Medicare Current Rates, News & Information

Today’s News: Medicare Funds to Exhaust in 2029, Higher Mortgage Insurance Fees Approved and Auto Insurance Customer Satisfaction Declines

Posted in Auto Insurance , Health Insurance , Home Insurance , Medicare

August 23rd, 2010
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A new government estimate shows that Medicare will run out of funds by 2029, 12 years later than originally expected. In other insurance news, higher mortgage insurance fees have been approved by Senate and a report from JD Power and Associates shows that auto insurance customer satisfaction has declined.

Medicare Funds to Exhaust in 2029

The Obama administration has released a new report showing that Medicare will exhaust its funds by 2029. While this sounds bad, it is actually 12 years later than a previous report. The administration credits the 12-year extension to the health care reform law and cuts in payments to medical providers that could raise money for the program.

However, Medicare’s chief actuary, Rich Foster, says the numbers are a bit rosier than they should be since cuts aren’t likely to stand—doctors will probably drop out of the program to save their practices instead of accepting the cuts (Wall Street Journal).

Higher Mortgage Insurance Fees Approved

Recently, we reported that mortgage insurance fees were likely to increase in the near future. Now it seems that Congress is taking steps to make this official.

In early August, Senate unanimously approved legislation that would give the Federal Housing Administration (FHA) the power to hike the monthly premiums it charges to consumers. Currently, borrowers who take out loans through FHA to cover the 20 percent down payment on a home loan (also known as mortgage insurance) pay an annual fee of 0.55 percent of the total loan.

Now, FHA has been given the power to increase the rate to 1.55 percent with President Barack Obama left to give final approval (Associated Press).

Auto Insurance Customer Satisfaction Declines

A study released by JD Power and Associates found that there has been a decline in auto insurance customer satisfaction so far in 2010. According to the study, satisfaction declined 10 points from 2009′s numbers to 777 on a 1,000-point scale.

The decline in satisfaction was largely attributed to the cost of coverage, which by itself declined 30 index points from 2009. However, other factors that attributed to overall dissatisfaction included interaction, billing and payment, policy offerings and claims (PR Newswire).

Today’s News: Digital Medical Records on 5-Year Deadline, AG Probes Life Insurance Industry and Policyholders Choose Not to Sue Auto Insurance Companies

Posted in Auto Insurance , Health Insurance , Life Insurance , Life Insurance Companies , Medicare , Met Life

August 11th, 2010
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The Obama administration has given the medical world five years to figure out how to move all medical records to a digital format, the New York attorney general is pushing for a probe into the life insurance industry and individuals recently surveyed revealed that if given the opportunity, they would not be interested in suing their auto insurance companies.

Digital Medical Records Get 5-Year Deadline

In mid-July, President Barack Obama dished out an ambitious five-year plan that would require doctors and hospitals to move all medical records to a digital format. This, according to his administration, would offer greater safety for patients, as well as lower costs for health care and health insurance.

As soon as 2011, the medical world will have access to federal money that could use to help lower the costs of the systems, as well as train workers for their use. Those who don’t comply with these guidelines by 2015 will face Medicare payment cuts (MSNBC).

AG Probes Life Insurance Industry

New York State Attorney General, Andrew Cuomo, recently stated he plans to open a fraud investigation into how life insurance companies pay out benefits after their policyholders die. Cuomo said that he believes some insurers are retaining life insurance beneficiaries’ funds in company-controlled accounts, rather than paying out lump sums because they earn higher rates of interest by holding on to the money. So far, his office has already subpoenaed Prudential Financial, Inc. and MetLife, Inc. in hopes of learning more about their use of life insurance policies (Associated Press).

Policyholders Choose Not to Sue Auto Insurance Companies

A new survey released by the Insurance Research Council (IRC) revealed that most Americans don’t believe that adopting new laws allowing people to sue their own auto insurance company for punitive damages is a good idea. The law relates to a first-party bad-faith lawsuit that allows one person to sue their own insurance company because they feel that the company acted in “bad faith” in the settlement of their claim.

So far, only a few states allow policyholders to sue their companies for this reason. However, according to the survey, 57 percent of respondents think the ability to do this is either a poor or only fair idea (PR Web).

Today’s News: Employers Urged to Expand Health Plans, Medicare Doughnut Hole Checks Coming and the Nation’s Dumbest Drivers May Live Near You

Posted in Health Care , Health Insurance , Medicare

July 28th, 2010
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The secretary of Health and Human Services is urging employers to hurry and expand their health insurance benefits plans to employees with older children, while the government announces that Medicare checks may be mailed soon to beneficiaries into the “doughnut hole.” And in auto insurance news, GMAC has taken time to tell you where you can find the nation’s dumbest drivers.

