Insurance Related Topics
When Choosing Health Care, Know What You’ll Owe
By Walecia Konrad : NY Times Article July 9, 2010
QUICK quiz: What’s the difference between co-pay and co-insurance?
If you’re like most people, you may think they are the same. But while it is true both terms refer to the portion of medical bills you pay out-of-pocket, these two types of cost-sharing are quite different.
A co-pay is a fixed amount that you pay each time you see a doctor or fill a prescription, usually around $10 or $20. Co-insurance is the percentage of the cost of doctor visits, hospitalizations and prescription drugs that you must pay under your insurance policy.
Let’s say your policy calls for 80/20 co-insurance. After you meet your deductible, you must pay 20 percent of your medical bills; the insurance company is responsible for the remaining 80 percent.
Many plans demand both co-pays and co-insurance. Co-insurance is especially common when it comes to hospital stays. Of all workers covered by an employer-sponsored group health plan, 51 percent must pay co-insurance for hospital admissions, according to the 2009 Kaiser Family Foundation survey of employer health benefits. The average payment is 18 percent of the total. And 53 percent of covered workers pay co-insurance for outpatient hospital visits, with an average charge of 19 percent.
Co-insurance is common in the individual insurance market. And as companies head into this fall’s open enrollment season, many are considering a switch from co-pay to co-insurance as a way to increase employee cost-sharing and contain rising health benefit expenses, said Tom Billet, director for health and group benefits at the consulting firm Towers Watson.
Because of the confusion involving co-pay and co-insurance, many patients don’t realize just how much it may cost them until they become seriously ill or are hospitalized, said Lynn Quincy, a senior policy analyst at Consumers Union. “Ten or 20 percent may not sound like much, but 20 percent of a $100,000 surgery is a lot of money,” she said.
Co-insurance payments can add up quickly for seriously ill patients. It’s not unusual, for example, for a cancer patient to need $40,000 worth of medicine in a given year.
“Co-insurance on that could be as much as $14,000, and that’s just for the drugs. That’s not even counting going to the doctor or the hospital yet,” said Stephen Finan, senior director of policy at the American Cancer Society’s Cancer Action Network.
High co-insurance and other out-of-pocket costs, including insurance premiums, can sometimes discourage patients from receiving the treatment they need. One in three individuals under age 65 diagnosed with cancer has delayed needed health care in the last 12 months, according to a Cancer Action Network poll.
Many group policies provide limits on annual out-of-pocket expenditures, including co-insurance, deductibles and co-pays. With these plans, once you pay, say, $5,000 or $6,000 for a single person in approved medical bills, your insurer will cover 100 percent of additional treatment. The new health care law will limit all cost-sharing, including co-insurance payments, beginning in 2014.
For now, many people rely on individual insurance plans that often have much higher annual maximums (if any) than group policies. And even in those plans with reasonable limits, annual out-of-pocket costs can add up to a devastating amount if you are seriously ill for an extended period of time.
That’s why it’s important to keep co-insurance in mind when you shop for a health care policy or choose from your employer’s options during open enrollment this fall. Here’s what to look for.
OUT-OF-POCKET LIMITS
As mentioned above, most policies have limits on how much patients can pay each year in medical bills. These limits vary widely depending on the type of policy, said Mr. Billet.
For a single person in a group plan, the limit could range from $2,500, on the low end, to as much as $6,000. For family coverage, maximums are usually double that.
Check carefully to determine what percentage of co-insurance you are expected to pay and what the annual limit will be. If you are considering a high-deductible health plan, don’t assume that you won’t also have to pay co-insurance.
“Even with the high cost of the deductible, most of these policies still expect you to have more skin in the game,” said Mr. Billet.
The good news is that high-deductible health care plans that qualify for the tax advantages of a health savings account are required to limit out-of-pocket expenses, including deductibles. This year the maximums, as determined by the I.R.S., are $5,800 for single coverage and $11,600 for family coverage.
Under some insurance policies, cost-sharing maximum limits are much higher for out-of-network charges.
“That’s why it is really important to know exactly what you are doing and what you are responsible for paying when you go out of network,” advised Mr. Billet. Too many people make the decision lightly, he added, because a friend or family member recommended a certain doctor or hospital, not realizing just how much of the bill they would have to pay.
OUT-OF-NETWORK CARE
If your health policy seems not to charge co-insurance, check the fine print.
Many network plans, like health maintenance organizations and preferred provider organizations, charge no or low co-pays for network providers, while assessing hefty co-insurance percentages for any out-of-network care you receive.
This is where co-insurance can get expensive.
“When you go out of network, you may say to yourself, ‘My insurance is covering 80 percent, that doesn’t sound so bad,’ ” said Mr. Billet. “But in the end your insurer may cover less than 80 percent of your actual bill.”
That’s because insurers often pay based on usual and customary charges for a specific treatment in your geographical area. So if a specialist charges you $300 for a visit but the insurer deems the usual and customary fee to be $250, your insurer will cover only $200 of the fee (80 percent of $250), not the $240 (80 percent of $300) you were expecting.
In most cases, your health care provider will often bill you directly for the $40 difference, a practice known as balance billing. Many states prohibit balance billing by in-network providers, but it is legal for out-of-network practitioners.
For one doctor’s visit, the extra charge may not seem like much, but if you become seriously ill and need out-of-network care, the combination of co-insurance and balance billing can amount to tens of thousands of dollars, said Mr. Finan.
Better data on reasonable fees is on the way. After the New York state attorney general, Andrew Cuomo, found that the methods used to determine usual and customary rates were flawed and conflict-laden, a new nonprofit company started compiling revised data with the aim of reflecting fairer prices. The new tools should be available in the first quarter of 2011.
