Hedy Towan took all the extra precautions this summer when she came down with a respiratory infection. The stem-cell transplant recipient conducted nearly all doctor’s visits by phone and picked up a nebulizer, antibiotic and syringe at her pharmacy drive-thru window.
Not once did she meet Dr. Luke Strnad, the Oregon Health & Science University infectious disease specialist who treated her. She doubts he even knows what she looks like.
“I’m still not sure how to pronounce his last name,” said Towan, 74. (It’s STER-nad.)
Such is the altered landscape of Medicare enrollees in the age of COVID-19. As millions of seniors prepare to shop increasingly popular private Medicare and prescription drug plans, they face new challenges ensuring they’re properly insured amid a pandemic.
During so-called open enrollment, taking place Oct. 15 through Dec. 7 this year, seniors and disabled adults under age 65 can switch Medicare Advantage insurance plans without penalty. Those in standalone Part D prescription drug plans can also make a change.
It’s a daunting task, even in normal times. Plans often make changes to their coverage. If seniors decide to shop around, they must scour dozens of offerings, costs, benefits and lists to make sure their prescriptions, providers and medical needs remain affordable.
“With the pandemic, we’re all at higher risk of getting sick now,” said Sarah Murdoch, director of client services at the Medicare Rights Center, a New York-based advocacy group. “You want to make sure you’re in a plan that’s going to work for you.”
Insurance brokers and a nationwide network of trained enrollment counselors can help. But many brokers and State Health Insurance Assistance Programs have canceled in-person meetings. In Oregon, calls to the Senior Health Insurance Benefits Assistance program phone bank have been down all year, raising questions about how prepared and focused enrollees will be to make changes on their own.
“We’ve already started to hear from our clients and literally they’re saying if everything’s good we’re just going to stay where they are,” said Elma Friend, owner of Willamette Valley Benefits, an insurance brokerage in Milwaukie. “You almost feel like the heels are digging in.”
The federal government has tried to help. It’s relaxed rules to make it easier for doctors and patients to meet virtually or by phone during the pandemic. It’s also made improvements to its online search engine Medicare.gov, an important comparison tool for seniors.
But with many plan’s cost-sharing waivers currently scheduled to expire at the end of 2020, Medicare Advantage enrollees might face atypical costs for COVID-19- related care, hospitalization and recovery. What’s more, limits on how much consumers can shell out each year for both medical and drug costs have gone up significantly, making cost considerations more important.
“Beneficiaries will likely have more difficulty predicting the medical care, prescription drugs, provider networks and other benefits they will need in 2021,” said Gretchen Jacobson, vice president of Medicare programs at The Commonwealth Fund, a nonprofit research foundation.
The new risk from COVID-19 is not minimal, either. Through July 18th, at least one of every 100 Medicare recipients had been diagnosed with COVID-19, according to Centers for Medicare & Medicaid Services claims data. That figure likely undercounts the true number because claims take several months to work their way through the system.
Roughly one-fourth of those diagnosed ended up in the hospital. And one in four died while hospitalized.
“Depending on how the pandemic plays out this winter, enrollees may also be thinking about what will my care look like or the care of my spouse look like if I do happen to get the virus?” Jacobson said.
Here’s what Medicare recipients can expect this open enrollment season:
The good news about COVID-19: The federal Centers for Medicare & Medicaid Services has said Medicare will cover COVID-19 tests and related visits to doctor’s offices, urgent care hubs or emergency rooms for free. A vaccine, when available, also should not cost recipients money. And most Medicare Advantage plans are waiving copays for hospital stays and other virus-related treatments. Aetna, for example, sent out COVID-19 kits with sanitizing supplies and masks while also making virtual mental health visits available to all members, spokeswoman Katie Dalton said.
And the bad …: Most of those waivers are scheduled to expire by the end of 2020. Seniors should think carefully about how their plan might cover a COVID-19 related illness or hospitalization, experts say.
In a hospitalization, most basic Medicare patients would be on the hook for a deductible of more than $1,400. Medicare Advantage members would pay between $295 and $400 per day for the first few days before full coverage kicks in. Medigap plans cover most or all patient costs.
Recovery is another concern. A Medicare Advantage enrollee discharged to a nursing home won’t pay anything for the first 20 days, but then cost sharing charges of $50 to $184 per day kick in.