Employers Urged to Offer Coverage to Children Up to Age 26 ASAP

Kathleen Sebelius, the secretary of health and human services, urged employers to begin immediately offering or continue to offer health insurance coverage to employees’ children up to the age of 26 — and they need to do it at little or no additional cost. While the new health reform law will require employers to do this very thing later this year, the secretary wants them to get started as soon as possible, especially with many college students graduating to no jobs or health insurance. While 65 insurers have already agreed to make changes early, very few employers have modified their plans accordingly. (New York Times)

Medicare Donut Hole Checks to be Mailed

In order to fill the gap in Medicare coverage that many senior citizens find themselves suffering through when their federal subsidies temporarily end each year, the government is offering assistance. The gap, or “doughnut hole,” requires that senior citizens pay for their medicine on their own until they reach the catastrophic stage of their plans. When they reach this stage, the government will pay 95 percent of their drug costs. Unfortunately, seniors have to pay about $3,500 on their own in drug costs to reach this stage. To help, the government is offering $250 rebate checks to those who find themselves in the hole. (Insurance and Financial Advisor)

Do You Live Near the Nation’s Dumbest Drivers?

According to a new GMAC Insurance National Drivers test, which polled 5,202 licensed drivers from 50 states and the District of Columbia, you may very well be among the dumbest drivers in the nation (see map). The test asked 20 questions based on state department of motor vehicle exams and required that participants receive a grade of 70 percent or better to pass. The test found that one in five drivers nationwide lack the necessary knowledge to pass the written driving test. And where are the dumbest drivers found? Sorry New York. (CNN Money)

Today’s News: State Farm Drops Flood Insurance Nationwide, AMA Slams Senators in Ads and Mobile Devices to Impact Life Insurance

Posted in Health Insurance , Home Insurance , Medicare

June 9th, 2010
1 Comment

Major insurer, State Farm, has just dropped over a quarter of a million flood insurance policies, the American Medical Association takes a few jabs at senators who went on their Memorial Day breaks rather than finishing up work on an important Medicare task and mobile devices were noted among other major technologies to have a major impact on life insurance in the coming years.

State Farm Leaves Flood Insurance Program, Drops Customers Nationwide

State Farm Mutual announced its confirmation recently that it would stop administering federal flood insurance policies nationwide starting this fall. State Farm doesn’t insure property against floods or storm surge; however, it was the nation’s largest administrator of National Flood Insurance Program policies, writing federal flood policies in exchange for administrative fees and commissions. The company, which insured over 800,000 customers around the country, wants to focus more on the coverage its known for, leaving the government with the task finding a new flood insurance home the customers. (Sarasota Herald Tribune)

American Medical Association Creates Ad Campaign against Lawmakers

After the Senate chose to take its holiday break over completing some pressing bills, the American Medical Association (AMA) decided to launch an ad campaign to push the lawmakers back into action. The AMA’s main concern is implementing a freeze that would stop a 21 percent cut to the fees doctors receive in order to treat Medicare patients. The House voted to delay the cuts for 19 months on May 28; however, Senate did not make a decision before leaving for Memorial Day recess. The AMA’s TV, radio and print ads address this alleged neglect and the effects it’s having on doctors and patients as a result. (CNN Money)

Mobile Devices among Technologies to Impact Life Insurance

New information from Gartner, Inc., an information technology research and advisory company, has revealed that the life insurance industry should see some major adjustments over the next five years, largely due to new technologies like mobile devices and social networking technology. The company found that mobile devices in particular have had a profound influence on life insurance because they allow insurers to communicate directly with consumers and offer them real-time alerts and more. Gartner predicted that mobile devices will soon become a key imperative in the life insurance industry. (Stock Markets Review)

Today’s News: Doctor’s Face Medicare Payout Cut, IRS Announces Health Insurance Tax Credit and Health Insurers Fight Regulations

Posted in Health Insurance , Medicare , Small Business Health Insurance

May 18th, 2010
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The health care industry has undergone a number of changes in the past few days. Doctors, health insurance companies and even the IRS are making or seeing drastic adjustments – let’s take a closer look.

