2019 Medicare, what’s new? BHINI Spring Meeting

Scottsdale, AZ

Medicare topics for consideration • MACRA – Medicare Access and CHIP Reauthorization Act

• “The Doc Fix” • Plans F & C are changing 12-31-19

• The new OEP (Jan-Mar) • Avoid compliance issues • Build sales

• New saving strategy for Medicare Beneficiaries subject to IRMAA using Social Security Form 44

• Commission “gotchas” to watch for • Group Health and Medicare Coordination

MACRA – Medicare Access and CHIP Reauthorization Act

MACRA's primary provisions are:[1] • changes to the way Medicare doctors are reimbursed • increased funding • extension to the Children's Health Insurance Program (CHIP)

Bye-bye Fee for Service?

• MACRA replaces the current Medicare reimbursement schedule with a new “pay-for-performance” program that’s focused on quality, value, and accountability

• The Centers for Medicare and Medicaid Services (CMS) stated that MACRA enacts a new payment framework that rewards health care providers for giving better care instead of more service

“The Doc Fix”

• Changes to the way physicians are reimbursed • CMS is set to transition from a fee for service (FFS) system that

allowed physicians and providers to bill Medicare and Medicaid for services they provided to their patients, to a pay for performance based system using:

• Merit Based Incentive Programs • Alternative Payment Model (APM) • Accountable Care Organizations (ACO)

Source: https://en.wikipedia.org/wiki/Medicare_Access_and_CHIP_Reauthorization_Act_of_2015

Merit Based incentive Programs

• MACRA combines parts of: • The Physician Quality Reporting System (PQRS) • Value-based Payment Modifier (VBM) • And the Medicare Electronic Health Record (EHR) incentive program

• Into one single program called the Merit-based Incentive Payment System, or “MIPS”

Source: https://www.practicefusion.com/blog/what-is-macra-and-mips/

Merit Based Incentive Programs (MIP)

• The new model will now require the provider to provide information on:

• The quality of service being given • How valuable it is to the patient • And accountability that provider has to the treatment being

performed

Electronic Health Records and MACRA

• The Government Accountability Office in partnership with DHHS: • Is set to assist in the implementation of nationwide electronic health records

(EHRs) • While simultaneously comparing and recommending such programs for

providers • The EHR goal is set for December 31, 2018 under MACRA

MACRA and the Med Sup Market Will Plan F really go away? Will Plan G become the new, most popular plan?

Two Med Sup Markets as of 1-1-20

• Newly Eligible (NE) • Non Newly Eligible (NNE) • This is terminology from the regulatory language that specifies

eligibility to purchase Plan F (or Plan C)

Two Med Sup Markets as of 1-1-20

• The NE market will consist of individuals who reach the age of 65 on January 1, 2020, and later

• Over time, this market will have an increasing maximum age and a minimum age of 65

• The NNE market will consist of individuals who reach the age of 65

before January 1, 2020 • Over time, will have an increasing minimum age but no maximum age

Loss Ratio after 1-1-20

• Policies issued in 2020 and later should initially exhibit a loss ratio as much as 1.0% - 2.5% lower than would otherwise be the case

• The reason is that exposure to the non-medically underwritten higher loss ratio open enrollees will shift from Plan F to Plan G

• Therefore, the higher loss ratio business has lower exposure and the overall loss ratio is lower all else being equal

• This loss ratio improvement will likely last for a few years and then reverse with portfolio loss ratios realizing a steady increase in future years as Plan G exposure overtakes Plan F

Plan F

• Plan F sales, which will only be available to the NNE market, will consist of a greater portion of healthier underwritten business than under the current environment

• Plan F will still be available to NNE individuals under guarantee issue provisions

Plan G

• Plan G will likely comprise a greater portion of higher cost/utilization open enrollment and guarantee issue business from the NE market

• As the NE market grows and the NNE market shrinks over time, the relative mix of Plan F and Plan G will shift and the market will be more reflective of Plan G experience

Plan F vs. Plan G Loss Ratio After 1-1-20

• Initially, the favorable underwritten Plan F experience issued at higher rate levels could offset the negative Plan G experience (due to guarantee issue)

• As time goes by and Plan G becomes an even greater portion of the market, this relatively unfavorable experience will overcome the positive Plan F experience unless corrective action is taken

• The aggregate impact may remain positive for numerous years

Plan F – worth keeping?

• Until such time future Plan G sales significantly outpace Plan F sales, these results could continue for several years

• However, if there is a complete shift immediately to Plan G regardless of the availability of Plan F, then experience will be worse immediately under MACRA enactment than without MACRA enactment

What market opportunities are available both before and after 2020? • Will Plan G sales increase as new carriers enter the market with a

focus on Plan G? • Or will consumer education and agent/broker influence result in a

“run” on Plan F sales to a greater degree than exists even today? • At what point will the market anticipate the impact of MACRA and

narrow the F/G gap in pricing?

Open Enrollment Period (OEP) Avoid compliance issues. Build sales.

Hello Again to the OEP

• Allows certain Medicare related products to be changed • Everything but Part D to Part D products may be changed

• Timeframe: January 1 – March 31

FAQs about the OEP

Question: During OEP, can agents inform their clients that they have the ability to make a plan choice if they are not satisfied? Answer: Only if the beneficiary indicates dissatisfaction with the plan they’ve selected, the agent can discuss all applicable election periods with the consumer (SEP, OEP, etc).

