CHA Blog

A newly released report from the U.S. Government Accountability Office (GAO) examines: 1) some of the effects that inappropriate marketing of MA plans have had on beneficiaries; 2) ways the Centers for Medicare and Medicaid Services (CMS) is assisting these affected beneficiaries; and 3) some of the limitations of this help due to insufficient data collection.

Below is an excerpt of the report’s highlights. For the full report, see: Medicare Advantage: CMS Assists Beneficiaries Affected by Inappropriate Marketing but Has Limited Data on Scope of Issue (GAO-10-36).

Highlights on what the GAO found:

CMS took compliance and enforcement actions for inappropriate marketing against at least 73 organizations that sponsored MA plans from January 2006 through February 2009. While the number of MA organizations varied during that time period, 192 MA organizations offered MA plans as of March 2009. Actions taken ranged from initial notices of noncompliance and warning letters to more punitive measures, such as civil money penalties and suspensions of marketing and enrollment. Nineteen of the 73 MA organizations had multiple types of actions taken against them.

CMS helped beneficiaries who experienced inappropriate marketing by providing special election periods (SEP) through which beneficiaries could disenroll from their MA plan and enroll in new coverage without waiting for the twice yearly regular enrollment periods. However, some beneficiaries experienced financial or access-to-care problems as a result of inappropriate marketing that could not be addressed by a SEP.

Financial hardships occurred, for example, when beneficiaries disenrolled from their MA plans and the withholding of premiums from Social Security for their former MA plan was not stopped promptly. In other cases, beneficiaries did not realize they had been enrolled in an MA plan until they tried to access services. Some of these beneficiaries experienced disruption of their access to providers and medications because their providers did not participate in the MA plan.

CMS has limited information about the number of beneficiaries who experienced inappropriate marketing. Some beneficiaries who experienced inappropriate marketing may have exercised their option to disenroll from their MA plans during regular enrollment periods and might not have notified CMS of the marketing problems they encountered. For example, about 21 percent of beneficiaries disenrolled during the regular enrollment periods in 2007 from one type of MA plan that CMS officials acknowledged had a high incidence of inappropriate marketing. However, CMS discontinued a survey after 2005 that collected information on reasons for disenrollment and could have provided important information about the extent to which the disenrollments were the result of inappropriate marketing. CMS officials said that they plan to reinstitute a survey on disenrollment reasons in late summer 2010.

CMS also has limited information about the number of beneficiaries who experienced inappropriate marketing because it did not directly track the number of SEP disenrollments. CMS did estimate the number of SEPs it provided for inappropriate marketing, but its estimates were based on data that were unreliable.

The CLASS Act is part of the legislative legacy of Senator Ted Kennedy, is an important legislative piece for planning for the long-term care needs of our country and is included in both the Senate and the House versions of health care reform.

Bonnie Burns posted this summary of the CLASS Act — it gives a broad overview of the major provisions of the Act, with notations where the Senate and House versions differed as of its writing on January 15, 2010.

The Administration on Aging (AoA) recently published a report giving a detailed profile of older Americans in 2009. The data is compiled from the U.S. Bureau of the Census, the National Center on Health Statistics, and the Bureau of Labor Statistics. Below are some highlights.

• The older population (65+) numbered 38.9 million in 2008, an increase of 4.5 million or 13.0% since 1998.
• The number of Americans aged 45-64 – who will reach 65 over the next 2 decades – increased by 31% during this decade.
• Over 1 in every 8, or 12.8%, of the population is an older American.
• Persons reaching age 65 have an average life expectancy of an additional 18.6 years (19.8 years for females and 17.1 years for males).
• Older women outnumber older men at 22.4 million older women to 16.5 million older men.
• In 2008, 19.6% of persons 65+ were minorities–8.3% were African-Americans.** Persons of Hispanic origin (who may be of any race) represented 6.8% of the older population. About 3.4% were Asian or Pacific Islander,** and less than 1% were American Indian or Native Alaskan.** In addition, 0.6% of persons 65+ identified themselves as being of two or more races.
• Older men were much more likely to be married than older women–72% of men vs. 42% of women (Figure 2). 42% older women in 2002 were widows.
• About 31% (11.2 million) of noninstitutionalized older persons live alone (8.3 million women, 2.9 million men).
• Half of older women (50%) age 75+ live alone.
• About 471,000 grandparents aged 65 or more had the primary responsibility for their grandchildren who lived with them.
• The population 65 and over will increase from 35 million in 2000 to 40 million in 2010 (a 15% increase) and then to 55 million in 2020 (a 36% increase for that decade).
• The 85+ population is projected to increase from 4.2 million in 2000 to 5.7 million in 2010 (a 36% increase) and then to 6.6 million in 2020 (a 15% increase for that decade).
• Minority populations are projected to increase from 5.7 million in 2000 (16.3% of the elderly population) to 8.0 million in 2010 (20.1% of the elderly) and then to 12.9 million in 2020 (23.6% of the elderly).
• The median income of older persons in 2008 was $25,503 for males and $14,559 for females. Median money income (after adjusting for inflation) of all households headed by older people did not change in a statistically different amount from 2007 to 2008. Households containing families headed by persons 65+ reported a median income in 2008 of $44,188.
• Major sources of income for older people in 2007 were: Social Security (reported by 87% of older persons), income from assets (reported by 52%), private pensions (reported by 28%), government employee pensions (reported by 13%), and earnings (reported by 25%).
• Social Security constituted 90% or more of the income received by 35% of all Social Security beneficiaries (21% of married couples and 44% of non-married beneficiaries).
• About 3.7 million elderly persons (9.7%) were below the poverty level in 2008 which is not statistically different from the poverty rate in 2007 (9.7%).
• About 11% (3.7 million) of older Medicare enrollees received personal care from a paid or unpaid source in 1999.

