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Recession Proofing Your Insurance

With many in the valley being laid off or facing deceasing budgets, it may be worthwhile to review your insurance policies.   Many forget your premiums are not only determined by what deductible you may have but by the optional benefits that may come with the policy.  For example, in health insurance policies, you may be able to look into the cost of optional benefits like doctor office co-pays, coinsurance levels, prescription drug benefits, and/or preventative services.   Determine your usage and look closely at the premium differences among different insurance carriers with the optional benefits of your policy.

If you have been recently laid off from work, look into the cost of COBRA or State Continuation of Coverage but also look into temporary health insurance to minimize your cost.  Temporary health insurance is short term health insurance for less than a year; but perfect for people in between jobs, waiting to become eligible for their new group health plan, or waiting to go onto Medicare.  It is often times the least expensive way to go to have health insurance coverage in these situations.

Lastly, if you have not shopped around – take the time to do so.  Many people, unfortunately, do not shop around for the most effective insurance and it ends up meaning hundreds or even thousands of dollars being wasted.  Remember, insurance companies change their rates and benefits and it is worthwhile to keep on top of it.

On January 1^st, 2009, the State of Colorado became a Long Term Care Partnership State.  In essence if you purchase a Long Term Care Partnership Policy, every dollar that is paid out in benefits, a dollar of personal assets can be protected if you need to begin qualifying for Medicaid.  The State of Colorado is encouraging and rewarding citizens of Colorado with estate preservation protection for planning for their future Long Term Care and Home Health Care needs.

Colorado has two goals which are to assist their citizens in planning their future Long Term Care insurance needs through quality Long Term Care Insurance.  Secondly, the State wants to do this without depleting all their resources (assets) to pay for Long Term Care and Home/Community Based Services (HCBS).

A Partnership policy requires that a 5% compound inflation rider for individuals applying before 61 years of age.  From 61 to 75 years of age they require a 5% simple inflation rider.  For individuals 76 years of age or older there is no inflation protection required.

Remember, the most often used benefit in a Long Term Care insurance policy is for custodial home health services.  Insurance companies are suggesting policies that provide for at least $150-$200 in daily benefits.  Generally, the cost of waiting is between 2.5-5% after age 50.  After 65 years of age the cost of waiting to purchase a LTC policy is generally 10% a year making it very costly for individuals after age 70. 

Not everyone will want to purchase a Long Term Care Partnership Policy.  For some a short term Convalescent Policy (LTC/HCBS benefits up to 1 year) may be sufficient with assets and planning and can find these priced at under $100/month.  Other options include self-funding, LTC life insurance riders, LTC riders with annuities, or family care options.

Insurance companies have filed their modifications and benefits with Centers for Medicare Services for the year 2009 for Medicare Part D Prescription Drug Plans, Medicare Advantage Plans, and Medicare Choice Plans.  Around October 15^th, this information will be released and can be viewed on medicare.gov and of course Medicare Annual Election begins November 15^th and runs to December 31^st.  With this in mind, Medicare beneficiaries need to begin thinking about how this may affect them and to reflect upon coverage in 2008.  Here are just a couple of points to consider:

1)      Medical Inflation – with medical inflation varying amongst areas and segments between 5-10% a year, you can bet you will see higher costs.  Many Medicare beneficiaries only look at the price of the plan to determine if their plan is cost efficient.  However, plans have several ways of increasing costs such as increasing co-pays (such as doctor office co-pays going from $15 to $20), increasing coinsurance for certain benefits, excluding certain procedures, limiting your network to certain areas, or even increasing your maximum out of pocket costs.  All these factors should be evaluated in determining if you plan is still the most cost effective for you.

2)      Part D Medicare Prescription Drug Plans – with several insurance companies indicating losses on their Part D prescription drug plans, this is one part of Medicare you will want to hone in on. Rumblings have been heard that we will see significant increases in the Part D this year – not only in premium but in co-pays amongst the different levels of drugs such as generics, preferred brand name, and non-preferred brand name.  Also, you will want to make sure your prescription drugs are still within the formulary of the plan.  The only way to ensure you are in the most cost efficient Medicare prescription drug plan is to run your personalized list of prescriptions through medicare.gov.  It will rank your unique list of prescriptions amongst different plans in order of most cost efficient to least cost efficient.

3)      Run all scenarios – many Medicare Beneficiaries don’t look at their options separately.  Yes, you can have a separate Part D Prescription Drug Plan with one insurance company with a Medicare Advantage Plan or Medicare Choice Plan with a different one.  Yes, you may look at a Medicare Supplement versus a Medicare Advantage Plan and you should evaluate this annually.  Rarely, do you see one insurance company solve everyone’s medical and prescription drug needs every single year.