QUIZ THE INSURER
Research the in-network options offered by your company’s plans. You may find you don’t need to go out of network after all. If you do, call your insurer to find out exactly what is covered before you receive treatment.
If you can make a persuasive case that you truly need specialized care that isn’t available in your network, your insurer may make an exception and cover the costs as if you were being treated by an in-network provider.
DRUG PRICES
With rising drug costs, it can be hard to estimate a co-insurance payment when reviewing plan options for the coming year. If you regularly take a prescription drug, check with the plan’s customer service number or Web site for up-to-date prices, so you’ll know what your share of the bill will be in advance.
Some insurers also offer information on lower-priced alternatives.
By Walecia Konrad : NY Times Article July 9, 2010
QUICK quiz: What’s the difference between co-pay and co-insurance?
If you’re like most people, you may think they are the same. But while it is true both terms refer to the portion of medical bills you pay out-of-pocket, these two types of cost-sharing are quite different.
A co-pay is a fixed amount that you pay each time you see a doctor or fill a prescription, usually around $10 or $20. Co-insurance is the percentage of the cost of doctor visits, hospitalizations and prescription drugs that you must pay under your insurance policy.
Let’s say your policy calls for 80/20 co-insurance. After you meet your deductible, you must pay 20 percent of your medical bills; the insurance company is responsible for the remaining 80 percent.
Many plans demand both co-pays and co-insurance. Co-insurance is especially common when it comes to hospital stays. Of all workers covered by an employer-sponsored group health plan, 51 percent must pay co-insurance for hospital admissions, according to the 2009 Kaiser Family Foundation survey of employer health benefits. The average payment is 18 percent of the total. And 53 percent of covered workers pay co-insurance for outpatient hospital visits, with an average charge of 19 percent.
Co-insurance is common in the individual insurance market. And as companies head into this fall’s open enrollment season, many are considering a switch from co-pay to co-insurance as a way to increase employee cost-sharing and contain rising health benefit expenses, said Tom Billet, director for health and group benefits at the consulting firm Towers Watson.
Because of the confusion involving co-pay and co-insurance, many patients don’t realize just how much it may cost them until they become seriously ill or are hospitalized, said Lynn Quincy, a senior policy analyst at Consumers Union. “Ten or 20 percent may not sound like much, but 20 percent of a $100,000 surgery is a lot of money,” she said.
Co-insurance payments can add up quickly for seriously ill patients. It’s not unusual, for example, for a cancer patient to need $40,000 worth of medicine in a given year.
“Co-insurance on that could be as much as $14,000, and that’s just for the drugs. That’s not even counting going to the doctor or the hospital yet,” said Stephen Finan, senior director of policy at the American Cancer Society’s Cancer Action Network.
High co-insurance and other out-of-pocket costs, including insurance premiums, can sometimes discourage patients from receiving the treatment they need. One in three individuals under age 65 diagnosed with cancer has delayed needed health care in the last 12 months, according to a Cancer Action Network poll.
Many group policies provide limits on annual out-of-pocket expenditures, including co-insurance, deductibles and co-pays. With these plans, once you pay, say, $5,000 or $6,000 for a single person in approved medical bills, your insurer will cover 100 percent of additional treatment. The new health care law will limit all cost-sharing, including co-insurance payments, beginning in 2014.
For now, many people rely on individual insurance plans that often have much higher annual maximums (if any) than group policies. And even in those plans with reasonable limits, annual out-of-pocket costs can add up to a devastating amount if you are seriously ill for an extended period of time.
That’s why it’s important to keep co-insurance in mind when you shop for a health care policy or choose from your employer’s options during open enrollment this fall. Here’s what to look for.
OUT-OF-POCKET LIMITS
As mentioned above, most policies have limits on how much patients can pay each year in medical bills. These limits vary widely depending on the type of policy, said Mr. Billet.
For a single person in a group plan, the limit could range from $2,500, on the low end, to as much as $6,000. For family coverage, maximums are usually double that.
Check carefully to determine what percentage of co-insurance you are expected to pay and what the annual limit will be. If you are considering a high-deductible health plan, don’t assume that you won’t also have to pay co-insurance.
“Even with the high cost of the deductible, most of these policies still expect you to have more skin in the game,” said Mr. Billet.
The good news is that high-deductible health care plans that qualify for the tax advantages of a health savings account are required to limit out-of-pocket expenses, including deductibles. This year the maximums, as determined by the I.R.S., are $5,800 for single coverage and $11,600 for family coverage.
Under some insurance policies, cost-sharing maximum limits are much higher for out-of-network charges.
“That’s why it is really important to know exactly what you are doing and what you are responsible for paying when you go out of network,” advised Mr. Billet. Too many people make the decision lightly, he added, because a friend or family member recommended a certain doctor or hospital, not realizing just how much of the bill they would have to pay.
OUT-OF-NETWORK CARE
If your health policy seems not to charge co-insurance, check the fine print.
Many network plans, like health maintenance organizations and preferred provider organizations, charge no or low co-pays for network providers, while assessing hefty co-insurance percentages for any out-of-network care you receive.
This is where co-insurance can get expensive.
“When you go out of network, you may say to yourself, ‘My insurance is covering 80 percent, that doesn’t sound so bad,’ ” said Mr. Billet. “But in the end your insurer may cover less than 80 percent of your actual bill.”
