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Inflation Reduction Act to be Signed into Law, Includes Multiple Medicare Drug Pricing Reforms

Inflation Reduction Act to be Signed into Law, Includes Multiple Medicare Drug Pricing Reforms

Inflation Reduction Act to be Signed into Law, Includes Multiple Medicare Drug Pricing Reforms

On Aug. 12, the Inflation Reduction Act of 2022 (IRA) passed the U.S. House by a vote of 220-207, and President Biden is expected to sign it into law today. First passed by the U.S. Senate on Aug. 7, the $740 billion budget reconciliation package includes policies on Medicare drug pricing, Affordable Care Act (ACA) subsidies, energy, climate, and taxes. This update provides high-level details on the notable health care-related provisions in the IRA.

Allowing Medicare to Negotiate Drug Prices

With the goal of improving affordability for high-priced drugs in Medicare Parts B and D, the IRA directs the Department of Health and Human Services (HHS) to establish a drug price negotiation program for certain high-priced, single-source drugs and biological products. Under this program, the HHS Secretary will publish a list of selected drugs that meet certain criteria, then negotiate (and renegotiate as needed) maximum fair prices with manufacturers of those drugs. Drugs eligible for negotiation include the 50 Part B and 50 Part D single-source drugs with the highest total expenditures during the most recent 12-month period; however, negotiation is limited to Part D drugs for 2026 and 2027. Negotiated prices must take effect for 10 eligible drugs in 2026, increasing to 20 drugs in 2029. For 2026, the expenditure period to be reviewed is June 1, 2022 through May 31, 2023, and the selected drug list publication date will be Sept. 1, 2023.

Redesigning the Medicare Part D Program, Including Capping Annual Out-of-Pocket Costs for Beneficiaries

The IRA significantly reforms the Medicare Part D benefit design, including capping maximum out-of-pocket (OOP) costs at $2,000 annually, with a copay smoothing component; capping annual premium growth at 6%; and expanding eligibility in the Low-Income Subsidy (LIS) program.

Beneficiary Cost-Sharing Changes:

Beginning in 2024, beneficiaries will be responsible for $0 in the catastrophic benefit phase. There are no changes to the initial coverage phase or coverage gap phase.
Beginning in 2025, the coverage gap phase will be eliminated, and a new $2,000 OOP cap will be applicable with the option to spread OOP payments out over the course of the year. The initial coverage phase remains unchanged.

Part D Benefit Design: The bill restructures plan, manufacturer, and federal government liabilities for the different benefit phases beginning in 2025:

Initial PhaseCatastrophic Phase
Beneficiary: 25%
Plan: 65% for brands, 75% for generics
Manufacturer: 10% for brands, 0% for generics
Beneficiary: 0%
Plan: 60%
Manufacturer: 20% for brands, 0% for generics
Federal Government: 20% for brands, 40% for generics
Premium Stabilization: For 2024 through 2029, any increase in the Part D base beneficiary premium is limited to the lesser of a 6% increase from the previous year or the premium that would have been applied if the stabilization program was not established. In 2030 and subsequent years, the HHS Secretary is authorized to make adjustments necessary to the base Part D premium to ensure that premium is increased by the lesser of 6% or what the premium would have been if the stabilization program was not established.
Expanded LIS Eligibility: The bill expands eligibility for the Part D LIS program from 135% of the federal poverty level to 150% beginning in 2024.

Capping Insulin Cost-Sharing in Medicare

For 2023 through 2025, the bill caps beneficiary cost-sharing at $35 a month for Medicare Part D or Medicare Advantage Prescription Drug Plan (MA-PD) covered insulin products. In 2026 and beyond, it caps cost-sharing at the lesser of $35 or 25% of the maximum fair price or 25% of the plan’s negotiated price. The cost-sharing is capped regardless of where the beneficiary is in the benefit phase, and Part D and MA-PD plans are eligible for a retroactive subsidy in 2023 equal to the aggregate reduction in cost-sharing and deductible due to implementing this provision.