The full report will be posted on the AoA’s website soon.

The number of reported hospital errors increased across California during the last year, according to data from the state Department of Public Health.

While a 2006 state law requires officials to publicly report hospital errors, California’s DPH has not yet reported the information to the state Legislature.

California hospitals reported 1,538 serious and preventable events for fiscal year 2008-2009, up from last year’s reported 1,224 errors. About 90% of the reported errors are currently under investigation, according to a recent article from the Sacramento Business Journal, 1/8.

Health insurers and hospitals are working to reduce the incidence of preventable medical errors through new policies and procedures. Medicare has also chosen not to pay for preventable medical errors, and many major health insurance companies are following suit.

In addition, hospitals are enacting new safety protocols in an effort to prevent such events. One system gaining more attention from lawmakers stems from a unique and successful strategy used in Pittsburgh to improve the quality, safety, efficiency and cost of hospitals in the area. The system took its ideas from one of the most efficient companies, Toyota. While this approach, modeling after an industry, may seem a bit strange and impersonal, hospital after hospital in the Pittsburgh area saw and sustained dramatic improvements. This approach is now being considered for other hospitals throughout the country. To learn more, see the book, The Pittsburgh Way to Efficient Health Care.

Here’s a chart that outlines the types and numbers of medical errors in California last year.

In late December, President Obama signed H.R. 3326, a defense appropriations bill with a provision that extends the COBRA subsidy to involuntarily terminated workers until Feb. 28, 2010.

The subsidy, originally from the American Recovery and Reinvestment Act (ARRA) passed in February 2009, was for people who involuntarily lost their jobs between September 2008 through December 31, 2009 and would last a period of 9 months. This bill extends the timeframe for people to qualify for the COBRA subsidy another 2 months and extends the amount of time people can receive the subsidy to 15 months.

As mentioned in our earlier article, COBRA, the Consolidated Omnibus Budget Reconciliation Act passed in 1985, allows involuntarily laid-off workers to continue their health coverage for 18-36 months by assuming the premium payments formerly paid by their employers. As these health premiums are extremely expensive, the federal subsidy pays for 65% of a qualifying person’s COBRA premium, making this insurance much more affordable.

In addition to extending the eligibility period and the duration of subsidy benefits, the H.R. 3326 COBRA subsidy extension provision makes a number of subtler changes in the subsidy program rules. The provision will:

• Require a special notice describing the new subsidy provisions to go out to all “assistance eligible individuals” (AEIs) who have been on COBRA on or after Nov. 1, 2009, or whose qualifying event is an “involuntary termination” of employment occurring on or after Nov. 1, 2009.
• Allow for a 60-day period for the retroactive payment of premiums for “assistance eligible individuals” whose subsidy period expired Nov. 30 and who failed to pay their premium for December coverage.
• Let employees who are involuntarily terminated before Feb. 28, 2010, but get COBRA coverage that starts after Feb. 28, 2010, qualify for the subsidy.

Employers and their benefits advisors will have to move quickly to comply with this legislation. The new statute requires employers to send extension letters within 90 days of enactment.

The U.S. Department of Labor, the U.S. Department of Health and Human Services, and the Internal Revenue Service may all issue guidance concerning the subsidy extension.

Update on California’s Cal-COBRA

While the federal COBRA subsidy only applies to businesses with at least 20 employees, last year California lawmakers passed AB 23, a measure that expanded the state’s Cal-COBRA program to employers with 2 to 19 workers.

Lawmakers wrote AB 23 to align with the federal subsidy’s initial expiration date of Dec. 31, 2009, but the state likely will lengthen the Cal-COBRA program to conform with the recent federal extension.

Gov. Arnold Schwarzenegger’s administration doesn’t think additional legislation will be necessary to extend AB 23; the Assembly Health Committee will examine the issue.

For more details on H.R. 3326, see the summary and full text.

See our COBRA and Cal-COBRA sections for general information.