That’s because insurers often pay based on usual and customary charges for a specific treatment in your geographical area. So if a specialist charges you $300 for a visit but the insurer deems the usual and customary fee to be $250, your insurer will cover only $200 of the fee (80 percent of $250), not the $240 (80 percent of $300) you were expecting.
In most cases, your health care provider will often bill you directly for the $40 difference, a practice known as balance billing. Many states prohibit balance billing by in-network providers, but it is legal for out-of-network practitioners.
For one doctor’s visit, the extra charge may not seem like much, but if you become seriously ill and need out-of-network care, the combination of co-insurance and balance billing can amount to tens of thousands of dollars, said Mr. Finan.
Better data on reasonable fees is on the way. After the New York state attorney general, Andrew Cuomo, found that the methods used to determine usual and customary rates were flawed and conflict-laden, a new nonprofit company started compiling revised data with the aim of reflecting fairer prices. The new tools should be available in the first quarter of 2011.
QUIZ THE INSURER
Research the in-network options offered by your company’s plans. You may find you don’t need to go out of network after all. If you do, call your insurer to find out exactly what is covered before you receive treatment.
If you can make a persuasive case that you truly need specialized care that isn’t available in your network, your insurer may make an exception and cover the costs as if you were being treated by an in-network provider.
DRUG PRICES
With rising drug costs, it can be hard to estimate a co-insurance payment when reviewing plan options for the coming year. If you regularly take a prescription drug, check with the plan’s customer service number or Web site for up-to-date prices, so you’ll know what your share of the bill will be in advance.
Some insurers also offer information on lower-priced alternatives.
Shortcuts to avoiding a voice mail maze
By Alina Tugent : NY Times Article : October 13, 2007
I have not dreaded thin envelopes so much since applying to college.
They are showing up with alarming regularity lately: forms from our health insurance company inexplicably denying payment — or only partly paying — for something we believed was covered.
We read the codes and try to figure out why we are paid $30 for a $300 visit; they may as well have been written in Latin.
And when we try calling, all too often we end up in a voice mail maze.
There is little comfort in knowing we are not alone. Mention the issue of insurance reimbursement and almost everyone recounts a grim story about being underpaid or overcharged or simply denied.
“Insurance is really complicated and really expensive, so it’s never going to go smoothly,” said Gary Claxton, vice president of the Henry J. Kaiser Family Foundation.
I would like to place the blame squarely with the insurance companies, which use language so dense and provide such a confusing panoply of options that few people can burrow through it.
But perhaps I need to assume some responsibility. We were offered various health care plans when my husband changed jobs, like many people in that situation. We made as informed a decision as we could by reading (quickly) through the charts and making comparisons.
I never referred back to the information. So when we were consistently denied reimbursement for a series of treatments, I flew into a tizzy. My husband tried to reach a live person and failed; I finally succeeded, and a very nice person kindly told me we had not yet met our deductible for that particular treatment.
Oh.
I guess we are fairly typical. “Many disagreements between patients and their health plans occur because patients do not have a clear understanding about how their health plan works or which services it will cover,” stated a 2005 report by the Kaiser Family Foundation and the Consumers Union, “A Consumer Guide to Handling Disputes With Your Employer or Private Health Plan.”
Here are some common areas that you should understand to avoid confusion and extra out-of-pocket expenses, according to the guide and others familiar with the issues:
Also, be sure to ask when making any appointment if the doctor is currently in the network. Just because it says so in your plan’s book or online does not mean the doctor is still in the plan. Avoid a nasty surprise when the bill comes.
A good source of information is the Agency for Healthcare Research and Quality, at www.ahrq.gov. Click on “consumer health” for more information about what to look for when choosing a health care plan.
“As tedious and mind-numbing as reading brochures can be, there’s a lot of money riding on both what you and your employer are paying for health benefits,” said Alwyn Cassil, director for public affairs for the nonprofit Center for Studying Health System Change. “Even highly educated people who are on top of their finances don’t necessarily take the time to really understand how their health coverage works.”
But consumers can only do so much. Insurance companies are going to make mistakes, if only because of the sheer number of forms they process daily. I have had errors as basic as the wrong Social Security number (and therefore the bill sent to me was meant for a different patient).
Or, as happened to Karen Pollitz, a research professor at the Health Policy Institute at Georgetown University, an insurer can process a 12-year-old’s broken elbow as a workers’ compensation claim rather than as a sports accident — and then refuse to pay for it — simply because the doctor checked accident on the insurance form.
It took several appeals to sort that one out.
Pat Palmer is the founder of the Medical Billing Advocates of America, an organization that trains advocates for consumers and companies to catch and fight errors in medical bills.
The advocates charge either a percentage of what the consumer is saved — 35 to 40 percent, Ms. Palmer said — or an hourly rate, which would average $75 to $150 an hour.
“Of the hospital bills we see, 8 out of 10 have errors,” she said. She said she has trained 65 advocates, including a few lawyers and doctors.
“We want to make sure the provider is billing right and the insurance company is paying right,” Ms. Palmer said. In the 11 years she has done this kind of advocacy, she said: “I believe it is getting worse. I see much more overcharging by providers and underpaying by insurers.”
Ms. Palmer said the advocates are able to correct mistakes in about 85 percent of the bills they work on.
While you can refer to your health plan explanation of benefits for many issues, some are simply not clear-cut. For example, take the issue of a pre-existing condition. While the federal government has tried to make it more difficult to deny people benefits based on pre-existing medical conditions, it is still a fraught issue, particularly for those covered by individual, rather than group, health care plans.
Ms. Pollitz, said, for example, that as a cancer survivor “in many states, I might be issued a policy that states that any future cancers will not be covered.”
