New Medicare Cards and New Scams

The following is a reprint of a letter of the Editor from Ron Iverson, President of the National Association of Medicare Supplement and Medicare Advantage Producers.

Background: As dictated by 2015 legislation, the Social Security Administration (SSA) will begin the roll-out of new Medicare cards without the use of social Security numbers. Sadly, the scamsters are always looking to take advantage of a new script.

Letter of the Editor by Ron Iverson

There is great news for Medicare enrollees, and a bit of caution regarding scammers.  The good news is that Medicare will be sending out new Medicare cards to each recipient.  The cards will arrive sometime between April 1st of this year and will be completed by April 1st of next year.

The new cards will not have the enrollee’s Social Security number on them, as they do now.  This is a major accomplishment for Medicare and is being done to help put a stop to identity theft via Social Security identification numbers.  This problem has been rampant nationally and is very serious business for Medicare enrollees who have had their cards compromised by internet bandits.

The new cards will have an 11-digit number that will have no relation to your Social Security number. So that is good news.  I understand that Montana will be in the second wave of states being sent the new cards, and that delivery is scheduled to begin May 1st.

But, along with the good news, bad news sometimes seems to follow.  The bad news is that Medicare scammers have already jumped into the game.  There is more than one technique involved, but these are the two most used.

First, scammers are calling Medicare recipients, sometimes identifying themselves as Medicare or “government” officials and telling them that the new cards are coming out, but that they will have to send $30-50 to get the new cards.  That is bogus—there is no charge for the new cards—and CMS/Medicare does not call people—it only uses the US Postal Service to communicate.

The second technique is for the scammer to say that they have a Medicare Advantage Prescription Drug Plan available, but then request personal Medicare information so that the new plan can be utilized.  This is also bogus.  Whatever you do, do not fall for this.  Medicare information is personal, and the scammers simply use it for other nefarious activities.

So, we don’t know when or how the scammers will spring into operation in your area, but if you receive one of these calls, just hang up and report the activity with a call to 1-800-Medicare (800-633-4227).  And…above all, do not feel pressured to respond to any of these calls—the scammers are well-trained in intimidation and persistency.  Don’t fall for it.

My Comments: Thank you Ron for your timely letter and information about the new Medicare card rollout. Let’s review some common techniques used by scammers and how to avoid becoming a victim.

  1. Governmental agencies such as the SSA, IRS, and CMS always communicate with you via U.S. Mail. They do not phone you nor do they email you. You can automatically assume that any purported “governmental” communication from these sources are either scam or phishing schemes. Hang up to any such phone calls and do NOT open any suspicious emails. Hit the “delete” key.
  2. In a similar vein, your credit card company, cable company, or tel-com company will never ask you to provide your user and passwords to them so they can ”update” their information. Delete such suspicious emails.
  3. Passwords: Use complex passwords with 12 or 16 characters. Use a mix of upper case, lower case, numbers and symbols. I highly recommend using a password manager such as Last Pass, KeePass, or 1Password. For more information, please click here.
  4. Use second factor authentication for critical accounts.
  5. Be careful about what you post on social media.
  6. Ron Iverson sent an email to our members warning us about a new phony email touting “TrumpMedicare.” Keep your delete key in good working order

End

Gary Taubes ‘The Case Against Sugar’, a YouTube video Part 4

transcribed by Liz Reedy

To view Gary Taubes’ 1 hour and 22-minute YouTube video, please click here.

Part 3 continues beginning at 38:43

What if Roald Dahl and Michael Pollan are right that the taste of sugar on the tongue can be a kind of intoxication? Doesn’t it suggest that the possibility that sugar itself is an intoxicant, a drug? Imagine a drug that can do this to us, that can infuse us with energy and can do so when taken by mouth. It doesn’t have to be injected, smoked or snorted for us to experience its sublime and soothing effects.

Imagine that it mixes well with virtually every food and particularly liquids. Imagine that when given to infants it provokes a feeling of pleasure so profound and intense that its pursuit becomes a driving force throughout their lives.

By the way, when I put together this thought experiment that I’m about to read, I never thought I’d ever be able to use it in a book. I thought that if I put this in my first chapter it gives away my hand so profoundly that no one will ever think I was balanced or unbiased. And then I sent it to a colleague of mine who is one of the best scientists I know. He said, “If you don’t use this then you’re crazy.”

Overconsumption of this drug has long-term side effects but there are none in the short-term. There is no staggering or dizziness, no slurring of speech, no passing out or drifting away, no heart palpitations or respiratory distress.

