Medicare D costs are going up fast

A flurry of recent studies on Medicare's Part D drug plan offerings suggest that the costs will rise more than the federal program's representatives have suggested, sometimes double or more than those estimates.

That has experts warning recipients to take a close look at costs and coverage before the enrollment closes on Dec. 31.

"They need to be looking at their premium costs," said Kim Sachse, an insurance coordinator for Take Care Home Health in Sarasota. "Most will see a doubling of their premiums if they're not looking."

Before enrollment opened, the official word from Medicare was that the drug plans, offered by private insurers, would have an average premium of about $28 per month, about $3, or 12 percent, more than last year.

But Avalere Health, a Washington-based consulting firm, said the typical Part D member would see a 24 percent increase, and that premiums in the 10 most popular Part D plans were increasing by more than 30 percent.

The National Senior Citizens Law Center analyzed Part D plans in every state and found seniors who qualified for low-income plans would have to scramble to avoid major price increases.

Seven of the eight no-premium plans available last year to low-income seniors disappear in 2009, although new offerings bring the total to five such plans. In all, they estimated that 115,000 Floridians would have to change plans to avoid paying a premium.

Similar changes abound in the 54 plans offered to all seniors regardless of income in Southwest Florida.

Last year, for example, Health Net Orange Option 1 had the lowest premium of any prescription drug plan: $12.10 per month. This year, the same plan's premium jumps to $29.70 per month.

Its annual deductible rises from $275 to $295.

More than premium matters

The changes come as one popular source of information -- free lunches from the insurers -- has ended. Federal regulators, concerned about deceptive or manipulative sales practices, ruled out free meals -- snacks are still permissible -- in one of many regulations taking effect this season.

That means that for people weighing Medicare drug and health plans, there literally is no more free lunch.

So choosing a Part D plan takes more uncoached knowledge than ever, experts said.

First is weighing the balance between the monthly premium and the annual deductible. But beneficiaries also should carefully look at what drugs the plans include, known as the formulary.

"They really should take a careful look at what's provided. It's not just the monthly premium that matters," said Dr. Scott Latimer, who oversees Medicare business in central and north Florida for insurer Humana.

Many seniors are still unaware the plans even exist, said Take Care's Sachse.

"It's out there and it's accessible and it's not being taken advantage of. They don't know and they don't sign up," she said. About 440,000 of 3.2 million eligible Floridians have not signed up, according to a study by the Healthcare Leadership Council.

One Take Care client saved $9,000 per year by moving to a Part D plan with coverage in the infamous "doughnut hole," where plans stop paying for medications after the beneficiary and insurer reach a combined $2,700 in payments for the year. The plans pick up after the beneficiary's out-of-pocket costs reach $4,350.

Other ways to help cover costs during the gap include Medicare's Extra Help program and Florida's Discount Drug Card.

Few changes in offerings

While the number of drug plans falls from 58 to 54 this year, the number of Medicare Advantage health plans rise from 61 to 66.

Experts say the plans have changed little from last year in terms of what they offer.

"What we've heard from seniors is, don't change things, we like what you're offering," Humana's Latimer said.

Providers know some people simply dislike change.

"Seniors prefer the peace of mind that comes with a consistent product," said Cindy Polich, chief strategy officer of UnitedHealth's Ovations division. UnitedHealth contracts with AARP to offer plans under that group's name.

But company to company, the plans vary widely in premiums, deductibles, copayments, services and prices.

They also may vary in which doctors are accessible.

Most Florida plans are health maintenance organizations or preferred provider organizations. HMOs limit people to a specific set of doctors; PPOs also use a doctor network but allow people to use other doctors, at an extra cost.

Experts say the first thing to look at is which doctors participate in the plan. "You're only as good as your provider list," said Michael Lay, an independent insurance agent in Sarasota who specializes in Medicare plans.

About 20 percent of all Medicare beneficiaries have signed up for Advantage plans. For some, it can save money and pay for useful services -- like annual physicals, which Medicare does not cover after the first year.

When Pat Keller visited her 92-year-old father in Englewood this year, she found him paying for a Medicare supplemental insurance plan that he rarely used.

Keller is not easily fazed. She teaches math and other subjects for a private tutoring company, but when she looked at the Medicare plans, she found it daunting -- too many of them, and too similar. "They're like apples," she said.

She consulted with Sachse at Take Care and chose a Medicare Advantage plan from Aetna that better suits her father, who rarely needs doctor visits. It saved him about $200 a month.

"He is in great health," she said. "I felt like we were being penalized for the fact that" -- she drops into a scary-movie voice -- "he might have to go to the hospital."

To keep their costs flat, and to placate critics, Medicare Advantage providers are emphasizing their plans' efforts to keep seniors healthy and out of the hospital. Humana touts its SilverSneakers program, which includes a fitness club membership and training with its Medicare Advantage and supplemental plans.

United's Polich outlined her company's tracking systems intended to keep complications from developing. For example, if a patient with high blood pressure has not gotten a prescription refill after an allotted time, the insurer contacts the patient's doctor with the information. People with multiple chronic conditions might be assigned a case manager.

The tracking system also watches for multiple emergency room visits, a sign the patient is not taking medicines, or conditions have changed -- forcing trips for the most expensive type of care.

The two companies are the biggest players in Florida for Medicare plans, both having nearly 500,000 clients for a prescription drug or Advantage plan or Medicare supplement.

Although the first two get most of the hype, about 10 million Medicare beneficiaries use supplementals, as many as use Advantage plans. Their benefits are defined by federal law and vary little, Polich said.

For some people, supplementals combined with traditional Medicare can be the equal of an Advantage plan for a fixed price of $2,500 or less a year.

Not accepted everywhere

With any plan, experts said, it is crucial to make sure your doctor and hospital accept the insurance. That can be tricky in Sarasota County, where the primary hospital, Sarasota Memorial, accepts no Medicare Advantage HMO or PPO plans, and recently stopped waiving the deductible for the Medicare Select class of supplementals.

The hospital describes it as a fiscally prudent move. Medicare Select supplementals offer little more than standard supplementals but cost the hospital more than $1,000 on every case -- about $500,000 last year, Chief Financial Officer David Verinder said.

Many studies have faulted the privately run Advantage plans for costing the government 10 to 15 percent more than traditional Medicare while adding little additional benefits.

Sarasota Memorial has declined them in part because they pay providers less and more slowly than traditional Medicare.

But Verinder said the hospital also is watching out for its future: Democrats plan cuts to Advantage plans to fund health care reform, and that may mean hospitals and doctors will get even less in the future.