“Medical necessity” — whether it be a procedure or a medication — is another unclear area.
“What one insurance says is a medical necessity, another may not,” Ms. Pollitz said. “It’s very vague.”
The first thing to do when you see a bill is denied is to take a deep breath, she advised.
Too often people panic and either throw the bill in the bottom of a drawer or pay it off right away out of fear that a collection agency will come knocking on their door.
Do not do either. Make a call. Press zero until you get a live person. Ask questions until you really understand the answer. If it is unclear, ask for it in writing.
You can appeal the process, but the first step is an internal appeal within the insurance company, and that will probably end with a denial, Ms. Pollitz said. Be persistent. Keep good records of all the information you gather and who told you what.
If it turns out in the end that you do owe a huge amount, do not ignore it. Call the hospital or provider and tell the administrator what happened. You can ask if the rate can be reduced to what the insurance would be charged, which is lower than what a person without insurance has to pay. Or ask if you can pay it off in installments. Or if you are in dire straits, ask that the fee be waived.
“Let them know you are a real person,” Ms. Pollitz said, “a nice person, just in a terribly unfortunate place.”
Hmmm. I wonder if that would work for the cable bill.
The Coverage Gap
Avoiding Medicare’s Big Hole
By Stephanie Saul : NY Times Article : November 24, 2007
The Medicare doughnut hole is the federal provision that older Americans love to hate.
And that is not expected to change next year, when the doughnut hole — the nickname for a big financial gap in each person’s Medicare prescription drug coverage — gets slightly larger. If the past is a guide, many people will struggle to secure a full year’s supply of the drugs they need.
But despite the arrangement’s unpopularity with older consumers, some experts see a positive public policy trend when they peer into the doughnut hole. Because it potentially forces a Medicare enrollee to pay more than $3,000 from his or her own pocket during the gap period, the hole is helping curb growth in the nation’s drug spending by pushing people toward low-cost generic drugs.
And because the cheaper generics generally work just as well, patients are incorporating them into their permanent drug regimen, according to Dr. Tim Anderson, a pharmaceuticals analyst for Sanford C. Bernstein & Company, who is also a physician.
“Clearly, once you’re on the therapy, if you’re tolerating it and you’re saving money, there’s no reason to switch back,” he said.
It may not be a message that brand-name drug makers want to hear. But with the Medicare Part D drug program enrollment period now under way, through Dec. 31, analysts predict millions of older Americans will study generic drug prices and options as they select an insurance plan. Some economists say that many Medicare enrollees, through carefully planned use of generics, can avoid reaching the doughnut hole altogether.
When the Medicare Part D program began in January 2006, makers of name-brand drugs considered it a welcome stimulus to overall use of prescription drugs. The industry knew the doughnut hole might steer some patients toward generic drugs, but not necessarily so soon.
“I don’t think they anticipated how quickly this kind of event could shift patients toward utilizing generics,” said Peter C. Demogenes, a senior director of the research firm Wolters Kluwer.
Congress carved the doughnut hole into the Medicare prescription drug plan as a way to limit the federal outlay. But architects of the plan made sure some costs were covered for all Medicare beneficiaries upfront, while also seeing to it that the sickest would get help with catastrophic drug costs on the far side of the doughnut hole. Once a beneficiary has made it through the coverage gap in any given year — in 2008, after the total cost of drugs has reached $5,726 — prescriptions are generally covered at 95 percent.
About 4.2 million people reached the gap last year, according to a Wolters Kluwer study, and many of them switched to generics as a way to keep their out-of-pocket costs low. Others started using generic drugs even before they reached the doughnut hole to avoid the higher co-payments their policies charged for brand-name drugs.
In 2006, an estimated 59.6 percent of the Part D prescriptions were filled by generic drugs. By the first quarter of 2007, the most recent period for which data are available, the generic rate in Medicare had edged higher, to 61.5 percent, according to Medicare figures.
Billy Tauzin, the president of Pharmaceutical Research and Manufacturers of America, the trade association for brand-name drug companies, said it was clear that the Medicare program, including the doughnut hole, was helping drive the use of generic drugs. And the popularity of generic drugs is cutting into the profit margins of branded drug companies, he added.
Mr. Tauzin, a former congressman, said his group had made several proposals to Congress for shrinking the doughnut hole. Among the suggestions, he said, was to count the free drugs that companies sometimes provide to lower-income Medicare beneficiaries as part of the patients’ running total of drug costs. Doing so would make their catastrophic coverage kick in sooner.
“We can help them, but it doesn’t count toward getting them out of the doughnut hole,” Mr. Tauzin said. “That’s not fair.”
Kerry N. Weems, the acting Medicare administrator, said the doughnut hole was not the only reason that generics were on the rise. The Part D program over all has made consumers more price-conscious, he said, noting that Medicare’s Web site lists the prices of pharmaceuticals dispensed at each drugstore participating in a particular Medicare plan. “It will show you month by month for the entire year what your yearly expenditures are,” he said.
In 2008, the gap in the standard Medicare drug benefit begins when a patient’s total drug costs have reached $2,510, including the portion paid by Medicare and the patient’s own out-of-pocket deductibles and co-payments. The beneficiary must then absorb 100 percent of costs out of pocket for the next $3,216, until total drug costs have reached $5,726. Only then does the catastrophic coverage kick in.
While federal assistance is available to help the poorest patients with premiums, deductibles and co-pays under the Medicare program, those who fall just above the poverty guidelines and cannot get extra help sometimes simply stop taking their medications once they reach the doughnut hole or rack up big credit card debt to pay for them.
