managed care in the senior market
DESCRIPTION
Managed Care in the Senior Market. Herb Haigh, President 2536 Countryside Blvd Clearwater, FL 33763 800-940-7587 www.medicareselect.com. Overview. Medicare Program Medicare Market Senior Population Managed Care Plans HMO (Now Medicare Advantage) Traditional Supplements Medicare Select - PowerPoint PPT PresentationTRANSCRIPT
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Managed Carein the Senior Market
Herb Haigh, President2536 Countryside Blvd
Clearwater, FL 33763800-940-7587
www.medicareselect.com
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Medicare Program Medicare Market Senior Population Managed Care Plans
HMO (Now Medicare Advantage) Traditional Supplements Medicare Select
Distribution “DIMA” – the new legislation
Overview
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Ameri-Plus
National network of participating hospitals Since 1990
500 hospitals 23 states
One out of every 18 seniors who have a Medicare Supplement is a policyholder with one of the ten Insurance Companies Ameri-Plus represents
Exclusive agreement with the largest independently owned Senior Healthcare Organization in the United States
Ameri-Plus Medicare Select policies are the fastest growing segment in the Medicare Supplemental market.
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The greatest gap in our social security structure is the lack of adequate provision for the Nation's health. We are rightly proud of the high standards of medical care we know how to provide in the United States. The fact is, however, that most of our people cannot afford to pay for the care they need.
In 1945 President Truman Proposed a National Health Program
I have often and strongly urged that this condition demands a national health program. The heart of the program must be a national system of payment for medical care based on well-tried insurance principles. This great Nation cannot afford to allow its citizens to suffer needlessly from the lack of proper medical care.
national health program
The greatest gap in our social security structure is the lack of adequate provision for the Nation’s health.
Source: CMS; CMS/HCFA History; www.cms.gov
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President Johnson Enacted the Medicare/Medicaid Bill 20 Years After Truman’s Proposal
July 30, 1965, President Johnson signs Medicare and Medicaid into law.
Source: CMS; CMS/HCFA History; http://cms.hhs.gov/about/history
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Medicare’s Milestones:Legislative History 1945-2003
1965: Medicare enacted – covers only the elderly
1972: Coverage
expanded to include under-
65 disabled and ESRD
populations
1983: Prospective
Payment System (PPS) for inpatient
hospital services adopted
1989: Prospective
payment extended to
physician services
through use of Resource-
Based Relative
Value Scale
1999-2000: Balanced Budget
Refinement Act (BBRA)
and Benefits Improvement and Protection
Act (BIPA) passed
1997: Balanced Budget
Act (BBA) passed – Medicare+Choice created
1982: Medicare risk
contracts with HMOs authorized
1945: Proposed
as a National Health Plan by
President Truman
1965
19801975 1985 1990 1995 20001970
1945
1993: Medicare SELECT
Approved as a
permanent Supplemen
tal Medicare Insurance
Plan alternative
1992: Congress
created 10 standardized plans. From no-frills: “A” to top-of-the-
line: “J”
2003
2003: Medicare
Prescription Drug
Improvement and
Modernization Act (DIMA)
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Health Insurance Program for: People age 65 or older Some people with disabilities under age
65 People with End-Stage Renal Disease
Medicare Facts
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Medicare Benefits
Part AHospital Insurance
Most people do not pay for Part A Insurance
Part BMedical Insurance
Most People Pay $66.60/month in
2004 Taken out of Social
Security Payment
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Medicare Pays: Inpatient Hospital
Care Critical Access
Hospitals Skilled Nursing
Facilities Some Home Care
(PT, DME,Skilled Nursing, etc)
Individual Pays:Hospital Stays
$876 deductible Days 1-60 $219 per day Days 61-90 (60 Reserve Days Lifetime) $438 per day Days 91-150 100% of all costs Days 151+
Skilled Nursing $109.50 per day Days 21-100
through each benefit period
Part A -Hospital Insurance-
2004 Medicare Costs
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Part B -Medical Insurance-
Medicare Pays: Medical &
Professional Clinical Lab Some Home Health Outpatient Hospital
Individual Pays: $100 Deductible 20% Coinsurance
for Medical Services
20% or Fixed Copay for Outpatient Hospital
50% Coinsurance for Mental Health
2004 Medicare Costs
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Medicare Does Not Pay For
Acupuncture Dental Cosmetic Surgery Custodial Care Hearing Aids
Orthopedic Shoes Outpatient
Prescriptions Routine Foot Care Routine Physicals Screening Tests
Seniors Need Additional Health Insurance
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The Number of Beneficiaries has Doubled Since Medicare’s 1965 Inception
Source: CMS, Office of the Actuary.
