network of providers. You can choose a healthcare provider who participates in Medicare, and no referrals are necessary. If you enroll in a comprehensive plan like Plan F or Plan G, you will have very little out of pocket and no co-pays.

Medigap plans don’t include prescription drug benefits, so you should consider buying a separate stand-alone Medicare Part D Prescription Drug Plan to cover the costs of your prescription medications. Also, Medicare Supplement insurance plans generally don’t offer extra benefits like routine dental, vision, or hearing coverage beyond what’s already covered by Medicare.

Premiums for MediGap plans averages $100-$200 per month and vary depending on age and health condition.

If you have questions on Medicare Advantage Plans or MediGap insurance, please feel free to call me. I am located in Nashville and serve all of Tennessee. Thanks.

*The standard premium is $174.700/month for Part B in 2024.

Photo by richiedogg1981 is licensed under CC BY-NC-ND 2.0

How to Enroll in Medicare Online

"Happy and smiling elderly senior couple" by Stannah International is licensed under CC BY 2.0

Enrolling in Medicare can be done on the internet in an easy and convenient way. Below I have provided a link to the documentation checklist for online enrollment. Once you have gathered all the required documents for your application, the process should be fairly simple and require merely 10-20 minutes to complete.

Access the online Medicare application on the Social Security Administration (SSA) website by clicking on the button below. Once you are on the webpage, scroll down until you see this button, which will take you to the application. This will apply you for original Medicare (Parts A and B); if you want a supplement plan, prescription drug plan, or Advantage plan, continue reading.

Applying for Medigap, prescription drug plans (PDP), and Advantage plans

Medigap/Supplement Plans:

• The first step in purchasing a Medigap plan is finding the right one for you. You can explore options via this link, or you can contact me for additional help deciding on a plan!

• Once you’ve chosen a plan, consult the Medicare site for instructions and tips on purchasing it.

PDP and Advantage Plans:

• You can shop for both PDPs and Advantage plans on this webpage.

Already Enrolled?

If you have already enrolled in Medicare but would like to view or manage your benefits, this can be done through creating a SSA account in this link. An account will allow you to manage benefits, assess future benefits, check application status, and request a (replacement) Social Security card.

Still have questions? Contact me by email at carol@ballengerbrokerage.com or by phone at (615) 415-4424.

Important Steps When Making an Insurance Claim

Health insurance is a needed and welcome security blanket protecting you from high medical bills. Paying the ever-increasing premiums is not fun, but the protection that the insurance provides is critical when something actually does go wrong - an illness, an accident, or an unfortunate diagnosis.

Dealing with insurance is no fun.

Insurance companies are quick to collect your premiums, but they may be slow when it comes to paying out claims. Dealing with a large insurance carrier (and also health providers) means having to understand cryptic medical codes, confusing bills, plus long hold times if you attempt to talk to an actual person.

Can the process be made more simple?

You can’t control what goes on at the insurance end, but you can take some steps on your end that will make getting your benefits easier:

1. Know where your policy is and keep the contact information for your agent and the insurance company handy. Make sure your family knows where to find the information, too.

2. Keep your insurance card with you at all times.

3. Contact a lawyer and set up a trusted family member or friend with the durable power of attorney - just in case you need someone else to make a health decision for you.

4. Make sure that claims get filed in a timely manner. Claims have deadlines for filing. Plus, the sooner a claim filed, the sooner it’ll be paid.

5. File medical records in a safe spot so that you’ll have them when needed to file or dispute a claim.

6. If you get “no” for an answer, be persistent and don’t give up. Provide relevant documentation. Get your phyisican to provide a statement backing up your claim if necessary. Follow up emails with calls, and vice-versa.

7. Take really good notes, stating the date, time and name of the representative with whom you spoke. Don’t be afraid to ask “Is this call being recorded?” and also “Is this the correct number I should call about my claim?” If not, get the proper number and begin again with “Is this call being recorded?”

8. Contact a lawyer if necessary. Not just any lawyer, but one who knows how to litigate against health insurance companies.

HSA's and Medicare

Lately, I’ve had a lot of questions about how HSA’s work with Medicare, so I thought a blog post would be helpful.

What is an HSA?

An HSA is a Health Savings Account. You may contribute to an HSA on a pre-tax basis, but only when you have a qualified High Deductible Health Plan (HDHP.) With HDHP’s, out-of-pocket expenses such as deductibles, co-payments, and co-insurance can add up quickly, and HSA’s are designed to help with those costs. HSA’s can be set up through employers or independently, and are overseen by banks, credit unions, or other financial institutions.