Debbie Mullaney, the pharmaceutical coordinator for a community health clinic in Cumberland, Md., said her clinic looked for ways to help such patients get their medications.
When people reach the doughnut hole, she said, they must continue to pay their monthly Part D insurance premiums — typically $30 or so — even as they also pay for their medicines out of pocket. During that period, the clinic tries to help patients switch to generics or supplies them with free samples from brand-name drug companies.
“We always try steps to get them on something they can afford and get them some accessibility,” Ms. Mullaney said.
A recent AARP survey found that among Medicare beneficiaries who reached the doughnut hole, 15 percent decided not to fill a prescription.
Dr. James D. King, a family physician in Selmer, Tenn., estimates that 50 to 70 percent of his Medicare patients hit the doughnut hole — at which point they switch to generics, ask for free samples or simply stop taking their medicine.
In some cases, Dr. King said, patients elect to switch to another type of drug altogether to reduce costs. For example, patients taking Benicar, a blood-pressure treatment that is not available as a generic, may switch to lisinopril, a generic that also lowers blood pressure but sometimes causes the side effect of coughing.
Another example he cited is that patients taking Plavix, a brand-name blood thinner, might simply use aspirin, a blood thinner that is not as effective but is much cheaper. “It’s not unusual to have a patient who is taking anywhere from 7 to 13 medications every day,” said Dr. King, who is president of the American Academy of Family Physicians. “We start to look at which ones you absolutely need to be on and which ones you don’t.”
Lillian Russell, 86, a widow from Hummelstown, Pa., takes eight prescription drugs. Even though five of them are generic, she reached the doughnut hole this year in July. Her prescription drug bill in September, which she paid entirely on her own, was $727.91. Mrs. Russell believes she will remain in the gap for the rest of the year.
“Unfortunately, two of the drugs I have been on are fairly new ones and are very expensive and there is no generic for them,” Mrs. Russell said. Though generics are not always an option, some economists say that with proper planning, some patients who entered the doughnut hole this year could have avoided it.
A study by Express Scripts, the pharmaceutical benefit manager, said that an analysis of 220,000 patients found that 23 percent of those who fell into the doughnut hole in 2006 could have skirted it by using generics to cut drug costs. Such planning, though, requires that patients talk to doctors about their finances. Many people are embarrassed to bring up money when discussing prescription drugs with their doctors, and many physicians never broach the subject with patients.
A study of more than 1,100 patients published by The Journal of the American Geriatrics Society found that four of five wanted doctors to discuss medication costs, but fewer than one in five doctors did. One in three patients in the study who cut back on their drugs because of cost said they had never asked their doctor for help in reducing expenses.
Dr. Ted D. Epperly, a physician in Boise, Idaho, and president-elect of the American Academy of Family Physicians, said that patients were sometimes embarrassed to discuss their finances.
“Usually I’m a little blind to it if they’re in the doughnut hole,” Dr. Epperly said, “mainly because they’re proud people, and they feel their obligation isn’t to share that with the doctor.”
The Coverage Gap
There Are Alternatives: Insuring to Bridge the Gap or Opting Out
By Stephanie Saul : NY Times Article : November 24, 2007
One way for Medicare Part D enrollees to deal with the “doughnut hole” is to insure themselves against it. Another way is to simply not get involved with Part D in the first place.
Nearly one-third of Medicare prescription drug insurance plans now offer to pay for drugs through the doughnut-hole coverage gap that Congress designed into the program. That is up from only 15 percent of plans that offered gap coverage in 2006, according to the Kaiser Family Foundation.
But the doughnut-hole gap insurance typically covers only generic drugs. That complicates the calculus for patients trying to determine whether to pay the higher premiums for such policies, which typically cost about twice as much as the $28 average premium for plans without gap protection.
For those able to rely solely on generic drugs, the cheapest approach in the short run might be to forgo Part D insurance altogether. Instead, they could simply shop at discount retailers like Wal-Mart, Costco and Target whose pharmacies offer low-cost generics for as little as $4 for a monthly prescription.
To determine what their coverage cost will be under Medicare, and help choose the approach that is best for them, consumers can visit Medicare’s Web site. There, beneficiaries can enter their specific drugs, as well as the pharmacy they want to use, to see their options. The software calculates the best plan for a particular beneficiary among the 50 or so that are typically available in each state. This year’s enrollment period continues through Dec. 31.
The cheapest plan is not necessarily the best. Among things to consider are whether the plan carries a deductible; what it charges for co-payments on individual drugs; whether it covers drugs in the doughnut hole, and whether there are restrictions on some drugs.
Some plans, for example, limit the quantities of drugs a patient may get each month. Others require prior authorization for some drugs — meaning that the doctor has to make a special call to the insurer.
Some plans have recently added extra levels of co-pays or moved drugs from one co-pay tier to another, meaning beneficiaries pay more than they expected when they pick up their drugs.
The Medicare Web site is relatively easy to use, but some people may still need help.
“Many seniors don’t use the Internet and don’t use computers,” said Elisabeth Clayton, a client services associate for the Medicare Rights Center, a nonprofit group based in New York that offers help to Medicare beneficiaries nationwide.
By phone, Ms. Clayton recently assisted a Medicare beneficiary from Oklahoma who was searching for a plan. The woman takes 10 drugs, including 7 generics.
By entering the woman’s list of drugs and her pharmacy in the Medicare Web site, Ms. Clayton determined that the best option for her would be an AARP plan with a relatively high premium — $64.10 a month — but no deductible. The plan also offered gap coverage and few restrictions.