Implementing Drug Manufacturer Inflationary Rebates in Medicare

The legislation requires drug manufacturers to pay rebates to the government if drug prices in Medicare Part B and Part D rise faster than inflation, with rebates equaling the rate at which the price of the drug exceeds inflation. This rebate provision goes into effect Jan. 1, 2023 for Part B rebatable drugs and Oct. 1, 2022 for Part D rebatable drugs. Drugs with an average cost of less than $100 are excluded. Additionally, HHS is instructed to reduce or waive the rebate amount for a Part D rebatable drug if it is on the drug shortage list, per the Federal Food, Drug, and Cosmetic Act.

Requiring Vaccine Coverage in Medicare Part D

Beginning in 2023, Part D plans are required to cover all adult vaccines recommended by the Advisory Committee on Immunization Practices, without cost-sharing or the application of a deductible (other than vaccines covered under Part B). Part D and MA-PD plans are eligible for a retroactive subsidy in 2023 equal to the aggregate reduction in cost-sharing and deductible due to implementing this provision.

Extended Delay of the Medicare Part D Rebate Rule

The legislation includes an additional five-year delay of the implementation of a rule that would prohibit manufacturer rebates in Part D, to Jan. 1, 2032.

Extending Enhanced ACA Subsidies Through 2025

Originally set to expire at the end of this year, the IRA extends the enhanced American Rescue Plan Act (ARPA) ACA premium tax credit subsidies through 2025.

Article credited to CIGNA.
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Medicare 2022 Open Enrollment

Medicare 2022 Open Enrollment

Medicare 2022 Open Enrollment

Full Information

 

Medicare Supplemental Plan F phased out for newly Medicare eligible? With the new 2022 open enrollment changes, it’s time to get the facts. Considering making changes to your coverage this fall or just want to learn more about this enrollment period?

During the Medicare open enrollment period – which runs from October 15 through December 7 – you can make a variety of changes (none of which involve medical underwriting):

  • Switch from Medicare Advantage to Original Medicare or vice versa.
  • Switch from one Medicare Advantage plan to another.
  • Switch from one Part D prescription plan to another.
  • Join a Medicare Part D plan.
  • Drop your Part D coverage altogether.

1. Medicare Supplement Plans F and C are still available

While the Centers for Medicare and Medicaid (CMS) will no longer allow newly eligible Medicare beneficiaries to enroll in Medigap plans F and C, these plans aren’t disappearing completely. If you become eligible for Medicare before January 1, 2021 (and that’s everyone who can use the 2021 fall Medicare Open Enrollment Period), you can apply for these plans now and in the future—even if you aren’t already enrolled in Medigap.

If you become eligible for Medicare on or after January 1, 2020, you won’t be able to enroll in Plans F or C now or in the future.

 

2. The Part D ‘donut hole’ will close

In 2022, you’ll enter the donut hole when your spending + your plan’s spending reaches $4,430. And you leave the donut hole — and enter the catastrophic coverage level — when your spending + manufacturer discounts reach $7,050. Both of these amounts are higher than they were in 2021, and generally increase each year.  Learn more about Part D.

3. Changes in Medicare Advantage and Part D plans

Every year, insurers make small changes to their Medicare Advantage and Part D plans. Typically, these changes include changes in premiums, deductibles, and other costs. Keep in mind, the Medicare program may not finalize these changes until right before fall Open Enrollment.

See the latest Medicare premiums and deductibles now or come back in October. We’ll share finalized changes as soon as they become available.

Refresh your general Medicare knowledge

While the Medicare program changes a bit each year, much of it stays the same. It never hurts to refresh your Medicare knowledge. We recommend starting with an Overview of Medicare. This Medicare Glossary could come in handy, too, as you read through insurance documents.  See 

CMS Releases 2022 Projected Medicare Part D Average Premium

 

4. Medicare B Increases 

Medicare Part B premiums increased this year by about 2.7% or $4 per month and high-income surcharges also rose modestly in 2021. For 2022 the Standard Part B premiums are projected to be $158.50/month from $148.50/month in 2021 or a 6.7% increase.