What happens if I have an HSA when I turn 65?

First of all, you’re now eligible for Medicare - congratulations! With Medicare, many of your medical expenses will by covered by Medicare, but there are still out-of-pocket expenses to consider:

• With Original Medicare, you’ll have to pay a Part B premium (and possibly one for Part A), plus deductibles, etc. after you reach the limits that Medicare pays.

• Medicare Advantage plans may be “zero-premium”, but you’ll still have to pay for Part B premims, deductibles, and copayments.

• Medicare Supplements and Prescription Drug Plans are designed to cover deductibles and limit out-of-pocket expenses, but they do have premiums.

Based on all of this, it would be great to be able to keep your HSA and keep contributing to it to cover Medicare out-of-pocket expenses. Unfortunately, that’s not allowed! You must have a high-deductible health insurance plan in order to contribute pre-tax dollars to an HSA, so once you enroll in Medicare Part A or Part B, you may no longer contribute pre-tax dollars to your HSA.

What Happens to my HSA when I enroll in Medicare?

The money is still yours, and the good news is that you can use it to pay for Medicare expenses until the money is gone. However, you may NOT contribute money to the account anymore.

Should I delay enrollment in Medicare so so that I can keep contributing to my HSA?

Good question, and the answer depends on your work situation when turning 65:

• If you intend to keep working and your employer has 20 or more employees, Medicare insurance will pay after the company’s insurance. You may delay enrolling in Medicare with no penalty and continue contributing to your HSA.

• If you want to continue working and you’re working for an employer with less than 20 employees, Medicare insurance pays before the employer’s insurance. You may very well need Medicare in order to have primary insurance. Therefore, you should stop your HSA contributions when your turn 65 if you work for an employer with fewer than 20 employees.

• Finally, let’s say you delay your Medicare enrollment and keep your employer coverage, and your employer has more than 20 employees. When you enroll in Medicare, Part A is typically dated six months before Part B. That’s why conventional wisdom states that you should stop contributing six months before retiring.

I hope this helps, but Medicare is confusing. If you have questions, please contact me.

Tiering Exceptions - What Are They and How Do You Request One?

As you may know, Medicare Part D plans categorize prescription drugs in their formulary by tiers. To make sure we’re all on the same page, the “formulary” is a fancy word for the list of medicines covered by a plan. Usually, low-cost generic drugs are designated as Tier 1 and high-cost, branded rugs are placed in higher tiers that pass along greater costs to the enrollee. Often Tier 5 is the most expensive, but it varies by plan.

What If You Cannot Afford Your Copay?

If your Part D plan covers your prescription drug, but the drug is in a high tier and you feel that you cannot afford your copay, you can request a tiering exception as an avenue for lowering your cost-sharing amount.

How to Request a Tiering Exception

Follow these steps the request a tiering exception:

1. Talk to your pharmacist to find out exactly why your drug is so expensive. If your Part D provider has placed you drug on a higher tier than similar drugs that treat your condition, you can proceed with a tiering exception request. (However, please note that tiering exceptions are not provided for drugs in the specialty tier.)

2. Contact your Part D provider to find out their process for requesting a tier exception. Each insuror’s procedure will be a little different, so you will need to follow their instructions. As part of the Part D appeal process, you or your doctor must show that you need the drug prescribed and that lower tier drugs used for treatment of your condition are ineffective or dangerous for you.

Your Part D provider will approve or deny your request and notify you of their decision.

What if My Request is Denied?

If your request is denied, you should consider switching to a plan with lower cost-sharing during the next Annual Election Period, which runs from October 15th - December 7th.

Report Says Medicare Advantage Provides Better Outcomes than traditional Medicare

According to a recently released report from Havard University and and software company Inovalon, Medicare Advantage enrollees experience better quality outcomes than fee-for-service Medicare enrollees, including fewer readmissions, fewer preventable hospitalizations and lower rates of high-risk medication use.

Specifically, Advantage enrollees have over 70% fewer hospital readmissions and 25% fewer preventable inpatient admissions. Also, Advantage enrollees have lower rates of inappropriate medication use, and comparable rates of medication adherence.

The study did make adjusments for “enrollment differences across the two programs and for the pre-existing disadvantages faced by MA members in terms of baseline demographic, clinical, and social risk factors.”