When it is given to children, its effects may be only more extreme variations of the apparently natural emotional roller coaster of childhood. From the initial intoxication to the tantrums and whining that may or may not be withdrawal a few hours later. More than anything, our imaginary drug makes children happy, at least during the period in which they’re consuming it.

It calms their distress, eases their pain, focuses their attention and then leaves them excited and full of joy until the dose wears off. The only downside is that children will come to expect another dose, and perhaps demand it on a regular basis.

I should have said this book was also informed by the fact that I am a parent of two pre-adolescent boys. Michael Pollan said to me at lunch one day that moderating your children’s sugar intake is one of the primary responsibilities of adulthood. I borrow from Michael there as well, but I don’t quote him.

How long would it be before parents took to using our imaginary drug to calm their children when necessary, to alleviate pain, to prevent outbursts of unhappiness, or to distract their attention? And, once the drug became identified with pleasure, how long before it would be used to celebrate birthdays, a soccer game, good grades in school?

How long before it would become a way to communicate love and celebrate happiness? How long before no gathering of family and friends was complete without it, before major holidays and celebrations were defined in part, by the use of this drug to ensure pleasure? How long would it be before the underprivileged of the world would happily spend what little money they had on this drug rather than on nutritious meals for their families?

 

How long would it be before this drug, as the anthropologist, Sidney W. Mintz said about sugar, demonstrated, “A near invulnerability to moral attack.” How long before writing a book such as this one was perceived as a nutritional equivalent to stealing Christmas?

I wanted to call this book Stealing Christmas: The Case Against Sugar and just lay it out there. I understand the Grinch-like aspect of what I’m doing; I’m not blind to it. It’s another way of saying that I’m not an idiot. But my editor preferred otherwise. When I would tell people the title of my book, a surprising number of them didn’t get the Grinch reference. Maybe Dr. Seuss hasn’t permeated our lives quite as much as I thought.

What is it about the experience of consuming sugar and sweets, particularly during childhood that invokes so readily the comparison to a drug? I have children, still relatively young, and I believe raising them would be a far easier job if sugar and sweets were not an option, if managing their sugar consumption, as Michael Pollan said (but I’m not quoting here), did not seem to be a constant theme in our parental responsibilities.

Even those who vigorously defend the place of sugar and sweets in modern diets, “An innocent moment of pleasure, a balm on the distress of life,” as the British journalist Tim Richardson has written, acknowledge that this dose does not include allowing children to eat as many sweets as they want at any time and that, “Most parents would want to ration their children’s sweets.”

Well, why is it necessary? Children collect many things: Pokémon cards, Star Wars paraphernalia, Dora the Explorer backpacks, and many foods taste good to them. What is it about sweets that makes them so uniquely in need of rationing? Which is another way of asking whether the comparison to drugs and abuse is a valid one.

This is of more than academic interest because the response of entire populations to sugar has been effectively identical to that of children. Once populations are exposed, they consume as much sugar as they can easily procure, although there may be natural limits in that culture about current attitudes about food.

The primary barrier to more consumption, up to the point where populations become obese, diabetic and perhaps even beyond, has tended to be availability and price. This includes in one study, sugar-intolerant Canadian Inuit who lacked the enzyme necessary to digest the fructose component of sugar, and yet continued to consume sugary beverages and candy despite “the abdominal distress that it brought them.”

As the price of a pound of sugar has dropped over the centuries, from the equivalent of 360 eggs in the 13th century to 2 eggs in the early decades of this one, the amount of sugar consumed has steadily, inexorably climbed.

In 1934, while sales of candy continued to increase during the Great Depression, the New York Times commented, “The depression proved that people wanted candy and that as long as they had any money at all they would buy it.”

During those brief periods of time during which sugar production surpassed our ability to consume it, the sugar industry and the purveyors of sugar-rich products have worked diligently to increase demand and at least until recently have succeeded.

The critical question which scientists debate, is what journalist and historian Charles C. Mann has eloquently put it, is whether sugar is actually an addictive substance or do people just act like it is. The question is not easy to answer. Certainly, people and populations have acted as though sugar is addictive, but science provides no definitive evidence.

Until recently, nutritionists studying sugar did so from the natural perspective as viewing sugar as a nutrient, a carbohydrate and nothing more. They occasionally argued about whether or not it might play a role in diabetes or heart disease, but not about whether it triggered a response in the brain or body that made us want to consume it in excess. That was not their area of interest.