The wealthiest senior couples will be paying more than $12,000 a year in Medicare Part B premiums. Part B (the base and the surcharge) covers doctors’ and outpatient services. Medicare Part B Income-Related Monthly Adjustment Amounts.

5. Part B deductible also increased for 2021, and will increase again in 2022

Medicare B also has a deductible, which increased to $203 in 2021, up from $198 in 2020. For 2022, the Part B deductible is projected to be $217. The Medicare Part B deductible only has to be paid once per year, unlike the Part A deductible, which has to be paid once per benefit period.

 

 Do you have to renew your plan?

If you’re happy with your Medicare coverage, there’s no need to do anything during Medicare Open Enrollment. Provided your current plan is available next year, your coverage will auto-renew.

Although you could let Open Enrollment pass right on by without having to lift a finger, we recommend doing two things this fall to optimize your Medicare coverage.

1. Read Medicare Mailers

If your plan is discontinued next year, you’ll receive a notice in the mail. If you miss this notice and fail to enroll in other coverage, you could lose your coverage.

If your plan continues in the following year, your insurer will send you an Annual Notice of Change (ANOC). Look over your ANOC carefully to make sure your plan will still meet your needs next year. If not, its time to consider other options.

 

No matter how you feel about your current plan, it’s usually a good idea to do a little shopping around during Open Enrollment. Since plans and premiums change annually, options that fit your situation even better than your current coverage could pop up. But if you don’t check, you’ll never know.

Know These Dates

OCT 15 - DEC 7

OPEN ENROLLMENT PERIOD for Medicare Advanatage and Medicare Part D Prescription Drug coverage.  All individuals with Medicare can change their Medicare health plan and prescription drug coevrage for the next year. 

JAN 1 - FEB 14

MEDICARE ADVANTAGE DISENROLLMENT PERIOD. Those with MA plans (Part C) can leave the plan and switch to original Medicare.

JAN 1 - DEC 31

MEDICARE SUPPLEMENT (Medigap) plans can be purchaded year-round but may require answering health questions to determine eligibility.  

Total Number of Million Medicare Beneficiaries. Source: Kaiser Family Foundation

2020

2018

2017

2015

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2021 Medicare Parts A & B Increase

2021 Medicare Parts A & B Increase

Medicare Part B premiums will increase by about 2.7% or $4 per month next year and high-income surcharges will also rise modestly in 2021, the Centers for Medicare and Medicaid Services announced last week.The wealthiest senior couples will be paying more than $12,000 a year in Medicare Part B premiums. Part B (the base and the surcharge) covers doctors’ and outpatient services.Medicare Part B Income-Related Monthly Adjustment Amounts.

Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts affect roughly 7 percent of people with Medicare Part B. The 2021 Part B total premiums for high-income beneficiaries are shown in the following table:

Beneficiaries who file

individual tax returns with income:

Beneficiaries who file

joint tax returns with income:

Income-related monthly adjustment amountTotal monthly premium amount
Less than or equal to $88,000Less than or equal to $176,000$0.00$148.50
Greater than $88,000 and less than or equal to $111,000Greater than $176,000 and less than or equal to $222,00059.40207.90
Greater than $111,000 and less than or equal to $138,000Greater than $222,000 and less than or equal to $276,000148.50297.00
Greater than  $138,000 and less than or equal to $165,000Greater than $276,000 and less than or equal to $330,000237.60386.10
Greater than $165,000 and less than $500,000Greater than $330,000 and less than $750,000326.70475.20
Greater than or equal to $500,000Greater than or equal to $750,000356.40504.90

Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:

Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses:Income-related monthly adjustment amountTotal monthly premium amount
Less than or equal to $88,000$0.00$148.50
Greater than $88,000 and less than $412,000326.70475.20
Greater than or equal to $412,000356.40504.90


Medicare Part B Premiums/Deductibles

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.  