Med
icar
e E
nro
llmen
t (m
illio
ns)
20.4
28.434.3
39.645.9
49.7
61.0
76.8
19.1
0
10
20
30
40
50
60
70
80
1965 1970 1980 1990 2000 2010 2013 2020 2030
Calendar Year
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Source: U.S. Census Bureau, Census 2000
< 100,000 100,000 –
< 500,000 500,000 –< 1,000,000
1,000,000 –< 1,500,000
1,500,000 –< 2,000,000
2,000,000 –< 3,000,000 > 3,000,000
Senior Population
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Traditional Medicare Supplement
Medicare SELECT
Medicare Advantage Plans
Private Fee-for-Service
PPO Demonstration
Today’s Competition in the Marketplace
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Source: MedPAC analysis of 2000 Medicare Current Beneficiary Survey, Cost and Use File.
Employer Sponsored Insurance
32%Medicaid12%
M+C18%
Other2%
Medicare Supplement
27%
Medicare Only9%
2000 Survey
75% of Medicare Beneficiaries have insurance to supplement their Medicare
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MedPAC estimates that in 2002 11-17% of Medicare enrollees will be covered by Medicare FFS with no supplemental coverage.
Source: MedPAC; Health Insurance Choices for Beneficiaries, Report to the Congress: Medicare Payment Policy, March 2003, p. 206
Increase in FFS Enrollment
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Senior Income Wealth = Health
More than half of the Medicare Population has a household income under $28,000/year
The more money you have, the more likely you are to be healthy
Those who earn less than $28,000/year spend 14%-30% of their income on healthcare
Sources: Income: U.S. Census Bureau; 2000 CensusIncome spent on Healthcare: CMS, Office of the Actuary: data from the Bureau of Labor Statistics, Consumer Expenditure Survey, 1999-2000.
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Medicare+Choice Plans Attract the Poorer/Sicker Seniors
Source: Marsha Gold and Lori Achman, Average Out-of-Pocket Health Care Costs for Medicare+Choice Enrollees Increase 10 Percent in 2003, The Commonwealth Fund, August 2003
Out of Pocket Costs for Medicare+Choice Enrollees
$5,305
$2,696
$1,565
$4,783
$3,578
$2,823
$2,210
$1,842
$1,503$1,203
$2,432
$836$997
$1,430$1,194
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
1999 2000 2001 2002 2003
Poor Health
Fair Health
Good Health
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Annual Costs M+C & Supplement
Notes: Supplemental average annual rates are based on average costs of all Plans (A-J) for a 65 year old female. M+C results are weighted by plan enrollment. Costs include Part B premium, M+C premium, co-pays, and drugs not covered.
Source: Supplemental costs: Weiss RatingsM+C costs: Mathematica Policy Research analysis of Medicare Compare using HealthMetrix Research’s Medicare HMO Cost Share Report Methodology
Annual Out of Pocket Spending & PremiumsM+C Vs. Traditional Supplement
0
500
1000
1500
2000
2500
1999 2000 2001 2002 2003Year
An
nu
al C
ost
of
Hea
lth
care
M+C
Supplement
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SOURCE: CMS
Medicare Approved Providers across the United States:
6,000 Hospitals
885,500 Physicians and Practitioners
Notes: These data are as of December 2001
Medicare Providers Availability
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Traditional Medicare Supplements
Understandable Predictable Available
Choice of Physician and Hospitals Guaranteed Renewable
- BUT - Prescription Coverage Expensive
Escalating Annual Premiums
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A BB*
CC*
D*
E FF*
F**
G*
H I J J** K L
Basic Benefits X X X X X X X X X X X
Skilled
Nursing
Co-Insurance
X X X X X X X X X
Part A
DeductibleX X X X X X X X X X
Part B
DeductibleX X X X
Part B Excess
(100%)X X X X X
Foreign
Travel
Emergency
X X X X X X X X X
At Home
RecoveryX X X X
Basic Drugs X X X
Preventive
CareX X
*Plans B, C, F, and G are also offered as Medicare Supplement SELECT Plans.
