The deductibles, coinsurances and copays that Medicare does not pay for are significant, and you’d be crazy not to buy a Medigap to help with these bills.
The companies that sell Medigaps are pretty much the same ones that sell Advantage plans, and sometimes even stand-alone drug plans. The for-profit ones are driven to make money for their shareholders, but those that are private are still middlemen entities that incur typical middlemen admin expenses.
Except for the shareholder aspect of the business model, I don’t as a patient see much of a difference between the way the public and private ones operate. All of them use mechanisms to delay or deny care (e.g., prior authorizations), and all of them make extra money off of Medicare and Medicaid (e.g, by encouraging upcoding and unbundling). These and other questionable practices are normal operating procedures whether the company is private or public. The goal of either kind is to stay afloat and make money.
When the government added Part D for prescription drugs in 2006, that whole new part of Medicare got put into the hands of insurance companies. Unlike with Parts A and B, there’s no such thing as governmental Medicare for prescription drugs. Part D is entirely run by middleman companies, or as CMS calls them, “Part D sponsors.” (I wrote about these and the Pharmacy Benefits Managers last week, the PBMs being the intermediaries between insurance companies and the drug manufacturers, entities that manage drug spending, rebates, claims, pharmacy networks, mail-order, and other components in the distribution chain.)
The city negotiates Part D Medicare for us, so let’s talk about that for a minute.
According to a Citizens Budget Commission report, members of municipal unions get “generous health insurance benefits at a significant cost to taxpayers,” with NYC funding hospital and medical insurance centrally for all the workers and retirees.
But additional benefits – dental, optical, prescription drugs, etc. – come through the unions' benefit funds, specifically the welfare fund of each union. The CBC says these funds are supported primarily by city contributions on a per capita basis, and each union works its own fund separately in accordance with the trust agreement it has with the city. Retirees nevertheless pay a hefty rider for the plan they come up with.
On the open market, Medicare Advantage plans usually include Part D drugs in addition to the benefits of Parts A and B, but it doesn’t work that way with our retiree coverage. The proposed Aetna PPO will not include Part D. Instead, Senior Care members will be transitioned from Express Scripts (or whatever drug plan they now have) into a negotiated Aetna Medicare Rx plan run by SilverScript. The UFT website says:
On the open market, Medicare Advantage plans usually include Part D drugs in addition to the benefits of Parts A and B, but it doesn’t work that way with our retiree coverage. The proposed Aetna PPO will not include Part D. Instead, Senior Care members will be transitioned from Express Scripts (or whatever drug plan they now have) into a negotiated Aetna Medicare Rx plan run by SilverScript. The UFT website says:
It [will not be] not part of your Aetna Medicare Advantage PPO plan. You will receive a separate Aetna Medicare Rx/SilverScript member ID card for prescription drug services.Presumably if you stay in the Emblem HIP VIP HMO, the drug component will still be managed by Express Scripts. Both SilverScript and Express Scripts resemble the stand-alone Part D plans in the open market, but they're structurally different from them. The stand-alones in the open market are entirely separate from Medicare Parts A or B or the Medigap you might purchase to help with remaining medical costs. But in the union arrangement, the rider can only get you the SilverScript plan when you have the Aetna PPO or Express Scripts if you have the Emblem HMO.
I just went to the Medicare plan finder to see which companies offer non-union stand-alone Part D plans in the NYC area, and lo and behold: each of the 7 listed in the search results are all themselves publicly traded companies or owned by one:
- SilverScript (owned by publicly traded CVS Health)
- Cigna (publicly traded; mail-order Express Scripts)
- Humana (publicly traded)
- Wellcare (owned by publicly traded Centene; mail-order through CVS)
- AARP Medicare Rx (offered through publicly traded UnitedHealthcare)
- Empire BlueCross BlueShield (owned by Elevance Health – was Anthem, which became a publicly traded in 2001)
- Elixir (owned by publicly traded Rite Aid)
Actually I know the answer: the pharmaceutical industry is just too big to fail.
With the whole of Medicare Part D run by insurance companies, we’ve come to just accept them. And when that happens, all we can do is look around for the best priced plan for the specific drugs we take. If like in our case there’s a welfare fund running the show, it’s more of a take-it-or-leave-it situation. And I don’t think greater transparency negotiating these plans would help: the whole industry is unbelievably complicated and riddled with fraud.