The standard monthly premium for Medicare Part B enrollees will be $148.50 in 2021, an increase of $3.90 from $144.60 in 2020. Recent legislation signed by President Trump significantly dampens the 2021 Medicare Part B premium increase that would have occurred given the estimated growth in Medicare spending next year. Medicare spending is estimated to grow due to people seeking care they may have delayed during the COVID-19 public health emergency, availability of more COVID-19 treatments, and availability of COVID-19 vaccines (for which CMS recently announced that there would be no out-of-pocket costs for seniors).

CMS also announced that the annual deductible for Medicare Part B beneficiaries is $203 in 2021, an increase of $5 from $198 in 2020.

Medicare Part A Premiums/Deductibles

Part A Deductible and Coinsurance Amounts 
20202021
Inpatient hospital deductible$14081484
Daily coinsurance for 61st-90th Day$352$371
Daily coinsurance for lifetime reserve days$704$742
Skilled Nursing Facility coinsurance$176$185.50

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not pay a Part A premium since they have at least 40 quarters of Medicare-covered employment.

The Medicare Part A inpatient deductible that beneficiaries will pay when admitted to the hospital is $1,484 in 2021, an increase of $76 from $1,408 in 2020.

Medicare Open Enrollment

Medicare beneficiaries can choose to enroll in fee-for-service Original Medicare (Parts A and B) or can select a private Medicare Advantage plan to receive their Medicare benefits. Premiums and deductibles for Medicare Advantage and Medicare Prescription Drug plans (Medicare Part D) are already finalized and are unaffected by this announcement.

During the ongoing Medicare Open Enrollment – which began on October 15, 2020 and ends December 7, 2020, more than 60 million Medicare beneficiaries can compare coverage options like Original Medicare (Part A and Part B) and Medicare Advantage, and choose health and prescription drug plans for 2021. Medicare health and drug plan costs and covered benefits can change from year-to-year. CMS urges Medicare beneficiaries to review their coverage choices and decide on the options that best meet their health needs. Over the past three years, CMS has made it easier for seniors to compare and enroll in Medicare coverage. The redesigned Medicare Plan Finder makes it easier for beneficiaries to:

  • Compare pricing between Original Medicare, Medicare Advantage plans, Medicare prescription drug plans (Medicare Part D), and Medicare Supplemental Insurance (Medigap) policies;
  • Compare coverage options on their smartphones and tablets;
  • Compare up to three Medicare Part D drug plans or three Medicare Advantage plans side-by-side;
  • Get plan costs and benefits, including which Medicare Advantage plans offer extra benefits;
  • Build a personal drug list and find Medicare Part D prescription drug coverage that best meets their needs.

Highlights for 2021 Open Enrollment include:

  • A 34 percent decrease in average monthly premiums for Medicare Advantage plans since 2017. This is the lowest average monthly premium since 2007. Beneficiaries in some states, including Alabama, Nevada, Michigan, and Kentucky, will see decreases of over 50 percent in average Medicare Advantage premiums.
  • More than 4,800 Medicare Advantage plans are offered for 2021, compared to about 2,700 in 2017. Similarly, more Medicare Part D plans are available, and the average basic Part D premium has dropped 12 percent since 2017. 
  • Medicare beneficiaries can join a prescription drug plan that will offer many types of insulin at a maximum copayment of $35 for a 30-day supply. More than 1,600 Medicare Advantage and Part D prescription drug plans are participating in the Part D Senior Savings Model for 2021. People who enroll in a participating plan could save up to an

An estimated $446 a year in out-of-pocket costs on insulin. CMS has added a new “Insulin Savings” filter on Medicare Plan Finder to display plans that will offer the capped out-of-pocket costs for insulin. Beneficiaries can use the Medicare Plan Finder to view plan options and look for a participating plan in their area that covers their insulin at no more than a $35 monthly copay.