Considering the fact that Medicare Advantage enrollment has grown from 17% of Medicare beneficiaries in 2000 to over 50% in 2023, the findings are encouraging.

Read the full report here.

Medicare Part B Premiums Due to Increase for 2024

The Centers for Medicare and Medicaid Services (CMS) announced that the standard monthly premium for Medicare Part B will increase in 2024, going from $164.90 this year to $174.70 next year, an increase of $9.80/month.

Additionally, the annual deductible for Part B will increase by $14, going from $226 to $240, and the standard premium for elective Part B coverage of immunosuppressive drugs will be set at $103. CMS attributes the increase primarily due to expected growth in health care spending.

Since a beneficiary's Part B monthly premium is been based on a person’s income, the income-related monthly adjustment amounts affect only about 8% of people with Medicare Part B. The 2024 Part B total premiums for high-income beneficiaries with full Part B coverage may be found at CMS.

Also, for anyone paying a Medicare Part A premium (inpatient hospitalization), the deductible will increase by $32 to $1,632. (About 99% of Medicare beneficiaries do not have a Part A premium, since they have the required minimum 40 quarters of Medicare-covered employment.)

Medicare - What to Do When You Turn 65

According to the U.S. Census Bureau, U.S. citizens aged 65 or older numbered 55.8 million in 2020, which is 16.8% of the population, or 1 out of 6 Americans. For comparison, in 1920 the proportion was less than 1 in 20.

Silver Tsunami

The rapid growth was largely attributed aging baby boomers, who were born between 1946 and 1964 and began turning 65 in 2011. We are at the peak time for boomers turning 65 now, with an American turning 65 every 8 seconds. By 2030, all baby boomers will be age 65 and over, and growth in this segment will begin to slow.

What to Do

If you’re one of the many Americans turning 65 soon, one of the perks is that you qualify for Medicare. Medicare is confusing, though, so this guide is provided to help you with the Medicare basics, so that you can hopefully know where to start and what to do.

If you have health coverage from your current active employment, do not assume that you must enroll in Medicare when you turn 65.

The Medicare Basics

The 4 parts to Medicare:

1. Part A - Inpatient care, including hospitals, skilled nursing facilities, and hospice, plus some home health care. Part A has no premium if you (or your current or former spouse) worked and paid Medicare taxes for at least 10 years.

2. Part B - Medical insurance, including outpatient and home health care from doctors and other health care providers, durable medical equipment, and some preventive services. Depending on income level, most people pay a monthly premium for Part B. In 2023, the standard monthly premium for Medicare Part B enrollees is be $164.90.

3. Part C - Medicare Advantage is run by private companies who contract with the federal government to provide Parts A and B (and usually D) and may also include coverage for vision, hearing, dental, and other benefits. You must have both Part A and Part B before enrolling in a Medicare Advantage plan.

4. Part D - Prescription Drug Coverage is also run by private companies and helps cover prescription drug costs. You must sign up for Part A or Part B before enrolling in Part D. There is a late-enrollment penalty if you don’t enroll in Part D when first eligible, unless you have other “creditable coverage.”

In addition to the above, there’s also Medicare Supplement Insurance (Medigap), which is extra insurance sold by private health insurance companies that helps pay your share of out-of-pocket costs in Original Medicare.

When to Sign Up

It's important to sign up as soon as possible to avoid penalties or gaps in coverage. (If you are age 65 or older and receive Social Security benefits, or if you’re already receiving Social Security due to a disability, you will be automatically enrolled in Part A.)

For most people, the best time to sign up for Part A and Part B is during the Initial Enrollment Period, which is the three mosnths before and after the day you turn 65. , but there are exceptions.

If you’re covered by an employer group health plan (through you or your spouse), when you turn 65, you can wait and enroll in Part B later during a Special Enrollment Period, and there will be no penalties if you sign up or add Part B during this time. The Special Enrollment Period will apply:

• If you or your spouse are working and still covered by the group health plan.

• Within 8 months of the day you or your spouse stop working, even if your group health plan continues for a time.

• Within 8 months of the group health plan ending while you or your spouse continue to work.

Your coverage begins the month after you sign up.

If you miss both the Initial Enrollment Period and the Special Enrollment Preiod, you can sign up during the General Enrollment Period, which lasts from January 1 and March 31 each year. Your coverage begins the month after you sign up. However, there is typically a life-long penalty if you sign up during this time.