** Plans F and J also have an option called a high deductible Plan F and Plan J.
Standardized - Can Only Be Sold In These Plan Types
Traditional Supplements – Plans A-J
Under New Medicare Law, Plans H, I, and J will be deleted after 2006
New Plans K & L will be added (unknown benefits)
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HMO Plan Benefits
Company Pinellas County, FLHMO
Premium zero
Doctor visits (Co-pay) Primary
$12.00
Doctor visits (Co-pay) Specialist
$25.00
Drug Co-pay $15.00 for non-formulary generic: $500 annual limit; no
coverage for brand name
Hospital Stay 265/day for first 18 days in Hillsborough, Pinellas
$265/day for first 19 days in Hernando, Pasco
Maximum annual out of pocket:
4,800.00
Example of HMO Plan Benefits and Co-Pays
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Supplements vs. HMO/PPOunder DIMA
Must use their network of hospitals and physicians
Reduced out-of-area coverage
Controlled referrals Not guaranteed
renewable Usually co-pays and
deductibles – open ended payments
Retain Medicare card Choice of doctors and
hospitals Coverage extends
across USA No co-pays Guaranteed renewable Paperless automatic
claims One Annual Rate – you
know your yearly cost
HMO - PPO Supplement
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New Part D Benefit
Voluntary Medicare prescription benefit Available 2006
For Part D Benefit You Pay
Annual Premium $420 ($35 monthly)
Annual Deductible for prescription drugs
$250
Prescription drug coverage after deductible is satisfied
25% of the next $2,250 total
100% between $2,251 and $5,100
5% of all amounts greater than $5,100
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Part D Annual Expenses
Annual Prescription Costs
Cost with Part D Enrollment *
$250 $670
500 733
1,000 858
1,500 983
2,000 1,108
2,500 1,420
3,000 1,920
4,000 2,920
5,000 3,920
7,500 4,140
10,000 4,265
* Includes premiums, deductibles and co-paysSource: Money Magazine, Jan. 2004
The participant’s drug expenses must be greater than $810 per year for them to break even
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Private Prescription Drug Cards
There are two different types of cards available Medicare Approved Cards Private Issued Cards
There are 160 card choices The benefits & differences are as yet
undetermined
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Why are Supplemental Premiums Rising?
Source: Weiss Ratings, average annual supplemental premiums plans A-J
•Medicare is covering less, forcing Supplements to cover more•The fall of M+C plans have forced Supplements to accept open
enrollees
On the bright side, the rising cost of traditional supplements makeMedicare SELECT plans more appealing
$0
$500
$1,000
$1,500
$2,000
Av
era
ge
An
nu
al
Pre
miu
m
1999 2000 2001 2002 2003
Year
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Medicare Select
All the benefits of Traditional Medicare Supplements but COST LESS (15-20%)
Medicare Select Policyholders are not responsible for the Part A Deductible if: they receive care in a Network Hospital they receive emergency care in any Hospital
If the beneficiary does not choose a Network Hospital, they are responsible for the Medicare Part A Deductible ($876 in 2004)
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Exclusivity Increased Census Increased Out-patient Services Lower Bad Debt Shorter Length of Stay Marketing Opportunities Contribution to the Community
Why is Select A Win for the Hospital?
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Sales and Distribution
Products Require: Reliable distribution networks
Comprehensible Benefits Stability
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Developing an Independent Sales Force
Insurance Carriers and Agents Depend Upon:
Company Service Competitive Premiums
High Commissions Lead Generation
Product Persistency
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Developing an Independent Sales Force
Agents need three thingsLow Premiums
High CommissionsLeads
Forget the first two if we can offer the thirdLEADS!
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Carrier/Agent/Hospital Partnership
Insurance Carriers, Hospitals, and Agents work together as a marketing force that generates leads and sales
• Direct Mailingsoffer more information about the product and generate interest
• T.V. spots target Local Senior Market - puts your product in front of thousands
[Hospital] SELECT1-800-555-5555
For [Hospital] SELECT Information
call today
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Medicare Prescription Drug Improvement and Modernization Act
“DIMA”
The Medicare Managed Care – M+C (HMO) Plans are changing to “Medicare Advantage” Plans
It is yet to be determined how these plans will differ from current M+C Plans
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Facts about DIMA
Medicare Part A and Part B coverage have not changed
Beginning 2005 Medicare will cover several types of preventive check-ups Physical Exam Blood tests Diabetes screening
The Medicare Part D Prescription benefit is scheduled to begin in 2006
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Questions About Supplements in the Medicare Reform
How will new laws change my coverage? Protection you receive from your Supplemental
policy remains the same
How will laws change My Premium? Premiums will not be affected at all. Supplemental
benefits remain the same
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DIMA
This recent legislation has left most people with nothing but questions about the new “Medicare Advantage” programs
It remains to be determined whether the Medicare Advantage plans will differ from the HMOs of the past.
Until these plans are sorted out, all we can do is speculate as to the “reform” they bring to Medicare