The second-best plan, offered by First Health, had a far lower premium: $16.40 a month. But it would have ended up costing $250 more by the end of the year — and a full $1,100 more compared with the mail-order option on the AARP plan, according to the Medicare Web site.
Similar assistance is available through a program called Area Agencies on Aging in many states. In Hot Springs, Ark., for example, the West Central Arkansas Area Agency on Aging has been offering appointments to assist Medicare beneficiaries in selecting a plan, according to Dody Roberts, director of case management.
“All plans are not going to cover all prescriptions,” Ms. Roberts said.
By Alina Tugent : NY Times Article : October 13, 2007
I have not dreaded thin envelopes so much since applying to college.
They are showing up with alarming regularity lately: forms from our health insurance company inexplicably denying payment — or only partly paying — for something we believed was covered.
We read the codes and try to figure out why we are paid $30 for a $300 visit; they may as well have been written in Latin.
And when we try calling, all too often we end up in a voice mail maze.
There is little comfort in knowing we are not alone. Mention the issue of insurance reimbursement and almost everyone recounts a grim story about being underpaid or overcharged or simply denied.
“Insurance is really complicated and really expensive, so it’s never going to go smoothly,” said Gary Claxton, vice president of the Henry J. Kaiser Family Foundation.
I would like to place the blame squarely with the insurance companies, which use language so dense and provide such a confusing panoply of options that few people can burrow through it.
But perhaps I need to assume some responsibility. We were offered various health care plans when my husband changed jobs, like many people in that situation. We made as informed a decision as we could by reading (quickly) through the charts and making comparisons.
I never referred back to the information. So when we were consistently denied reimbursement for a series of treatments, I flew into a tizzy. My husband tried to reach a live person and failed; I finally succeeded, and a very nice person kindly told me we had not yet met our deductible for that particular treatment.
Oh.
I guess we are fairly typical. “Many disagreements between patients and their health plans occur because patients do not have a clear understanding about how their health plan works or which services it will cover,” stated a 2005 report by the Kaiser Family Foundation and the Consumers Union, “A Consumer Guide to Handling Disputes With Your Employer or Private Health Plan.”
Here are some common areas that you should understand to avoid confusion and extra out-of-pocket expenses, according to the guide and others familiar with the issues:
- What your deductible is, in general, and if there are different deductibles for different parts of your health care, like separate ones for mental health coverage.
- What your co-payment is for various services.
- If your insurance company requires referrals from your primary-care physicians for specialists like gynecologists or certain procedures like lab work.
- If your insurance requires preauthorization for elective surgeries or other services. Otherwise your benefits can be denied or reduced.
- If your insurance plan limits the number of visits to certain specialists.
- What is the policy on using a doctor out of your insurance network? Sometimes people choose to go to one outside the network because they like a certain doctor, but sometimes they have no choice or are unaware of the consequences.
Also, be sure to ask when making any appointment if the doctor is currently in the network. Just because it says so in your plan’s book or online does not mean the doctor is still in the plan. Avoid a nasty surprise when the bill comes.
A good source of information is the Agency for Healthcare Research and Quality, at www.ahrq.gov. Click on “consumer health” for more information about what to look for when choosing a health care plan.
“As tedious and mind-numbing as reading brochures can be, there’s a lot of money riding on both what you and your employer are paying for health benefits,” said Alwyn Cassil, director for public affairs for the nonprofit Center for Studying Health System Change. “Even highly educated people who are on top of their finances don’t necessarily take the time to really understand how their health coverage works.”
But consumers can only do so much. Insurance companies are going to make mistakes, if only because of the sheer number of forms they process daily. I have had errors as basic as the wrong Social Security number (and therefore the bill sent to me was meant for a different patient).
Or, as happened to Karen Pollitz, a research professor at the Health Policy Institute at Georgetown University, an insurer can process a 12-year-old’s broken elbow as a workers’ compensation claim rather than as a sports accident — and then refuse to pay for it — simply because the doctor checked accident on the insurance form.
It took several appeals to sort that one out.
Pat Palmer is the founder of the Medical Billing Advocates of America, an organization that trains advocates for consumers and companies to catch and fight errors in medical bills.
The advocates charge either a percentage of what the consumer is saved — 35 to 40 percent, Ms. Palmer said — or an hourly rate, which would average $75 to $150 an hour.
“Of the hospital bills we see, 8 out of 10 have errors,” she said. She said she has trained 65 advocates, including a few lawyers and doctors.
“We want to make sure the provider is billing right and the insurance company is paying right,” Ms. Palmer said. In the 11 years she has done this kind of advocacy, she said: “I believe it is getting worse. I see much more overcharging by providers and underpaying by insurers.”
Ms. Palmer said the advocates are able to correct mistakes in about 85 percent of the bills they work on.
While you can refer to your health plan explanation of benefits for many issues, some are simply not clear-cut. For example, take the issue of a pre-existing condition. While the federal government has tried to make it more difficult to deny people benefits based on pre-existing medical conditions, it is still a fraught issue, particularly for those covered by individual, rather than group, health care plans.
Ms. Pollitz, said, for example, that as a cancer survivor “in many states, I might be issued a policy that states that any future cancers will not be covered.”
“Medical necessity” — whether it be a procedure or a medication — is another unclear area.
“What one insurance says is a medical necessity, another may not,” Ms. Pollitz said. “It’s very vague.”
The first thing to do when you see a bill is denied is to take a deep breath, she advised.
Too often people panic and either throw the bill in the bottom of a drawer or pay it off right away out of fear that a collection agency will come knocking on their door.
Do not do either. Make a call. Press zero until you get a live person. Ask questions until you really understand the answer. If it is unclear, ask for it in writing.