Where to Sign Up

Enrollment for Parts A and B can be done through Social Security online at https://www.ssa.gov/medicare/sign-up. Be prepared to supply Social Security Number, information on where you were born, any current group health plan coverage information. You’ll be logging into your mySSA account to apply for Medicare, if you have one. If you don’t have a mySSA account, you’ll create one during the application process.

What Plan is Best for You?

This is where things get confusing for a first-timer (as if it’s all been easy so far). Once you’re enrolled in Part A and B, there are choices to be made: stick with Original Medicare, add a Part D plan or a Supplement, or go with a Medicare Advantage plan? After that there are more choices: which Part D or Supplement, or which Advantage plan?

If You Need Help

If you get confused, which is natural, consider calling an agent who offers many plans and can guide you to the best one for your needs. I’ve been helping customers for over ten years, I represent many carriers, and I don’t charge a fee for my services. You can contact me here.

State Medicare Agencies Set to Redetermine Enrollees' Eligibility Post-COVID

Back in the normal days before COVID, state Medicaid programs (including TennCare and Kentucky Medicaid) reviewed eligibity for all Medicaid recipients on an annual basis through a process called Medicaid redetermination.This is also known as Medicaid renewal or recertification.

However, during the pandemic, states were required to pause the redetermination process and maintain coverage for all individuals enrolled in the Medicaid. This means that some recipients have not had their eligibility reviewed since 2020 or earlier.

Beginning April 1, 2023, many states, including Tennessee and Kentucky, reinstated their review procedure.

How It Will Work and Why It Matters

Reviews are being done based on annual renewal date, and states are attempting to auto-renew every recipient's coverage using existing and allowable data sources. In these situations, enrollees should receive notice that they have been approved or denied coverage and the reasoning behind the decision. 

For recipients whose coverage cannot be done automatically, renewal packets will be sent to them requesting additional information. Contact may be made via postal mail, email, or other ways that are on file with the Medicaid agency. Insurance carriers who administer Medicaid programs may also attempt to contact impacted members to help them with the recertification process.

Social Security checks increased by a greater percentage than the Federal Poverty line did. This means that people who were on the qualifying borderline will probably lose their Medicaid benefits.

More Information

A guide to elegibility for TennCare can be found here.

Less Retirement Funds Needed for Medicare Advantage Compared to Medicare Supplement

I found an interesting headline regarding retirement savings needed for Medicare Advantage versus Medicare Supplement.

According to an analysis published on Feb. 9 by the Employee Benefits Research Institute, Medicare beneficiaries who enroll in a Medicare Advantage plan may need less retirement savings to cover their healthcare costs.

According to the EBRI’s analysis, for Medicare Advantage plans:

• Assuming median drug expenditures and an average usage of health care services, a man will need to have saved $56,000 and a woman will need to have saved $67,000 to have a 50% chance of meeting his health care spending requirements in retirement.

• To have a 90% chance of meeting health care spending requirements, a man will need $96,000 in savings and a woman will need $113,000.

• Couples will need $123,000 to have a 50% chance and $184,000 to have a 90% chance of covering their health care expenditures in retirement.

For a Medicare Supplements:

• A man need to have saved $96,000, and a woman will need to have saved $116,000 in order to have a 50% chance of having enough to cover premiums and median prescription drug expenditures.

• To have a 90% chance, a man will need to have $166,000 in savings, and a woman will need to have $197,000 in savings.

• Couples will need to have saved $212,000 to have a 50% chance and $318,000 to have a 90% chance.

As the article states, “there are other factors to consider when it comes to choosing a Medicare Advantage plan over traditional Medicare. Medicare Advantage plans often have limited networks or may require approval before certain medications or services are covered.”

Medicare Advantage and Prior Authorizations - Should You be Concerned?

Prior authorization is used by most Medicare Advantage plans to prevent waste and as a safeguard to prevent patients from receiving medically unnecessary treatment. In 2021, 90% of Medicare Advantage enrollees were in plans requiring authorization for procedures and lab tests. Original Medicare and Medicare Supplements do not have prior authorization requirements.

In previous blogs (here and here), we wrote about how Medicare Advantage plans have been accused of using their prior authorization provision to deny coverage for needed healthcare. A new report from the Kaiser Family Foundation (KFF) investigates the allegations.

