Medicare Supplemental Insurance

This story is from the Michigan Business Review:

General Motors Corp. retirees are likely in for sticker shock after the company announced it is cutting health benefits for retirees older than 65.

There are about 97,000 salaried retirees and at least half will be affected by the change. The cuts were announced as part of a $15 billion cost reduction plan for GM.

“There’s going to be some shock when it comes to premiums and extra costs for what the options are,” said Sue Mathiesen, director of research for McGraw Wentworth, a Troy-based benefits consulting firm.

“If I were an insurance organization, I certainly would be marketing to these folks about the options that are available.”

The retirees had a menu of plans available through GM, and will now get a $300 per-month pension addition to pay for Medicare and supplemental insurances associated with it, said GM spokeswoman Michelle Bunker.

GM has contracted with Extend Health to help retirees transition out of the GM plans.

“I think that the retirees will want to take advantage of Extend Health – it will help them re-enroll and to review their options,” said Bunker.

Health Alliance Plan worked with Extend Health when Ford retirees made the transition last year, said Karen Wintringham, vice president, Medicare and public sector programs for HAP.

“The task that faces us is to take a lot of time in educating these retirees, they have had these rich benefits for years and now they will be faced with a large number of choices,” Wintringham said. “We did 300 seminars last year (for Ford).

“We will propose setting up small seminars where people can ask questions and be completely comfortable before they make a decision,” said Wintringham, who has a meeting scheduled with GM.

“Blue Cross Blue Shield of Michigan has served GM employees for decades and we are committed to continuing to stand ready to serve GM retirees during this time of change,” BCBSM said in a statement. “We will be working with GM to provide educational materials to retirees later this fall about Blue Cross Blue Shield and Blue Care Network health plans available to retirees. GM has mailed letters directly to current retirees with information and a FAQ and indicated that this information should arrive at their homes later this week.”

All of the insurance companies will be prepared to work with retirees on Medicare supplemental programs, she said.

But it’s going to be an education curve, Mathiesen said, because Medicare plans have various copays, deductibles and options.

“To get to the point where they were with GM, they will have to pay for supplement plans, there are 12 different ones; some will cover the deductible, some will cover emergency care out of country,” Mathiesen said. “The retirees have to choose what’s best for their situation.”

The concern when companies discontinue insurance - even given additional payments into the pension - is that they will opt for basic Medicare, leaving themselves underinsured and creating a strain on the system, said Michael Genord, president-elect of the Oakland County Medical Society.

“Any time we see a cutback like this, we see this shift and more people are underinsured, and we’re seeing more doctors not accepting Medicare because it doesn’t pay as well,” Genord said, noting many just pocket the extra money or pay bills.

“Some of these patients won’t get preventive care and will show up in emergency rooms more,” Genord said. “So we see our older population not getting the care they should.”

Wintringham said she doubts salaried workers will become underinsured.

“Medicare alone is probably too risky, the financial risk is too much of a chance,” she said.

This is from NAHU:

The (7/16, Gaouette) reports that “Congress delivered a stern rebuke to President Bush on Tuesday, overriding his veto of a Medicare bill, and preventing pay cuts to doctors who treat seniors, the disabled, and military personnel.” The measure “halts a scheduled 10.6 percent cut in payments to physicians, and institutes a 1.1 percent payment increase in 2009.” Even though the President had “little chance of prevailing, Bush issued the veto [Tuesday] morning, declaring the bill ‘objectionable,’” and “fiscally irresponsible.”

According to the (7/16, A13, Pear), “In his veto message, Mr. Bush said he objected to the bill because it would cut federal payments to Medicare Advantage plans and slow the growth of such plans, offered by insurance companies as an alternative to traditional Medicare.” The President added, “I support the primary objective of this legislation, to forestall reductions in physician payments,” but “taking choices away from seniors to pay physicians is wrong.” The Times points out, however, that “[m]any independent studies have found that the private plans, sold by insurers like Humana and UnitedHealth, cost the government more per person than traditional Medicare.” Still, the President insisted “that reducing payments to the plans would force them to ‘reduce benefits to millions of seniors.’”

Just hours after the veto, the “House voted 383 to 41 to override” it, “while the Senate voted 70 to 26, in both cases far more than the two-thirds necessary to block the President’s action,” the (7/16, A2, Abramowitz, Kane) adds. By casting this vote, “Republicans broke heavily from the White House. A total of 153 House Republicans voted to defy the White House, 24 more than in a June 24 vote that started the momentum toward passage of the Medicare doctors’ bill” Tuesday. Furthermore, “21 Senate Republicans voted for the bill this time, including four senators who had voted ‘nay’ in the two previous Medicare votes.”

The (7/16, A6, Mathews) reports that the “new law is a victory for Democrats after a partisan standoff that dragged on for weeks. It was broken dramatically last week when Massachusetts Sen. Edward Kennedy (D-Mass.) returned to the Senate floor to cast a decisive vote.” The Medicare measure “is also a win for doctors, among other lobbying interests, largely at the expense of health insurers,” which “will face cutbacks to the Medicare” Advantage plans they offer.

The (7/16, Freking), (7/16, Marcus), Minnesota’s (7/16), (7/16, Armstrong), (7/16, Young), ’s (7/15, Winter) On Deadline blog, the ’s (7/15, Graham)Triage blog, the (7/16, Ward), (7/15, Walker), (7/15, Lubell), and (7/15) also covered the story.

Various health sectors benefit from Medicare veto override. (7/16, Young) reports that “[a]lmost lost amid the donnybrook between physicians and health insurers over Medicare is how many other healthcare sectors scored wins in the Medicare bill that” passed Tuesday. For instance, the legislation “includes a delay in the implementation of a competitive bidding program that most of the DME [durable medical equipment] industry opposed, led by the American Association for Homecare and companies like Invacare and American HomePatient, that make or sell oxygen tanks, wheelchairs, diabetes test strips, and other supplies.” In addition, the “drugstore industry won some long-sought-after provisions in the legislation,” such as the “requirement that drug plans pay pharmacies for the medicines they dispense within 14 days.” And, the “bill…contains provisions to delay the implementation of a change to the Medicaid drug pricing formula, called ‘Average Manufacturer Price,’ opposed by pharmacies.”

President Bush vetoed legislation Tuesday that would undo a 10.6 percent cut in Medicare fees to physicians.

The expected veto sets up action in the House and Senate, with both chambers planning on holding votes later Tuesday aiming to overturn Bush’s veto. 

Complete story at The Hill.com. 

Effective 9/1/2008, United World, a subsidiary of Mutual of Omaha, will be taking a rate increase in the following states:  Illinois (IL), Iowa (IA) and Oklahoma (OK).  The rate increases are as follows:

• Iowa – Plans C & D = 0%; Plans A, B & G = 9%; Plan F = 14%
• Illinois – Plans A & B = 0%; Plan G = 16%; Plan F = 18%
• Oklohoma – Plans C & D = 0%; Plan G = 8%; Plans A, B and F = 14%

The new rate sheets should be available around mid-August.  The full announcement will be posted on our Resources page (select United World and the appropriate state) by the end of the week.