In Oregon, Kaiser Permanente’s Medicare Advantage Enhanced Plan, for example, fully covers all nursing home stays for a monthly premium of $127. But Kaiser’s brand-new $0 premium plan will charge members $150 per day once their nursing home stay stretches past three weeks.
Virtual care is likely here to stay: Medicare began covering remote appointment benefits in 2019, but limited them to rural areas and non-home settings. After the pandemic took hold, the government temporarily expanded the number of services that could be provided without an in-person visit. It also allowed them to take place in homes and places like rehab centers.
Between mid-March and mid-June, the government estimates, one-third of Medicare beneficiaries did basic office visits remotely, while six-in-10 attended virtual mental-health sessions. Though not limited to Medicare, Oregon Health & Science University providers conducted 36,000 digital appointments in September, up from 1,100 in February, spokesman Erik Robinson said.
Anne Lindsay, who suffers from sciatica nerve pain, has attended her physical therapy appointments since June by video-conference, placing her laptop on the floor when her therapist needs to evaluate her.
“In some ways I consider I’m getting as high quality of service as I did before,” said Lindsay, 72, of Portland. “In many ways, it’s more convenient because I don’t have to go in person.”
Higher limits on out-of-pocket expenses: While monthly premiums are generally holding steady or declining, other less-advertised costs are increasing. The limit that Medicare Advantage members can be asked to pay out of pocket for medical care will jump in 2021 to $7,550. It had been capped at $6,700 since at least 2014.
That “maximum out of pocket” doesn’t include prescription drug spending. That coverage has its own cap, called the catastrophic limit. It increased $1,250 in 2020 to $6,350 and will bump up to $6,550 next year.
While most plans set lower limits, others are taking advantage of the higher ceilings. Most plans offered by Aetna will have out-of-pocket maximums of $6,900 or more.
Dara Smith, director of Medicare sales for Regence BlueCross BlueShield of Oregon, defended the increases, saying that fewer than 2% of members reach the maximum in any given year.
“It’s a way to ensure that low premiums can be continued,” Smith said of the higher limits. “I wish people would take that item out of consideration in their benefit decision making.”
But insurance brokers say they point the limits out to clients so they know how much savings they might need.
More non-medical perks: Plans are offering more benefits not covered by original Medicare, some of which look attractive in the COVID-19 era.
Among them: transportation to medical and non-medical appointments, after-hospital meal deliveries and allowances for over-the-counter medicine.
Bend, Oregon-based PacificSource now offers gift cards as incentives for preventive care. Regence BlueCross BlueShield of Oregon is launching a virtual companionship program for chronically ill patients, with up to four hour-long visits each month for help around the house, computer advice or just to sit and play cards.
“It’s essentially bringing together the Millennials and the Baby Boomers,” said Dara Smith, director of Medicare sales for Regence. “We know that seniors are lonely and the pandemic is making things worse.”
Cost relief for diabetics: Seniors who use insulin saw the cost of some medications increase by more than 10% each year between 2013 and 2018, according to the nonprofit research firm Kaiser Family Foundation. Manufacturer rebates likely offset some of those costs, but the increases still outpaced inflation.
A Trump administration test program seeks to relieve some of that pressure. The Insulin Savings Program will cap vials and pens of insulin meds on some plans at $35. Only a handful of plans and drug manufacturers volunteered to participate, so diabetic patients looking for relief will have to shop carefully, brokers say.
More options for patients with kidney failure: Previously, 500,000 Medicare recipients with end-stage renal disease were prohibited from enrolling in Medicare Advantage plans. That changes in 2021, expanding their provider and coverage options.
Medicare Savings Account plans: These plans from Pennsylvania-based Lasso Healthcare Insurance are like Health Savings Accounts for Medicare. Lasso contributes $2,000 or $3,000 to the account for enrollees to spend on health care. If enrollees spend more, they must cover the difference until they’ve met the plan deductible ($5,000 or $8,000). At that point, full coverage kicks in.
There’s no monthly premium and no required provider or hospital network, but members must buy separate coverage for prescription drugs, dental, vision or unexpected hospitalizations. It might be an option for seniors who don’t expect to go to the doctor often or who travel a lot.
Brent Hunsberger is an investment adviser representative in Portland. For important disclosures and information about Brent, visit bit.ly/2dwmN7w. Reach him at [email protected] or leave a message at 503-683-3098.