The few neurologists and psychologists interested in probing the sweet tooth phenomenon or why we might need to ration our sugar consumption so as not to eat it to excess, did so typically from the perspective of how these sugars compared to other drugs of abuse, in which the mechanism of addiction is now relatively well understood.

Lately, this comparison has received more attention as the public health community has looked to ration our sugar consumption as a population and has thus considered the possibility that one way to regulate these sugars, as with cigarettes, is to establish that they are indeed addictive. These sugars are very likely unique in that they are both a nutrient and a psychoactive substance with some addictive characteristics.

Historians have often considered that the sugar-as-a-drug metaphor to be an apt one. “That sugars, particularly highly refined sucrose, produce peculiar physiological effects is well known,” wrote the late Sidney Mintz, whose 1985 book, Sweetness and Power, is one of two seminal English-language histories of sugar, on which other and more recent writers on this subject, myself included, heavily rely.

But these effects are neither as visible nor as long-lasting as those of alcohol or caffeinated beverages, “The first use of which can trigger rapid changes of respiration, heartbeat, skin color, and so on.” Mintz has argued that a primary reason that through the centuries sugar has escaped religious-based criticism for the kind pronounced on tea, coffee, rum, and even chocolate is that whatever conspicuous behavioral changes may occur when infants consume sugar, it did not cause the kind of “flushing, staggering, dizziness, euphoria, changes in the pitch of the voice, slurring of speech, visibly intensified physical activity or any of the other cues associated with the ingestion” of these other drugs.

As this book will argue, sugar appears to be a substance that causes pleasure with a price that is difficult to discern immediately and paid in full in the years or decades later. With no visible, directly noticeable consequence as Mintz says, questions of “long term nutritive or medical consequences went unasked and unanswered.” Most of us today will never know if we suffer even subtle withdrawal symptoms from sugar because we never go long enough without sugar to find out.

Mintz and other sugar historians consider the drug comparison to be so fitting in part because sugar is one of the handful of “drug foods,” to use Mintz’s term, that came out of the tropics, and on which European empires were built from the 16th century onward, the others being tea, coffee, chocolate, rum and tobacco.

Its history is intimately linked to that of these other drugs. Rum is, of course, distilled from sugar cane, whereas tea, coffee and chocolate were not consumed with sweeteners in their regions of origin.

Actually, when the conquistadors discovered the Aztecs eating chocolate in Mexico, in their march and fully confident of their devastation of the people, the Aztecs were mixing it with chili peppers. The conquistadors tried it and said it “tasted awful and they wouldn’t feed it to their pigs.” So, they shipped it back to Europe anyway, and they started mixing it with sugar. Within about 50 years, hot chocolate had become the morning and afternoon drink for the Spanish aristocrats.

In the 17th century, once sugar was added as a sweetener, and prices allowed it, the consumption of these substances in Europe exploded. Sugar was used to sweeten liquors and wine in Europe as early as the 14th century. Even cannabis preparations in India and opium-based wines and syrups included sugar as a major ingredient.

Kola nuts, containing both caffeine and traces of a milder stimulant called theobromine, became a produce of universal consumption in the late 19th century, first as a cocoa-infused wine in France, and then as the original mixture of cocaine and caffeine of Coca-Cola, with sugar added to mask the bitterness of the other two substances. [For more information about kola nuts, please click here and here.]

Stop 49:31 and to be continued

Items of Interest Response Form

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Medicare Advantage Funding and the Causes of Non-Renewal Notices

by Lance D. Reedy

For those of you that have received a non-renewal notice from your Medicare advantage company, we encourage you to review our companion article, I Received a Disenrollment Letter: What Now?  It will explain your choices.

Note: In the discussion that follows, I have simplified some concepts for brevity.

History

The concept of Medicare Advantage (MA) plans began with the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA). This act allowed privatized Health Maintenance Organization (HMO) plans to contract with Medicare to deliver a form of privatized Medicare. Health insurance companies later exited this privatized Medicare marketplace because the funding from Medicare wasn’t keeping up with rising costs.

The Balanced Budget Act of 1997 established the Medicare+Choice program. This was renamed Medicare Advantage by one of the provisions of the 2003 Medicare Modernization Act (MMA). It was this act that also stepped up the controversial capitation rate for the MA plans.

Medicare Advantage Funding

MA plans are privatized in that Medicare sends a certain amount of money per person per month to the sponsor, usually a large health insurance company, of the MA plan. This is called the capitation rate. This means that, for example, the base rate that the MA plan sponsor receives from Medicare is about $700 per month for every member enrolled in the sponsor’s plan. Simply put, they get so much per head per month. That’s the capitation rate.