I think the city looks for the best Part D deal it can get, and rank and file members are mostly oblivious. Some have taken to the streets against the new Part A, B and C the city is cooking up, but everyone in the unions has turned a collective blind eye to the absolute scandal of the Part D design and how it’s morphed into a monster. It's a legislated for-profit enterprise we’ll never get rid of in our lifetime.
If people are going to get all up in arms, I’m thinking they should have started doing it decades ago against Part D, way before the Aetna PPO became became a twinkle in Mike Mulgrew’s beady eye.
I was on the trip to Washington yesterday and a woman asked me a question about the cost of UFT drug coverage - she wanted to know what the $125 costs a month were about (mine are $250 to include my wife). Until the recent medicareAdv debacle we used to pay $150 a month each. She said she was under her husband's plan since he was in PSC - CUNY and they had no Part D drug costs - the union covered them. But when he died she ended up in the UFT plan. She called it a ripoff since she could get a cheaper plan outside for the same or better coverage. And you told me that a long time ago.
ReplyDeleteI don't understand this point: Except for the shareholder aspect of the business model, I don’t as a patient see much of a difference between the way the public and private ones operate. All of them use mechanisms to delay or deny care (e.g., prior authorizations), and all of them make extra money off of Medicare and Medicaid (e.g, by encouraging upcoding and unbundling). These and other questionable practices are normal operating procedures whether the company is private or public. The goal of either kind is to stay afloat and make money. - You seem to lump Medicare - public - into the same category in terms of operating as private. The same denials? Make extra money, delivery of service, etc -- the goal of Medicare is not to make money. The rationale for Medicare for all.
ReplyDeleteAnswering the first comment above: (1) People do not realize that they are being billed for the drug rider. They have to look at their quarterly pension statement (mine is from TRS): the monthly rider is listed as one of the deductions out of the pension. (2) I'm confused about "ended up in UFT plan": if the welfare fund of a particular union operates through a rider (most do, but not all), then it's the same citywide drug plan no matter which union you're in. So she's not been switched to "UFT" one. The Sr Care rider is $125/mo. The rider in the new Aetna plan will be $103.50. (3) Yes, there are cheaper plans on the outside, and it was explained to me recently that employer drug plans are "open formularies", which means they cover all FDA-approved drugs; plans on the open market have "closed formularies": they do not include the expensive drugs, so they can be sold to you at a cheaper premium. So it really depends on the individual's set of medications how they'd be best served. See the top of p.9 of the FAQ brochure (at www.nyc.gov/assets/olr/downloads/pdf/health/aetna-ma-docs/22-cny-0029-faqs.pdf) to see the specific circumstances where you'd be allowed NOT to purchase the rider, but buy a stand-alone Part D in the open market. Keep in mind that if you don't take the Aetna or the HIP HMO, you'd lose the Part B reimbursement.
ReplyDeleteAnswering the 2nd comment above, yes: if you are in an Advantage plan -- private or publicly traded -- they use the same techniques to save money (e.g., like with the high cost of hospitalizations)or to make money. Many plans have already been found to act fraudulently or in bad faith this way. Pure, or "traditional" Medicare does not do this. Which is why people who have Medicare + an open market Medigap -or- Medicare + Senior Care have not been hurt by those practices. The union's Emblem HIP VIP HMO is a private company (it's listed that way online but I also called to ask them specifically), yet they do the same kind of practices (e.g., delay, deny, algorithms) as the for-profit companies. They use prior authorizations a lot. Doctors tell me that with any of these Advantage plans, they've found people USUALLY get the service in the end, but the doctors have to do a lot of extra paperwork and they hate it. They're leaving the profession. Also upcoding (in order to get a higher per capita amount out of Medicare) is rampant, in the for-profits and in the private ones. These are some of the tricks of the trade for all Medicare Advantage plans. I've told you for years that I'm a Medicare-for-All advocate: the only way to cut out these middlemen ins. companies and these foul practices is to change the tax structure. PS: two of the more attractive things about the Aetna PPO (as opposed to the current HIP plan the city offers) is that at least for two years they're going to be restricting prior authorizations to a smaller set of procedures, and there's no networks of doctors. The current HIP plan uses prior auths frequently and your doctors have to be in-netowork (because it's an HMO, which is tighter than a PPO).
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