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

FAQs about the OEP

Question: I was unable to reach some of my existing MAPD clients during AEP. May I contact them to discuss their options during OEP? Answer: No. You may not market the ability to make a plan change during OEP. However, if someone contacts you expressing dissatisfaction with their current plan, you may then discuss their election period options (SEP, OEP, etc).

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

FAQs about the OEP

Question: What does an agent need to do during OEP to demonstrate that he/she is marketing a special election period (at informal events, for example) rather than marketing the OEP? Answer: The agent would need to be clear at the onset of the event that the purpose is to market Medicare plans to those who may qualify through an SEP. The content presented at the event would need to be reviewed and approved by Humana, and should not focus primarily or exclusively on the OEP.

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

FAQs about the OEP

Question: Can we still conduct informal marketing events during OEP? What about table events at retailers or other local venues? Answer: Yes, but the agents can only discuss election periods with the consumer (SEP, OEP, etc.) if the consumer is asking about their plan change options. Agents can also continue to staff retail locations as long as they are not advertising or asking/approaching individuals about the OEP.

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

FAQs about the OEP

Question: Can a doctor’s practice communicate with patients reminding them of the OEP? Answer: A provider’s marketing of the OEP would likely be considered prohibited. Providers should consult with their own legal and compliance team regarding any activities to ensure compliance with CMS and OIG guidelines and any other applicable laws and regulations.

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

FAQs about the OEP

Question: If we are working at a kiosk such as at a Flea Market and someone stops to talk, are we able to discuss the OEP? Or, must we wait for them to ask about changing? Answer: Only if the beneficiary indicates dissatisfaction with the plan they’ve selected, then the agent can discuss all applicable election periods with the consumer (SEP, OEP, etc.).

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

FAQs about the OEP

Question: If a client on a Medicare Advantage plan did not make a plan change during AEP, can they make a change during OEP? Answer: Yes, individuals enrolled in MA plans as of January 1, or new Medicare beneficiaries who are enrolled in an MA plan during their ICEP who are not satisfied with their current Medicare Advantage plan can use the OEP to make a change.

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

FAQs about the OEP

Question: Could agents wear a button that said something like “Ask me about OEP” or “OEP?” Answer: No. The agent could, however, have a button that says Ask me about Medicare Plans.

https://ignitewithhumana.com/docs/2019_Humana_Agent_OEP_FAQs.pdf

Social Security Form 44 Reduce the Income Related Monthly Adjustment Amounts (IRMAA)

Part B IRMAA

2019 Part B Income Related Monthly Adjustment Amounts Based on your 2017 income tax return, Modified Adjusted Gross Income (MAGI)

INDIVIDUAL TAX RETURN JOINT TAX RETURN 2019 Part B Premium, Per Person

Less than or equal to $85,000 Less than or equal to $170,000 $135.50

Between $85,000 - $107,000 Between $170,000 - $214,000 $189.60

Between $107,000 - $133,500 Between $214,000 - $267,000 $270.90

Between $133,500 - $160,000 Between $267,000 - $320,000 $352.20

Between $160,000 - $500,000 Between $320,000 - $750,000 $433.40

Greater than $500,000 Greater than $750,000 $460.50

Part D IRMAA

2019 Part D Income Related Monthly Adjustment Amounts Based on your 2017 income tax return, Modified Adjusted Gross Income (MAGI)

INDIVIDUAL TAX RETURN JOINT TAX RETURN 2019 Part D Extra Premium, Per Person

Less than or equal to $85,000 Less than or equal to $170,000 None

Between $85,000 - $107,000 Between $170,000 - $214,000 $12.40

Between $107,000 - $133,500 Between $214,000 - $267,000 $31.90

Between $133,500 - $160,000 Between $267,000 - $320,000 $51.40

Between $160,000 - $500,000 Between $320,000 - $750,000 $70.90

Greater than $500,000 Greater than $750,000 $77.40

Commission “gotchas” to watch for

• Part B deductible amount is reduced from the total annual premium, and then the commission is calculated

• Commissions are calculated on the initial premium, not on rate increases

• Guarantee Issue policies may be reduced down to either a flat, one time fee (like $25) or a drastically reduced percentage (like 2% or less)

Group Health Insurance or Medicare?

• TEFRA: Groups of 19 or fewer, Medicare is primary • Groups with fewer than 20 lives: do you recommend an actively at

work person, eligible for Medicare, enroll in Part A and Part B (which could cost as much as $460.50 per month)?

• Does the group health plan require them to take Part B? • Will they pay more or less than the group health plan? • Will the out of pocket be more or less with Medicare? • Will their providers see them as a Medicare patient?

• Health Savings Accounts – once a person enrolls in Part A, they may no longer contribute to their HSA. How might this impact a highly compensated Business Owner that wants to contribute to an HSA through age 70?

Technology and Medicare

• www.Medicare.gov – use to generate Part C and D plan comparisons • Connecture • CSG Actuarial online services

Round Table Discussion: 2019 Medicare, what’s new?

BHINI Spring Meeting - Scottsdale, AZ