Part D Premium Decrease

CMS announced in July that the average basic premium for Part D, private health plans which cover prescription drugs, is $30.50 for 2021, down 12% from 2017. 

More Info

Already 65+? Good news, #Medicare Plan F still available. There is still 1 month left before Dec 7th Open Enrollment deadline. With the new 2021 open enrollment changes, it’s time to get the facts. Considering making changes to your coverage this fall or just want to learn more about this enrollment period? Schedule a 1-on-1 and get in touch now, more info.   

 

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Election Reaction on Healthcare, The Day After

Election Reaction on Healthcare, The Day After

 

 

 

Although millions of presidential ballots are still being counted, total voter turnout is already approaching 2016’s level. Joe Biden appears to be increasingly getting closer to winning the presidency but at the same time, the Senate is likely to still be a Republican stronghold since 2014.

With a number of mail-ballots and absentee ballots to be tallied in states across the country, it is presumed that a clear winner may not be identified until the end of the week, at the very least. So what does a Biden victory mean for healthcare?

Rollbacks

If Joe Biden is declared the new U.S. President, the Affordable Care Act is expected to be strengthened. While States like NY/NJ have created their own Individual Mandate this is expected to be trite with likely rollback of the Federal Individual Mandate repeal. Rolling back of Medicaid spending back to the States is likely.  Additionally, likely rollback of Trump association health plan rules, or even completely remove them. Trump administration made adjustments to the rules of these types of plans and essentially lessened the requirements for employers forming these types of associations.

Single-Payer

Lowering Medicare eligibility to age 60. And creating a “public option” government health plan.

  • Medicare for All

    Medicare for All proposals call for the repeal of the ACA and replace it with rapid, nationalized health care for all Americans. Instead of co-pays and deductibles, Medicare for All would be funded instead by increased taxes on employers and certain segments of the public and pay for all health care through a “single-payer” (the federal government) system. Dental and vision would be included as well. The role of private insurers would be limited only to niche plans covering elective and other non-essential medical procedures.

  • Medicare for All Who Want It

    Medicare for All Who Want It proposals increase access to Medicare to all while maintaining a role for private insurers through supplemental Medicare plans to provide additional coverage. Babies may be born into Medicare, depending on the proposal, while leaving the opportunity for parents to opt-out of that coverage for their children. The system would be paid for in part through premiums and partly through taxes. Proponents of this approach look to maintain a role for private Insurers while establishing a foundation of government negotiated rates, designed plans while reducing the uninsured rate.

For now, the ACA remains law of the land, and employers are encouraged to make ACA compliance a priority, especially with penalties increasing in 2021. Contact us to learn more about your organization’s 2021 renewal options.

2020 Election President Status Nov 5th, 2020
Senate Race 2020 Election Status Nov 5, 2020
Congressional Election Status 2020

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Study: Single Payer Aftermath

Study: Single Payer Aftermath

As Americans learn more about proposed new government-controlled health insurance systems – like Medicare for All, the public option, Medicare buy-in and other similar one-size-fits-all systems – a new study on teh aftermath of Single Payer by KNG Health Consulting is providing a glimpse into the real-life consequences these systems could have on American families. 

50% of Americans would give it thumbs up according to Kaiser Family Foundation. That majority support turns to opposition once people learn Medicare for All would ban private insurance. Turns out 70% of Americans are also satisfied with their employer-sposnored health insuarnce.   The plan grants the federal government a monopoly on health insurance — no private insurers or employers would be permitted to pay for health benefits.

Many Americans would understandably switch from private insurance to the public option. As they did so, hospitals and doctors would raise prices for the privately insured to compensate. Insurers would be forced to hike premiums in response, to cover providers’ higher payment demands. That would compel even more individuals to switch to the public option.