Example: Betty Smith enrolls in the Medicare Deluxe plan from Acme Insurance Co. Her premium is $65 per month. Her plan also includes prescription coverage. Here is the revenue that Acme receives for enrolling Betty as a member:

Medicare Funding for the MA health plan: $700 per month (Note: this can be much higher for people with more health issues.), Medicare Funding for a prescription plan: $53 per month, Betty’s Premium: $65 per month. The breakdown is as follows: $30 is her contribution to the health plan, and $35 is for her prescription part of the plan.

Total: $818 per month

Remember, These Plans are Privatized

Let’s say that Betty has a knee replacement surgery with a total bill of $30,000. Her hospital stay is for three days.  Her plan has a hospital copay of $300 per day with a five-day cap. Acme pays for all days that exceed five.

Here’s how it looks:

Total bill: $30,000

Betty pays $300 per day x 3 days or $900 to the hospital. The hospital bills the balance of $29,100 to Acme, not Medicare. Remember, as far as claims go, Medicare is out of the picture.

Let’s say the Betty had physical therapy after her surgery, some labs, doctor visits and other miscellaneous medical events that cost Acme an additional $4,000 during the course of the year.

Annual Revenue that Acme Received

  • Funding from Medicare = $8,400 ($700/month x 12 months.)
  • Of Jane’s $65 monthly premium, $30 is for her health plan. $30/month x 12 months = $360
  • Total revenue = $8,400 + $360 = $8,760

Claims paid out for Betty Smith

  • Knee surgery: $29,100
  • Miscellaneous other medical services: $4,000
  • Total claims (losses) for covering Betty: $29,100 + $4,000 = $33,100. (Note: To keep this example simpler, we’re ignoring any prescription costs.)

A Losing Proposition

In this example, we can see that Acme losses were almost four times more on Betty’s behalf compared to the revenue they received from Medicare and Betty. Just to break even, Acme Insurance needs three other members’ (Alice #1, Alice #2 and Alice #3) revenue and little or no claims from those members.

As long as Acme only has a few Bettys and lots of Alices, they will be okay. They can maintain their $65 per month premium for 2018, keep their copays about the same, and maintain their extras such as a vision, dental, or health club benefit.

How Acme Insurance Gets in Trouble

In this example, we have the fictitious state of West Mountain. West Mountain has forty counties, and Acme has their MA plans in twenty of them. Acme’s bean counters have observed that they are consistently losing money in Wolf, Grizzly, Coyote, Rattlesnake, and Scorpion counties. These are low population, rural counties. To aggravate this problem, Medicare’s capitation rate in these counties is lower compared to the more urban ones. Worse yet, Acme is having difficulty finding enough specialists to serve on an “in network” basis in those counties.

To stem these losses and maintain the integrity of their Medicare Deluxe plan, Acme has decided to cut loose those five losing counties. They file their plan with Medicare, and they send non-renewal letters to their members in those five counties in early October. Simply put, they had too many Bettys and not enough Alices.

This is exactly what the now defunct New West Medicare did in Montana a few years ago. They had substantial losses in ten counties, so they non-renewed their members in those counties. Medicare advantage plan sponsors cannot drop an individual high claims member, but they can drop a high claims county.

In one rural county that New West dropped, I had one client that had a hip replacement surgery and another that was in the hospital in Billings for two and a half months. There couldn’t have been enough Alices to make up for those two Bettys. Also, there could have been more Bettys that I didn’t know about.

It Gets Worse

Exiting some counties can be a stop gap measure that buys time for a year or two. What happens if the losses begin to mount statewide? That’s what happened to New West in 2016. The decision makers looked at the numbers, and they weren’t good. In October of 2016, all New West MA members received their non-renewal notices.* While there were other factors in New West’s demise, the bottom line is that they lost enough money that they pulled their plans and exited the market. *Important. Be sure to keep your non-renewal notice. You may need it!

The Insurance Company has Another Option

Let’s say that Acme has lost money in most of West Mountain, but they want to stay in the game. Here’s their strategy.

  1. Drop their high loss counties.
  2. Drop their plans in the counties they wish to remain in, but come out with new plans. These new plans will have a combination of higher premiums and/or higher
  3. They also could trim some of their extras such as their vision or dental benefit. Your higher premiums and higher copays will generate more revenue for Acme. If it all works, they will continue to offer their plans.

Things to Remember About Medicare Advantage plans.