Doctor’s Face another Medicare Payout Cut

In March, we reported that doctors were ditching their patients because their Medicare payments had been cut by 21 percent. Now it appears that doctors could face yet another 21 percent payment cut in Medicare reimbursement on June 1. In 1997, a Medicare formula was established that said rates should be cut every year, but Congress has blocked the cut seven out of eight years.

In order to block the cut for June, Congress would need to vote within the next two weeks. (CNNMoney.com)

IRS Announces Health Insurance Tax Credit

As a part of the health care overhaul law, the IRS is planning to announce the ground rules for small firms that want to claim the new federal tax for health insurance. The tax credit would cover up to 35 percent of the premiums that some small businesses pay on behalf of their workers. However, the credit will only be applied toward dental and vision benefits – not medical.

In the meantime, small business lobbying groups have filed a lawsuit against the law, stating Congress doesn’t have authority to mandate coverage. (Associated Press)

Health Insurers Fight Regulations

Health insurance companies are lobbying to fight what they consider to be strict regulation of premiums and profits under health care reform. The companies’ lobbyists are trying to shape regulations so that there are better definitions of what “unreasonable” premium increases are – and to avoid having to pay consumers rebates if the companies do not spend enough on patient care.

Senator John D. Rockefeller IV (D-WV) said companies now want to control how laws are implemented since they couldn’t control health care reform’s passage. (New York Times)

Doctors Ditching Patients Due to Medicare Payment Cuts

Posted in Health Insurance , Medicare

March 4th, 2010
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Some physicians have started dropping their Medicare patients as a result of a 21 percent cut in payment rates that took effect Monday. While many doctors dont want to lose their patients, reports show that many simply cannot keep their businesses running with such a significant cut in Medicare payment rates.

Doctors Dilemmas

The major dilemma for doctors is that while they want to take care of their Medicare patients, it is too difficult to manage health care costs without receiving the same payments from the government. According to a CNNMoney.com report, some patient advocacy groups say that a growing number of doctors are boycotting against Medicare for this reason.

The problem is that this boycott doesnt just affect doctors; it affects 43 million American seniors who are currently receiving Medicare coverage.

What If Your Doctor Dropped You

If youve found that your doctor no longer will be offering services due to the cuts in Medicare payment rates then there are steps you can take to make sure youre getting the proper medical care:

• Ask for referrals: If your doctor has opted out, you could ask for referrals to doctors who are accepting new Medicare patients.
• Consider urgent care centers: If youre in between doctors, you could consider an urgent care center, which is typically a free-standing health clinic that could offer assistance to Medicare patients. However, its good to keep in mind that these centers shouldnt be used for ongoing physician care because they are not developed for such.
• Retail clinics: These clinics are usually found in stores like CVS and Walgreens. Theyre not meant to treat chronic problems but are an option for simple acute problems like sore throats.

Patients could also consider health care options for low-income patients.

The ideal recommendation would be to find another doctor who is able to accept new Medicare patients. But with health insurance rates increasing and payments being cut, it may be a difficult year for both patients and doctors.

Medicare Expansion is Dropped from Health Care Overhaul

Posted in Health Insurance , Medicare

December 16th, 2009
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Senate Democrats dropped a plan to expand Medicare on Monday. This move was another step for the Democrats in their continued effort to pass the health care overhaul, though not everyone is happy about it.

The Basics of the Medicare Expansion and Why They Let it Go

The idea for the Medicare expansion was to allow people ages 55 to 64 buy into Medicare. While Democrats wanted to keep the expansion in the bill, they decided that the battle they faced to keep it wasn’t worth holding up legislation that would overall extend coverage to tens of millions of Americans, so they dropped it.

Now that the Medicare expansion has been dropped, Democrats are that much closer to locking up the 60 votes they need to overcome the bill’s Republican opposition.

What the Expansion Could Have Done for Americans

The original hope for the Medicare expansion was that the three million Americans between the ages of 55 and 64 with no coverage could finally receive affordable coverage. While those under 65 would not have received the exact same benefits as their older counterparts, they would have been able to take advantage of certain benefits at a reduced price.

Some Senators argued that those who may be missing out on the Medicare expansion could still take advantage of subsidies that would allow them to buy private insurance at a reduced price. In fact, they argued, the Medicare buy-in would have actually been redundant.

While the bill still isn’t complete, the hope is that the Senate will get the bill passed by Christmas. In the meantime, we will have to wait and see what adjustments will be made and how they will affect the future of health care.

Do you think the Medicare expansion should have been dropped from the health care bill?