You can appeal the process, but the first step is an internal appeal within the insurance company, and that will probably end with a denial, Ms. Pollitz said. Be persistent. Keep good records of all the information you gather and who told you what.
If it turns out in the end that you do owe a huge amount, do not ignore it. Call the hospital or provider and tell the administrator what happened. You can ask if the rate can be reduced to what the insurance would be charged, which is lower than what a person without insurance has to pay. Or ask if you can pay it off in installments. Or if you are in dire straits, ask that the fee be waived.
“Let them know you are a real person,” Ms. Pollitz said, “a nice person, just in a terribly unfortunate place.”
Hmmm. I wonder if that would work for the cable bill.
The Coverage Gap
Avoiding Medicare’s Big Hole
By Stephanie Saul : NY Times Article : November 24, 2007
The Medicare doughnut hole is the federal provision that older Americans love to hate.
And that is not expected to change next year, when the doughnut hole — the nickname for a big financial gap in each person’s Medicare prescription drug coverage — gets slightly larger. If the past is a guide, many people will struggle to secure a full year’s supply of the drugs they need.
But despite the arrangement’s unpopularity with older consumers, some experts see a positive public policy trend when they peer into the doughnut hole. Because it potentially forces a Medicare enrollee to pay more than $3,000 from his or her own pocket during the gap period, the hole is helping curb growth in the nation’s drug spending by pushing people toward low-cost generic drugs.
And because the cheaper generics generally work just as well, patients are incorporating them into their permanent drug regimen, according to Dr. Tim Anderson, a pharmaceuticals analyst for Sanford C. Bernstein & Company, who is also a physician.
“Clearly, once you’re on the therapy, if you’re tolerating it and you’re saving money, there’s no reason to switch back,” he said.
It may not be a message that brand-name drug makers want to hear. But with the Medicare Part D drug program enrollment period now under way, through Dec. 31, analysts predict millions of older Americans will study generic drug prices and options as they select an insurance plan. Some economists say that many Medicare enrollees, through carefully planned use of generics, can avoid reaching the doughnut hole altogether.
When the Medicare Part D program began in January 2006, makers of name-brand drugs considered it a welcome stimulus to overall use of prescription drugs. The industry knew the doughnut hole might steer some patients toward generic drugs, but not necessarily so soon.
“I don’t think they anticipated how quickly this kind of event could shift patients toward utilizing generics,” said Peter C. Demogenes, a senior director of the research firm Wolters Kluwer.
Congress carved the doughnut hole into the Medicare prescription drug plan as a way to limit the federal outlay. But architects of the plan made sure some costs were covered for all Medicare beneficiaries upfront, while also seeing to it that the sickest would get help with catastrophic drug costs on the far side of the doughnut hole. Once a beneficiary has made it through the coverage gap in any given year — in 2008, after the total cost of drugs has reached $5,726 — prescriptions are generally covered at 95 percent.
About 4.2 million people reached the gap last year, according to a Wolters Kluwer study, and many of them switched to generics as a way to keep their out-of-pocket costs low. Others started using generic drugs even before they reached the doughnut hole to avoid the higher co-payments their policies charged for brand-name drugs.
In 2006, an estimated 59.6 percent of the Part D prescriptions were filled by generic drugs. By the first quarter of 2007, the most recent period for which data are available, the generic rate in Medicare had edged higher, to 61.5 percent, according to Medicare figures.
Billy Tauzin, the president of Pharmaceutical Research and Manufacturers of America, the trade association for brand-name drug companies, said it was clear that the Medicare program, including the doughnut hole, was helping drive the use of generic drugs. And the popularity of generic drugs is cutting into the profit margins of branded drug companies, he added.
Mr. Tauzin, a former congressman, said his group had made several proposals to Congress for shrinking the doughnut hole. Among the suggestions, he said, was to count the free drugs that companies sometimes provide to lower-income Medicare beneficiaries as part of the patients’ running total of drug costs. Doing so would make their catastrophic coverage kick in sooner.
“We can help them, but it doesn’t count toward getting them out of the doughnut hole,” Mr. Tauzin said. “That’s not fair.”
Kerry N. Weems, the acting Medicare administrator, said the doughnut hole was not the only reason that generics were on the rise. The Part D program over all has made consumers more price-conscious, he said, noting that Medicare’s Web site lists the prices of pharmaceuticals dispensed at each drugstore participating in a particular Medicare plan. “It will show you month by month for the entire year what your yearly expenditures are,” he said.
In 2008, the gap in the standard Medicare drug benefit begins when a patient’s total drug costs have reached $2,510, including the portion paid by Medicare and the patient’s own out-of-pocket deductibles and co-payments. The beneficiary must then absorb 100 percent of costs out of pocket for the next $3,216, until total drug costs have reached $5,726. Only then does the catastrophic coverage kick in.
While federal assistance is available to help the poorest patients with premiums, deductibles and co-pays under the Medicare program, those who fall just above the poverty guidelines and cannot get extra help sometimes simply stop taking their medications once they reach the doughnut hole or rack up big credit card debt to pay for them.
Debbie Mullaney, the pharmaceutical coordinator for a community health clinic in Cumberland, Md., said her clinic looked for ways to help such patients get their medications.
When people reach the doughnut hole, she said, they must continue to pay their monthly Part D insurance premiums — typically $30 or so — even as they also pay for their medicines out of pocket. During that period, the clinic tries to help patients switch to generics or supplies them with free samples from brand-name drug companies.
“We always try steps to get them on something they can afford and get them some accessibility,” Ms. Mullaney said.