4)      Physician Acceptance – let’s face it, Mesa County is far different than our Delta sister county to the south.  Many of their clinics are considered rural based and therefore get higher subsidization and therefore have to accept all insurance carriers.  Not so in Mesa County - here we are home to a Medicare Choice Contract with Rocky Mountain HMO that will be up for Federal review in 2010.  This competes against Medicare Advantage Plans as they pay doctors a higher reimbursement above the Medicare Assignment Rate whereas Medicare Advantage Plans pay the physicians 100% of the Medicare assignment rate.  Even though they are both federally subsidized programs, the different reimbursement rates cause insurance discrimination amongst these two programs.  Last year this was particularly the case with Primary Care Partners and Dr. Vincient, as they restricted their Medicare beneficiary patients to just RMHMO or original Medicare with a Medicare supplement.  It will be advisable again to make sure your physician will bill and/or accept your plan of insurance.

These are just a few of many suggestions to consider when you are evaluating Medicare options.  As 2009 information is released - utilize medicare.gov, contact your local SHIP office, or work with an insurance agency that represents multiple insurance companies to evaluate all your options.

Deciding where to retire and then moving into an area is often a daunting task. Especially as we get older change is often hard on us… several decisions have to be thoughtfully considered. Such as, do we move next to our children or grandchildren? In addition, if we do, which family pack to we choose to move near? Alternatively, do we move to a place with a friendly climate than the current climate we live in? What is the medical community like? Will they accept our insurance? How health insurance friendly is the medical community? Unfortunately, during this time in our lives, we simply cannot put a blindfold over our eyes turn around three times and put a pen on the map and say, “this is where we are going to retire”. Our carefree days of choice an happenstance are far better left to memories. We are at a point on our lives where our decisions need to be based more in fact than simple armchair analogies. Economists often use supply and demand curves as a tool to make decisions about the market place. More importantly, how a change in price will change the demand or supply for a good. We often recommend this analogy to our clients to help them make a decision about their health insurance. Ultimately this is used as a tool, to help them decide if the place they chose to retire or the current place they are living in is a safe place for them to live and retire in regards to their healthcare needs. In other words, we ask them to do an opportunity cost analysis in regards to their health insurance and medical needs, which is one of the most important decisions we will make for ourselves as we age. We briefly explain to our clients that when making a decision on where to retire you must also consider how health insurance friendly the medical community is in the community you choose to retire in. If the medical community is not very health insurance friendly, your retirement might not be as comfortable as to a community with a more health insurance friendly environment. We recommend looking for a community that widely accepts all health insurance – one that does not discriminate. The meat and potatoes of our philosophy is to be a smart and savvy shopper… shop for a community that has a medical community with a somewhat elastic demand and supply curve, in other words find medical providers and suppliers who will bill all health insurance. Watch out for a community that has an inelastic demand, a medical community that supports one insurance provider but does not support other health insurance choices that might actually be better for the medical consumer. The lack of insurance choices can raise the price of a good without much loss in demand for the product because there are no other options. The price and product become inefficient and the consumer suffers… better known as a monopoly or even in some cases an oligopoly. More importantly, a good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied. Usually these kinds of products are readily available in the market and a person may not necessarily need them in his or her daily life. On the other hand, an inelastic good or service is one in which changes in price witness only modest changes in the quantity demanded or supplied, if any at all. These goods tend to be things that are more of a necessity to the consumer in his or her daily life such as health insurance. However, when there are more choices in regards to health insurance the consumer has more control of the price and that is very important to retirees. There are a couple ways to find out if your community is health insurance friendly. You can call the State Insurance Commissioner’s Office. You can do research on Medicare.gov or contact your local SHIP office.

Home Health Care is vital to any area.  In the Grand Junction, CO area there are online comparisons available for facility performance in terms of:

• Percentage of patients who get better under the care
• Percentage of people who needed additional, unplanned care
• Percentage of people who get better at taking their meds correctly
• Percentage of people who stay at home after an episode of home health care ends.

Medicare.gov or HHS.gov are excellent websites for those who want to go online and see the comparisons themselves, but for our purposes for western Colorado residents we looked at the following facilities based on region:

Alpine Home Health Care in Clifton, CO –

• Scored typically lower than the state and national averages for patients who get better under care
• Scored typically lower than the state and national averages for patients who needed additional, unplanned care
• Scored a bit lower than the state average and 10% lower than national average for patients who get better at taking their meds
• Scored the same as the state average and higher than the national average for patients who stay at home after an episode of home health care ends

Community Hospital Home Health Services in Grand Junction, CO -

• Scored typically higher than the state and national averages for patients who get better under care
• Scored typically much higher than the state and the same as the national averages for patients who needed additional, unplanned care
• Scored higher than the state and national averages for patients who get better at taking their meds
• Scored much higher than the state and national averages for patients who stay at home after an episode of home health care ends

Hilltop Community Resources in Grand Junction, CO -

• Scored typically lower than the state and national averages for patients who get better under care.
• Scored a little higher than the state and national averages for patients who needed additional, unplanned care
• Scored considerably lower than the state and national averages for patients who get better at taking their meds
• Scored higher than the state and national averages for patients who stay at home after an episode of home health care ends

Homecare of the Grand Valley in Grand Junction, CO –

• Scored typically higher than the state and national averages for patients who get better under care
• Scored typically lower than the state and national averages for patients who needed additional, unplanned care
• Scored higher than the state and national averages for patients who get better at taking their meds
• Scored higher than the state and national averages for patients who stay at home after an episode of home health care ends

See :  about-the-nursing-home.doc for comparisons on long-term assisted living homes in Mesa County area.  You can view inspection information, quality, staffing and more at this link Nursing Homes.