  1. Medicare advantage plans are privatized.
  2. The providers bill the plan sponsor (generally insurance companies) and not Medicare.
  3. The insurance company can’t operate at a loss, or it will go out of business.
  4. The company can decide which counties it desires to sponsor MA plans in any given state.
  5. Low population counties may not have any MA plans.
  6. MA plans are subject to premium and copay increases. (In a few instances these have slightly decreased.)

Conclusion

Receiving non-renewal notices for most people is an unsettling hassle. It involves change, and many people, including me, don’t like it. Now your Medicare plan needs to be redone.

I believe that having a basic understanding of how Medicare advantage funding works, can be a useful tool in your decision-making process.

Please click here to consult our companion article, I Received a Disenrollment Letter: What Now?

End

 

PDP Helper

Welcome to the PDP Helper page for Northwest Senior Insurance!

Please follow the instructions below to submit a list of your prescriptions to us so we can help you select a Prescription Drug Plan for 2018.

If you would like some additional guidance on how to use PDP Helper, please check out our Tips for using PDPHelper article.

Step 1 of 4

Contact Information

Please enter in your contact information so we will be able to get in touch with you.
Not required, but highly recommended so we have an alternate means of communication.

Pharmacy Information

Please enter your pharmacy of choice and, if applicable, any alternate pharmacies you might consider using. Then answer the following two questions.
Some plans offer substantially lower copays with specific retail pharmacies or mail order.

Benefits of a Medicare Supplement Plan

Introduction

The following table lists all of the possible benefits of a Medicare supplement plan. Plan F is the only plan that contains all of these benefits.

Basic Benefits

  1. Part A coinsurance. The Medicare supplement will pay the $315 per day coinsurance for days 61-90 of a hospital stay. The Medicare supplement will pay the $630 per day coinsurance for the 60 lifetime reserve days. The Medicare supplement will pay for 365 additional days of hospitalization after Medicare hospitalization benefits are exhausted.
  2. Medical expenses Part B: The Part B coinsurance is generally 20% of Medicare approved expenses. This includes the coinsurance for outpatient services and surgery. Plans K, L, and N require the Medicare beneficiary to pay a portion for the Part B coinsurance. ***Details below.
  3. Blood: The first three pints of blood.
  4. Hospice: The Medicare supplement pays the hospice coinsurance.

 

Skilled Nursing Facility coinsurance

  1. Medicare pays 100% for the first 20 days for an approved stay for skilled nursing facility care.
  2. For days 21-100 Medicare will pay for an approved stay. There is a $157.50 per day coinsurance that the Medicare supplement pays. ***See below for Plans K and L.

 

Part “A” Deductible

  1. For 2015 the Medicare Part “A” deductible is $1,260 per hospital benefit period. The benefit period is for 60 days and begins after one’s discharge. The Medicare supplement could pay this benefit more than one time per year. .***See below for Plans K and L

 

Part “B” Deductible

  1. 1. The Medicare Part “B” deductible is an annual $147 in 2015.

 

Part “B” Excess (100%)

  1. 1. In general, if a Medicare Part “B” provider charges an excess above the Medicare approved amount, this benefit will pay that amount. Physicians may charge a maximum of 115% of the Medicare approved amount. These are known as non-participating physicians or physicians that do not accept Medicare assignment.

 

Foreign Travel Emergency

  1. In general, Medicare does not pay in foreign countries. One will pay the first $250 for Medical services. After that, the Medicare supplement will pay 80%, and the insured will have a 20% coinsurance. Usually one must pay his/her bill upfront and then bring the bills back to submit a claim.

 

Out-of-pocket limit

  1. 1. For Plan K there is a maximum annual out-of-pocket limit of $4,940. The Medicare supplement will pay 100% after that limit is reached.
  2. 2. For Plan L there is a maximum annual out-of-pocket limit of $2,470. The Medicare supplement will pay 100% after that limit is reached.

 

High-deductible Plan F

  1. High-deductible Plan F pays the same benefits as Plan F after one has paid a calendar year deductible of $2,180. This deductible is for what the Medicare supplement would have paid. Medicare still pays its part when one has high-deductible Plan F. After one has met the deductible, then the plan pays just like a regular Plan F.

 

***Details for Plans K, L, and N

  1. Plan K: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 50%. Pays 50% of the skilled nursing coinsurance. Pays 50% of the Part A deductible.
  2. Plan L: Hospitalization and preventative care paid at 100%. Other basic benefits are paid at 75%. Pays 75% of the skilled nursing coinsurance. Pays 75% of the Part A deductible.
  3. Plan N: The insured pays a maximum $20 copay for a doctor’s office visit and a maximum $50 copay for an emergency room visit.