A recent AARP survey found that among Medicare beneficiaries who reached the doughnut hole, 15 percent decided not to fill a prescription.
Dr. James D. King, a family physician in Selmer, Tenn., estimates that 50 to 70 percent of his Medicare patients hit the doughnut hole — at which point they switch to generics, ask for free samples or simply stop taking their medicine.
In some cases, Dr. King said, patients elect to switch to another type of drug altogether to reduce costs. For example, patients taking Benicar, a blood-pressure treatment that is not available as a generic, may switch to lisinopril, a generic that also lowers blood pressure but sometimes causes the side effect of coughing.
Another example he cited is that patients taking Plavix, a brand-name blood thinner, might simply use aspirin, a blood thinner that is not as effective but is much cheaper. “It’s not unusual to have a patient who is taking anywhere from 7 to 13 medications every day,” said Dr. King, who is president of the American Academy of Family Physicians. “We start to look at which ones you absolutely need to be on and which ones you don’t.”
Lillian Russell, 86, a widow from Hummelstown, Pa., takes eight prescription drugs. Even though five of them are generic, she reached the doughnut hole this year in July. Her prescription drug bill in September, which she paid entirely on her own, was $727.91. Mrs. Russell believes she will remain in the gap for the rest of the year.
“Unfortunately, two of the drugs I have been on are fairly new ones and are very expensive and there is no generic for them,” Mrs. Russell said. Though generics are not always an option, some economists say that with proper planning, some patients who entered the doughnut hole this year could have avoided it.
A study by Express Scripts, the pharmaceutical benefit manager, said that an analysis of 220,000 patients found that 23 percent of those who fell into the doughnut hole in 2006 could have skirted it by using generics to cut drug costs. Such planning, though, requires that patients talk to doctors about their finances. Many people are embarrassed to bring up money when discussing prescription drugs with their doctors, and many physicians never broach the subject with patients.
A study of more than 1,100 patients published by The Journal of the American Geriatrics Society found that four of five wanted doctors to discuss medication costs, but fewer than one in five doctors did. One in three patients in the study who cut back on their drugs because of cost said they had never asked their doctor for help in reducing expenses.
Dr. Ted D. Epperly, a physician in Boise, Idaho, and president-elect of the American Academy of Family Physicians, said that patients were sometimes embarrassed to discuss their finances.
“Usually I’m a little blind to it if they’re in the doughnut hole,” Dr. Epperly said, “mainly because they’re proud people, and they feel their obligation isn’t to share that with the doctor.”
The Coverage Gap
There Are Alternatives: Insuring to Bridge the Gap or Opting Out
By Stephanie Saul : NY Times Article : November 24, 2007
One way for Medicare Part D enrollees to deal with the “doughnut hole” is to insure themselves against it. Another way is to simply not get involved with Part D in the first place.
Nearly one-third of Medicare prescription drug insurance plans now offer to pay for drugs through the doughnut-hole coverage gap that Congress designed into the program. That is up from only 15 percent of plans that offered gap coverage in 2006, according to the Kaiser Family Foundation.
But the doughnut-hole gap insurance typically covers only generic drugs. That complicates the calculus for patients trying to determine whether to pay the higher premiums for such policies, which typically cost about twice as much as the $28 average premium for plans without gap protection.
For those able to rely solely on generic drugs, the cheapest approach in the short run might be to forgo Part D insurance altogether. Instead, they could simply shop at discount retailers like Wal-Mart, Costco and Target whose pharmacies offer low-cost generics for as little as $4 for a monthly prescription.
To determine what their coverage cost will be under Medicare, and help choose the approach that is best for them, consumers can visit Medicare’s Web site. There, beneficiaries can enter their specific drugs, as well as the pharmacy they want to use, to see their options. The software calculates the best plan for a particular beneficiary among the 50 or so that are typically available in each state. This year’s enrollment period continues through Dec. 31.
The cheapest plan is not necessarily the best. Among things to consider are whether the plan carries a deductible; what it charges for co-payments on individual drugs; whether it covers drugs in the doughnut hole, and whether there are restrictions on some drugs.
Some plans, for example, limit the quantities of drugs a patient may get each month. Others require prior authorization for some drugs — meaning that the doctor has to make a special call to the insurer.
Some plans have recently added extra levels of co-pays or moved drugs from one co-pay tier to another, meaning beneficiaries pay more than they expected when they pick up their drugs.
The Medicare Web site is relatively easy to use, but some people may still need help.
“Many seniors don’t use the Internet and don’t use computers,” said Elisabeth Clayton, a client services associate for the Medicare Rights Center, a nonprofit group based in New York that offers help to Medicare beneficiaries nationwide.
By phone, Ms. Clayton recently assisted a Medicare beneficiary from Oklahoma who was searching for a plan. The woman takes 10 drugs, including 7 generics.
By entering the woman’s list of drugs and her pharmacy in the Medicare Web site, Ms. Clayton determined that the best option for her would be an AARP plan with a relatively high premium — $64.10 a month — but no deductible. The plan also offered gap coverage and few restrictions.
The second-best plan, offered by First Health, had a far lower premium: $16.40 a month. But it would have ended up costing $250 more by the end of the year — and a full $1,100 more compared with the mail-order option on the AARP plan, according to the Medicare Web site.
Similar assistance is available through a program called Area Agencies on Aging in many states. In Hot Springs, Ark., for example, the West Central Arkansas Area Agency on Aging has been offering appointments to assist Medicare beneficiaries in selecting a plan, according to Dody Roberts, director of case management.
“All plans are not going to cover all prescriptions,” Ms. Roberts said.