The report was based on requests for medical care submitted to Medicare Advantage plan carriers in 2021. Out of 35 million prior authorization requests that were submitted, 2 million requests were either denied or partially denied, which equates to a 6% denial rate. Out of that group, only 212,000 (about 10%) were appealed. The result of those appeals was for 173,000 to be partially or fully approved. That means there was an 81.6% success rate on appeals.

Final tally: of the 35 million requests for prior authorization, the final rejection number for those who were denied both initially and on appeal was only 1.1%.

212,000 - 173,000 = 39,000 rejected twice
39,000 rejected twice/35,000,000 P.A. requests = 1.1%

The above numbers may be a little misleading because the sample size is small for the appeals, but the point is that it doesn’t hurt to appeal if you feel that you have a case. Delays or denials of prior authorizations can complicate and delay necessary medical procedures. The Centers for Medicare & Medicaid Services (CMS) is working to address concerns and streamline the process by (1) processing more requests electronically instead of by phone or fax, and (2) be requiring more transparency about the criteria used for making decisions.

I’ve recently heard (on two separate occassions) from my policyholders who were told that their insurance hadn’t approved their procedure. When they called their insurance company, they learned that the provider hadn’t yet submitted the claim for approval!

Bottom line: Medicare Advantage plans are popular because they provide great value, but until improvements to the system are implemented, it’s important for you and your doctor to work together to advocate for your needs. If you get denied on a prior authorization request, don’t be afraid to appeal.

Beginning April 1st, 2023, Vanderbilt Health Will No Longer Be in Network for Humana and WellCare Advantage Plans

Vanderbilt University Medical Center released an announcement this week stating that they are ending participation with Humana and Wellcare Medicare Advantage plans effective April 1.

After March 31st, patients in a Humana or WellCare Medicare Advantage plan will lose in-network access to the following Vanderbilt Health hospitals, clinics and affiliated partners (marked with an asterisk):

• Vanderbilt University Hospital

• Vanderbilt Health Clinics throughout the region

• Vanderbilt Psychiatric Hospital

• Vanderbilt Wilson County Hospital

• Vanderbilt Bedford Hospital

• Vanderbilt Tullahoma-Harton Hospital

• Vanderbilt Home Care Services

• Cool Springs Surgery Center*

• Spring Hill Surgery Center*

• Vanderbilt Imaging Services*

• Vanderbilt-Ingram Cancer Center at Tennova (Clarksville)*

• Vanderbilt-Ingram Cancer Center (radiation oncology) at Maury Regional Spring Hill*

In their statement, Vanderbilt blamed “higher costs for personnel, supplies, equipment, and medications needed to provide high quality care” as the reason for the change, stating “We rely on fair partnerships with insurance companies that help us cover these increased costs. We can't continue to partner with insurance plans that don't reimburse us adequately.”

More details here.

If the change affects you and you need to discuss or consider alternatives, please let me know.

Regarding Recent Criticism of Medicare Advantage

In May of 2022, we wrote a blog post addressing allegations that Medicare Advantage plans are bad for potential enrollees because the insurance companies administering the plans deny claims and authorizations for necessary care. Today, we address more recent claims that Medicare Advantage programs are flawed because insurance companies, many of which are for-profit, are more incentivized by profits than helping patients.

First, a short history lesson.

Medicare was first established in 1965 as a government-funded fee-for-service (FFS) program that covers - to some degree - costs for inpatient services (Part A) and outpatient services (Part B). The “some degree” part means that the patient may end up liable for various deductibles, co-insurance of 20%, and other expenses after Medicare limits are reached.

Without going into details, let’s just say that, with healthcare in America being what it is, out-of-pockets expenses under Medicare can add up quickly and be expensive. In order to address the gaps in coverage, Medicare Supplements and Prescription Drug Plans were developed by private insurance companies and allowed beneficiaries to pay a monthly premium to cover deductibles and copays and limit high out-of-pocket costs resulting from a catastrophic health event.

In 1997, Medicare Advantage plans were formalized, which is essentially Medicare contracted out to be administered by private insurance companies. In Advantage plans, the government pays the insurance company a monthly premium based on geographic area and the expected patient medical expenses, and then the insurer develops and markets various plans they hope will be attractive to consumers, many with attractive benfits such dental, hearing, and vision coverage, plus other perks such as transportation services and gym memberships, etc. The insurance companies, most of which are investor-owned and publicly-traded, make some degree of profit based on the difference between what the government pays them versus how much money they pay out in expenses and benefits for their insured clients.