Prescription Tidbits – for the insured

If you have prescription coverage in your health plan, you’ve probably noticed the difference between Brand Name coverage and Generics – especially in out-of-pocket costs.  But, did you know why that is?  Most drug companies are allowed to carry patents on their new drug releases for 17 years.  They must wait for the patents to run out before the drug can go out to market in a generic form.  Typically the savings discount for generic drugs compared to their Brand Name counterparts is about 65-70%.  According to the Congressional Budget Office, generic drugs save consumers an estimated $8-10 Billion a year at retail pharmacies.  Even more Billions are saved when hospitals use generics. 

 Worried about the differences in effectiveness between taking a Brand Name drug and a generic drug?  Prescription drugs are regulated by the FDA.  They require that all generic drugs have the same high quality, strength, purity and stability as brand-name drugs.  Although, it is believed that current regulations permit a variation of approximately 20% either way in the bioavailability of the active ingredient in generic drugs.  Bioavailability is used to describe the fraction of an administered dose of unchanged drug that reaches the systemic circulation (oxygenated blood flow from the heart to the body) – or, in other words, absorption into the bloodstream.  However, the general consensus is still that if there is a viable generic alternative to the Brand Name then that is the way to go. A little history on how and why Brand Name drugs “go generic.”  Drug Patents are protected for 17 years in order to protect the original developer.  Creating drugs costs a lot of money.  So, drug companies have exclusivity in a way to sell the drug at the price they want to.  When the patent expires and the FDA approves the generic version any other drug companies can start selling the generic version.   

August 6, 2008

UNINSURED vs. UNDERINSURED

Colorado Public Radio host Ryan Warner held an interview with Dr. Kent Voorhees, Vice President of Education of Family Medicine for the University of Colorado’s School of Medicine, on a Focus Group study he did on the underinsured (for healthcare) in Colorado.  For the purposes of the study he defines “underinsured” as those who spend 10% or more of their income on healthcare OR those who are at 250% of the poverty line and spend 20% or more of their income on healthcare.

 Dr. Voorhees stated that they went to 37 different doctors offices to get their statistics and the patients they used included a combination of people who are uninsured, have health insurance, have Medicare and/or have Medicaid.  Approximately 36% of the group were underinsured - they have health insurance, but often skip treatments, recommended care and prescriptions because they cannot afford to pay for them due to high deductibles, copays, etc.  50% of these underinsured feel that their health suffers because of this.   Of the Uninsured who skip treatments and prescriptions, 48% felt their health suffers. 

Another point brought up by the underinsured is that there are often exclusions or limitations in their health coverage that prevent them from getting covered for certain treatments that ARE AVAILABLE TO THE UNINSURED.

 This study did not even include people who never go to the doctor at all for treatments.

1/3 of the total group said they often skip recommended treatments and prescriptions due to cost.

Colorado lawmakers passed about 50 bills dealing with healthcare this year.  We have posted some information on a couple of them (see below).  Some of the bills add additional regulations for insurance companies in Colorado which could cause additional administrative costs for the providers and the insurers.  These bills are intended to make health care more readily available to people and promote consumer protection in the insurance industry.  Democrats & Republicans are at odds as to whether or not these bills will actually improve coverage options and healthcare for the average consumer. 

The Library of Science published a study to compare spending priorities for health care across a selection of predominantly middle-income countries, based on the opinions of current and future decision makers. Using an opinion poll questionnaire, 253 health professionals from six countries were surveyed, asking them to rank ten health interventions in order of priority for spending from most important (rank 1) to least important (rank 10). The questionnaire was based on a short questionnaire on priorities for health-care spending developed by Groves.Median Rankings of Health-Care Spending Priorities Across All Countries, in Order of Importance

1. Childhood immunisation
2. Anti-smoking education for children
3. GP care for everyday illness
4. Screening for breast cancer
5. Intensive care for neonates
6. Support for carers of the elderly
7. Treatment for people with schizophrenia
8. Hip replacement
9. Heart transplant
10. Cancer treatment for smokers

What is interesting in this list is that a new study released in Health Affairs found that out of 19 industrialized nations, the U.S. ranked LAST in preventable deaths. 

Seems to be at odds.

We have just posted a page that gives you some basic information on shopping for family health insurance plans. Especially if you’re not that familiar with the insurance shopping routine, our new page is a great starting point.

Click here to go there now.