Medicare Not Easy to Obtain for Retirees Over 65

Posted in Health Care , Health Insurance , Medicare

December 3rd, 2009
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A new report from Wall Street Journal reveals the difficulties that retirees have with obtaining Medicare if they choose to work past the age of 65. According to the report, those who decide to wait to retire get caught up in a ton of red tape, making the struggle to retire on time or continue to work for money more difficult.

The Challenges of Acquiring Medicare

Most retirees assume that qualifying for Medicare is a simple process – so simple, in fact, that they automatically get enrolled when they retire as long as they’re 65 or older. Nothing could be further from the truth.

The only time that the process is simple is when a retiree is already collecting Social Security benefits when they reach 65 – then they’re automatically enrolled in Medicare. However, if they retire after age 65, there are some loopholes they may fall into.

Loopholes for Retirees Over 65

One problem that many retirees encounter when trying to qualify for Medicare after age 65 is the decision to take COBRA (an extension of employer health care benefits). The only problem is that retirees only get eight months to apply for Medicare after retiring if they’re already 65-years-old. Since COBRA lasts for 18 months, they have no idea that they need to apply.

Then when the COBRA benefits run out, the retirees are left with nothing until they’re able to apply during open Medicare enrollment in January of the following year. Even worse, the benefits don’t kick in until July and even then the retiree is subject to a 10 percent late-enrollment penalty.

The Moral of the Story?

It is extremely difficult to acquire affordable health care without some type of health insurance, be it a company’s plan or Medicare. So it is more important than ever to ensure that you do your homework on when you can enroll in Medicare. Some plans will allow you to enroll even while you’re still working. And those that don’t will require you to enroll within eight months of leaving your job to avoid a delay in insurance and a penalty.

If you would like to stay with your own company’s insurance through COBRA after retiring, hopefully you can time your enrollment in Medicare so that it can start just as your COBRA benefits end. No matter what route you choose, it’s good to stay informed so that you don’t end up having to go without much-need health insurance coverage.

Medicare: An Update on a Dying System

Posted in Health Insurance , Medicare

November 20th, 2009
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Millions of seniors are dependent on the Medicare system every year. According to 2008 stats from Medscape Today, nearly 45 million seniors ages 65 and older are enrolled in Medicare programs. However, since this number is expected increase significantly with the millions of Baby Boomers set to reach retirement age by 2030 – and the system is running out of money – it becomes anything but a secret that today’s Medicare system is indeed troubled, if not dying.

Medicare’s Financial Woes

Medicare has been running into financial troubles over the past years, partially due to the rising costs of health care (see recent data on the estimated growth of health care spending from 2008 to 2018). In essence, the plan is running out of money – and fast. In fact, Treasury Secretary Timothy Geithner has projected that Medicare Part A (the original Medicare program), which is funded by payroll taxes, will be drained of funds by 2017. And while the other programs are mostly funded by beneficiary premiums, they are partially funded by government general revenue, which has suffered since the economic crisis.

The cost to pay for each Medicare enrollee is astronomical. On average, $10,000 is spent on each enrollee in the Medicare system per year, which totals $500 billion annually. Of course, it doesn’t help that Medicare fraud is on the rise. In late Oct. 2009, CBS’ 60 Minutes discovered that nearly $60 billion a year is lost in Medicare fraud. While officials are cracking down on fraud for both Medicare and Medicaid, doing so isn’t likely to save the systems single-handedly.

But the problems get bigger.

According to a 2008 report released by the Institute of Medicine, by the year 2030, all of the Baby Boomers will have reached retirement age – all 78 million of them – which is nearly double the current number of seniors over 65. Clearly, this increased number contributes to the bankruptcy predicted to take place 13 years prior.

Problems for Medicare Beneficiaries

Unfortunately, the problems in Medicare don’t stop with financial troubles within the system. Beneficiaries have also suffered from what they once thought was a low-cost alternative to private insurance and instead discovered it was a costly plan requiring thousands in out-of-pocket costs for co-pays, deductibles, prescriptions and more each year.

Recent data distributed by Fidelity Investments revealed that the average 65-year-old should expect to pay $6,631 annually in health care expenses with their Medicare. The Part D program alone can require seniors to pay nearly $3,500 while in the “donut hole.” With so many beneficiaries surviving on extremely low incomes (nearly half of all people on Medicare are have incomes 200% below poverty – $20,800 for individuals and $28,000 for couples), dangerous behaviors like splitting pills and forgoing medication have become commonplace.