In fact, newly released federal audits reveal indicate that the profits are actually very good, with Medicare Advantage plans typically earning insurance companies twice what they earn from their regular insurance products ($1,608/covered person for Advantage vs. $779).

The profit incentive of the insurance companies is the crux of recent criticism.

Some of the profits are legitimate, but in other cases the audits reveal widespread overcharges and other errors in payments to Medicare Advantage health plans for seniors. Out of 90 audits, 71 showied net overpayments, and 23 showed overpayments of over $1,000 per patient. Humana, one of the largest Medicare Advantage sponsors, had overpayments exceeding $1,000 on average in 10 of 11 audits.

The government pays the insurance companies based on formulas that use risk codes, with a higher risk code meaning the patient was sicker than average. If a patient is coded as having a condition such as diabetes or congestive heart failure, for example, the insurance company gets more money from the government. Most of the audited plans fell into what CMS calls this “high coding intensity group,” but the medical records supplied by the health plans didn’t always support the coded claims.

Does Medicare Advantage need more oversight?

Ted Doolittle, a former deputy director of CMS’ Center for Program Integrity, which oversees Medicare’s efforts to fight fraud and billing abuse, admitted that the agency has failed to hold Medicare Advantage plans accountable. “I think CMS fell down on the job on this,” he said.

In the wake of the audits, there have been calls for more oversight, with policymakers, journalists, and health industry analysts weighing in on how to rein in the overcharges the federal government. Some have even called for abolishment of Advantage plans.

The program no doubt has its flaws, and assessments are needed, but most experts agree Congress is gridlocked and has other priorities, which means no changes will come soon.

In the big picture, despite the government over-payments due to inflated risk coding, the fact remains that Advantages plans are gaining in popularity and are beneficial for many older adults. In spite of the overcharging and even the denied claims and over-use of authorizations, the alternatives to Medicare Advantage plans - original Medicare and Medicare Supplements and Prescription Drug Plan - have their own flaws.

Therefore, the best plan of action needs to be deliberate and objective. There’s no need to throw out the baby with the bathwater.

Join Carol for a Medicare Webinar on November 9, 2022, at 5:30 PM

Fall is the time for the Annual Election Period for Medicare, when those eligible can switch plans.

Feel free to join the webinar presented by Keystone Financial Resources, LLC, where Carol Ballenger, a Medicare Specialist, will discuss Medicare's Fall Open Enrollment before its deadline of December 7th.

An average 65-year-old couple retiring today will need an estimated $363,946 to cover their healthcare costs, according to one study, which could make it one of your largest retirement expenses. With the Medicare fall open enrollment period starting on October 15th, it’s time to assess your options or start thinking about your Medicare strategy for when you turn 65. Beyond this enrollment season, we could see changes to the Medicare program based on the outcome of this election.

Carol specializes in Medicare and individual plans through the Affordable Care Act. As market conditions have shifted, so has her approach. Listen in as she discusses which plan may fit best for you! 'Tis the season for Medicare options.

To register, click the link below.

The "Family Glitch" in Obamacare Has Been Fixed

This is great news! Families who didn’t previously qualify for ACA tax credits due to their spouse having family coverage available through their employer - even if it wasn’t affordable - can now get help with their premiums.

On Tuesday, October 11, the Treasury Department announced new rules for determining the premium tax credits. Until now, if a family was eligible to be on their spouse’s employer insurance, they were NOT eligible for ACA tax credits. While employers help pay for their employee’s health insurance, the help doesn’t usually extend to the rest of the family. This meant many people stayed on an expensive employer health plan or went without coverage. This new rule will result in more families qualifying for the tax breaks offered through the ACA.

"Now, the Treasury Department is finalizing that fix so that the law works the way Congress intended and the cost of coverage comes down for families all over the country. Starting next month, Americans can sign up to take advantage of this change," President Joe Biden said in a White House statement.

"About 1 million Americans will either gain coverage or see their insurance become more affordable as a result of the new rule," he added.

The open enrollment period for health insurance plans under the Affordable Care Act starts on Nov. 1, and the fix will bring down healthcare costs and expand access to affordable coverage to more Americans. Even though the number of uninsured Americans has dipped to a historic low of 8% this year, there is still an estimated 26 million people in the U.S. who don’t have health insurance.