Some employers would surely do the same, dropping their benefits programs and encouraging their workers to enroll in the public plan. Indeed, a recent study from KNG Health Consulting found that Medicare for America — a proposal that would transfer everyone who does not receive coverage through an employer to a government-run plan — would cause one in four workers to lose access to employer-sponsored insurance by 2023. More than half of employees at small businesses would lose their employer-sponsored coverage under Medicare for America.

Among the most startling findings, Medicare for America could force one-third of American workers off of their current employer-provided health care coverage, also known as employer-sponsored insurance (ESI). 

 

The KNG study on “Medicare for America” points to an unaffordable new government-controlled health insurance system that reduces Americans’ choice and control over their care.  Whether it’s called Medicare for All, Medicare for America, Medicare buy-in or the public option, Americans would pay more and wait longer for worse care.

And instead of addressing rising health care costs, the study finds that this new government-controlled health insurance system “would increase total health care spending, with the largest spending increases occurring among those who already had public coverage through Medicare or Medicaid.”

 

Hospitals would lose. Approximately 5,000 community hospitals would lose over $151 billion under a Medicare for All system, according to a recent Stanford University study. Robert Pollin — an economist at the University of Massachusetts Amherst and supporter of Medicare for All — estimates that 2 million jobs across hospitals, health care facilities and the insurance industry could disappear.

According to CBO (Congressional Budget Office) that Medicare for All could “lead to a shortage of providers, longer wait times and changes in the quality of care.”

Ultimately, the public option would be the ONLY option. The insurance market can’t function unless all the players in the market are operating by the same rules.As Seema Verma, administrator of the Centers for Medicare & Medicaid Services, rightly put it, “The public option is a Trojan horse” for Medicare for All.

So which one is it?  An added public option that doesn’t have to compete or really one costly government option? Both options seem to fall short of their ideals.   

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Medicare Last Chance for 65 and Older

Medicare Last Chance for 65 and Older

Already 65+? Good news, #Medicare Plan F still available. There are 2 weeks left before Dec 7th Open Enrollment deadline. With the new 2020 open enrollment changes its time to get the facts. Considering making changes to your coverage this fall or just want to learn more about this enrollment period? Get in touch now.

1.Medicare Supplement Plans F and C are still available 

While the Centers for Medicare and Medicaid (CMS) will no longer allow newly eligible Medicare beneficiaries to enroll in Medigap plans F and C, these plans aren’t disappearing completely. If you become eligible for Medicare before January 1, 2020 (and that’s everyone who can use the 2020 fall Medicare Open Enrollment Period), you can apply for these plans now and in the future—even if you aren’t already enrolled in Medigap.  

If you become eligible for Medicare on or after January 1, 2020, you won’t be able to enroll in Plans F or C now or in the future.

2.The Part D ‘donut hole’ will close

Beginning in 2020, the coverage gap for Part D plans won’t exist anymore. Previously, beneficiaries would see increased out-of-pocket costs after the value of the covered prescriptions they’ve purchased reaches $3,820. Starting January 1, 2020, beneficiaries will pay just 25% of drug costs in this coverage gap or “donut hole”—or about the same as what they paid before entering the donut hole.   Learn more about Part D.  

3.Changes in Medicare Advantage and Part D plans  

Every year, insurers make small changes to their Medicare Advantage and Part D plans. Typically, these changes include changes in premiums, deductibles, and other costs. Keep in mind, the Medicare program may not finalize these changes until right before fall Open Enrollment. 

 

While the Medicare program changes a bit each year, much of it stays the same. It never hurts to refresh your Medicare knowledge. We recommend starting with an overview of Medicare. This Medicare Glossary could come in handy, too, as you read through insurance documents.

 

 

Plan Comparison Tool

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Learn more about your Medicare options please contact us at info@medicalsolutionscorp.com or (855)667-4621.

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For more information on PEOs or a customized quote please submit your contact. We will be in touch ASAP.