But Part D isn’t the only problematic Medicare program. Recently, nearly 660,000 Medicare Advantage Private Fee for Service (PFFS) recipients were dropped by their insurance companies due to new, stricter federal requirements (see story: Medicare Plans are Being Dropped).

Medicare Isn’t a Bad Program

From what you’re reading, you may wonder why people enroll in Medicare at all. The fact is, the system has been around for many years and has been successful in fulfilling senior health care needs, including allowing them to visit doctors, receive hospital care and obtain much-needed prescription drugs at a 75% or more discount. For those who are enrolled in Medicare Advantage, there’s an even greater benefit of being able to work with chosen HMOs, PPOs or private fee-for-service plans to receive necessary care.

Overall, costs associated with Medicare are much lower than what would be spent either with a private insurer, or out-of-pocket by using retirement savings. But according to research from the Employee Benefit Research Institute, a new retire in 2016 will need more than $200,000 to cover their retirement medical costs with Medicare. So with many seniors struggling to make their Social Security checks work for them, and health care costs growing 2.5% faster than the economy, what was intended to be a great program is only barely keeping up with the aging population.

Keeping the Program Going

Ways to keep Medicare afloat is an ongoing discussion among experts. While there is no consensus as to what will help the most, here is a roundup of a few solutions:

• Spread the costs: Medicare has already shifted some expenses to capable beneficiaries by adding a premium-adjusted means test to Medicare Part B premiums. This test requires those making over a certain amount ($85,000 for individuals, $170,000 for couples in 2009) to pay more than the $96.40 monthly premium.
• Crack down on fraud: As mentioned previously, nearly $60 billion in the Medicare system is lost to fraud each year. Until this issue is resolved, fraud may continue to be a problem.
• Cut payments: President Obama has recently proposed cutting payments to Medicare Advantage insurers and reducing reimbursements to hospitals to keep the program alive. However, many experts still suggest that the system will need new money to survive and thrive.
• Decrease utilization: Some have suggested decreasing the number of seniors qualified to enroll in Medicare, for instance, by changing the eligibility age to 70 instead of 65.

Decreasing benefits has also been suggested to save money; however, this idea, along with changing the eligibility age, is likely to be opposed strongly by retiree advocates.

What You Can Do in the Meantime

For those seniors already in the Medicare system, it seems that playing the “waiting game” as the government comes up with solutions is priority number one. However, those who have yet to reach retirement age are encouraged to participate in a health savings account (HSA) that functions like a 401k plans for health care costs.

These accounts were created by the Medicare bill signed by President Bush in 2003 and help individuals save for their future qualified medical and retiree health expenses on a tax-free basis. What’s great about these accounts is that if you discover you don’t need the funds down the line, you could use them like an ordinary retirement account. Also, HSAs are easy to open at your local bank.

Nowadays, dependence on government assistance like Medicare can unpredictable, which is why learning how it could affect you in the future is a good idea. By getting a grip on what to expect, you can begin making the right decisions for your future because the last thing you want is to have your health deteriorate as you wait for changes to be made to a system that may in fact be deteriorating as well.

Lawmakers Crack Down on Medicare / Medicaid Fraud to Help Fund Health Care

Posted in Health Insurance , Medicaid , Medicare

November 2nd, 2009
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Senate members are in a mad scramble for cash to finance the health care overhaul, leaving them to look the money they lose every year to Medicare and Medicaid fraud. According to Senate Judiciary Committee Chairman, Patrick Leahy (D-Vt.), cracking down on this type of fraud could help reduce the skyrocketing cost of health care.

Antifraud Efforts in Health Care Legislation

The new health-overhaul legislation that’s moving through Congress has provisions in it to help reduce fraud. The U.S. government is said to lose between $60 billion and $2 trillion to health-care fraud every year. Medicare and Medicaid programs are especially susceptible.

Why So Much Fraud?

U.S. officials are having a difficult time determining why fraud is so high with these two programs; however, they suspect it may have something to do with the guidelines for filing a claim. For each file claimed, payment has to be made in 14 to 30 days. With Medicare only receiving upwards of 4.4 million claims each day, only 3 percent are reviewed. As a result, more than $10 billion was improperly paid in claims in the fiscal year ending Sept. 30, 2008.

Officials note that cracking down on fraud now is especially important, not just to fund the health overhaul, but to also set the right standard for the public-insurance program lawmakers are pushing for. Being able to slow down fraud could add millions to the health overhaul and possibly reduce responsibility additional to taxpayers substantially.