CHA Blog

Last week Julie Schoen, our California Senior Medicare Patrol (SMP) Project Director, spoke on Medicare fraud on a statewide press teleconference hosted by California’s Department of Managed Health Care (DMHC). Both agencies, DMHC and SMP, are committed to protecting beneficiairies from the sometimes malicious and fraudulent practices of a few insurance agents. While most agents may be trustworthy, DMHC has reports of several who are trying to persuade seniors to switch from their current health plan to the Medicare Advantage (MA) plan they are selling even though it is not in their best interest, and sometimes even without their consent.

DMHC put together a helpful 2-page consumer alert (PDF) that summarizes 7 red flags to watch out for when being approached by an insurance agent, and 10 actions to take before signing up for any new health plan.

See Medicare Fraud for more info on fraud. Also see Medicare’s Fall Open Enrollment to learn about your rights to switch MA and Part D plans or return to Original Medicare during Oct 15 through Dec 7.

Medicare’s Fall Open Enrollment, officially known as the Annual Enrollment Period (AEP) starts and ends earlier now. From October 15 – December 7, beneficiaries can change their Medicare health plan and Part D coverage and/or return to Original Medicare. Coverage changes become effective January 1, 2012.

Learn more about the AEP and other enrollment periods. Beneficiaries can also contact their local Health Insurance Counseling and Advocacy Program (HICAP) for free counseling and information on their health care options in their area.

Almost 151,000 beneficiaries in California are in a Medicare Advantage plan that is pulling out of Medicare in 2012. This means these plans are not renewing their Medicare contracts, their plans are terminating by the end of the year, and beneficiaries enrolled in these plans need to choose a new coverage option for 2012. With a total of 301,912 beneficiaries nationwide affected by such terminations, 50% are in California.  Anthem Blue Cross is the reason for this high percentage of affected benefciaries. They decided not to renew two regional PPO plans, the Freedom Blue plans, which have 113,709 enrollees or 75% of affected beneficiaries statewide.

Anthem Blue’s explanation for not renewing these popular regional PPO plans is “to ensure that we manage our operational and financial stability so that we can continue to support our member’s needs today and in the future.”  Other Medicare Advantage plans that are not renewing account for the remaining 25% of affected beneficiaries.  Some of these plans may be terminating because of low enrollment.

What can beneficiaries in this situation do?

Beneficiaries who are affected by these non-renewals should have received a notice from their plan on or before Oct 2nd informing them about their upcoming termination and that they have a Special Election Period (SEP) to join another plan.  They also have the option to return to Original Medicare, enroll in a stand-alone Part D prescription drug plan, and use a Guaranteed Issue right to purchase a Medigap policy without a health screening, a form of Medicare supplemental insurance. See When MA Plans Terminate for more info.

Beneficiaries who want to use their SEP to join another Medicare health plan may or may not have many plan options to choose from depending on which county they live in. Generally, beneficiaries in southern California have many Medicare Advantage plan options, especially HMOs, whereas beneficiaries in northern California have fewer Medicare Advantage plan options.  In urban areas in northern California, some counties have a few HMO plans, and in rural areas, some counties have private fee-for-service (PFFS) plans only.

Although there are no counties without any Medicare Advantage plan options, a few counties have options that are not affordable or suitable.  For example, four counties – Marin, Nevada, Sutter and Yuba – each have only one Medicare Advantage plan in 2012, and the premiums of these plans range from $79.60 to $99, much higher than the current Freedom Blue PPO which has a $0 premium.  Another example is Santa Cruz county which will have two Medicare Advantage plans next year, but the premiums are high: one HMO with prescription drug coverage at $192 and one HMO without prescription drug coverage at $89. Beneficiaries who want a Medicare Advantage plan and prescription drug coverage have to choose the HMO with prescription drug coverage because of a rule that a beneficiary cannot combine an HMO with a stand-alone Part D plan.

Three counties – San Benito, Tehema and Tuolumne – illustrate another problem. Each county has only a private fee-for-service plan; they have no local HMO or PPO plans.  Many doctors do not accept the payment terms and conditions of these private fee-for-service plans.  Thus a private fee-for-service plan enrollee may have coverage but no access to his or her doctor.

Sponsors of plans that are not renewing are trying to get affected beneficiaries to enroll in the sponsor’s other plans, such as other MA plans or stand-alone Part D plans.  Anthem Blue, for instance, is offering local PPO plans in 13 counties and three Part D plans statewide.  Insurance companies that sell Medigap policies, including some sponsors of Medicare Advantage plans, are also targeting affected beneficiaries since these beneficiaries have a guaranteed issue right to buy a Medigap policy.  Beneficiaries should look at all their options and not just the plans offered by one sponsor.  To find out about their options, beneficiaries’ best bet is to contact their local HICAP (Health Insurance Counseling & Advocacy Program) at 1-800-434-0222.  Local HICAPs provide objective Medicare benefits counseling at no cost, such as helping a beneficiary compare the difference between Medicare Advantage plans and Medigap, or finding and comparing Part D prescription drug plans.

All Medicare beneficiaries can make changes involving a Medicare Advantage or Part D plan during the Annual Election Period, also called Fall Open Enrollment, which is earlier this year, from October 15 to December 7.  A beneficiary who is in a non-renewing plan also has a Special Election Period from Dec 8 to Feb 29, which gives them more time to make a change.

See our website for more information on the AEP and your rights if your Medicare health plan is terminating coverage.