The goal for the Inflation Reduction Act of 2022 (IRA 2022) is to slow inflation, a great benefit to low-income seniors and those living on a fixed income, says a recent article titled “How the Inflation Reduction Act Impacts Retirees” from U.S. News & World Report. But there’s more for seniors.

The bill will help tackle health care costs for seniors, which have skyrocketed in recent years. So many of these provisions don’t go into effect for a few years, but something in the near future is better than nothing.

Other eventual benefits to seniors:

• Medicare may negotiate the prices on prescription drugs
• A cap on out-of-pocket costs for Medicare enrollees at $2,000
• A dramatic cost-reduction on co-pays for insulin for Medicare recipients
• No cost vaccines for Medicare Part D beneficiaries

Under current law, Medicare is banned from negotiating drug prices and is forced to pay market prices. When this law goes into effect, Medicare will be able to negotiate with the pharmaceutical companies and some drug prices should drop.

One caveat: the negotiated prices will be phased in over time. Pharmaceutical companies have a strong presence in Washington. Powerful lobbyists weren’t giving the store away. In 2026, Medicare may negotiate the price for the 10 most expensive drugs, in 2027, the 15 most expensive drugs and in 2029, the 20 most expensive drugs.

Some drugs have put severe cost pressures on Medicare Part D, so the government’s ability to negotiate prices will be impactful.

Rising health care and prescription prices are especially challenging to retirees living on a fixed income. Another big benefit of the new law is limiting the out-of-pocket responsibility to retirees for prescription drugs. However, it will be three years before this goes into effect, starting in 2025.

This aspect of the bill will be especially beneficial to Medicare Part D beneficiaries who take expensive drugs for cancer or multiple sclerosis. According to the Kaiser Family Foundation, an estimated 1.4 million Medicare Part D enrollees spend well over $2,000 in out-of-pocket costs for prescription drugs in 2020.

No-cost vaccines will be a boon to retirees, who will be able to get the shingles vaccine, the annual flu shot and other vaccines at no cost.

Enactment of the provisions is still several years away, but the future looks brighter for Medicare beneficiaries, a good thing in the face of inflation and rising costs for everything from apples to zucchini.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “Inflation Reduction Act Puts Prescription Drug Relief in Sight for Seniors” read also these additional articles: Ask Mom if She has a Will and What Should I Know About Long-Term Care? and What Do Seniors Say About Aging in Place? and The Difference between Revocable and Irrevocable Trust

Reference: U.S. News & World Report (Sep. 15, 2022) “How the Inflation Reduction Act Impacts Retirees”

Medicare has several important deadlines for enrolling or altering coverage that can differ due to each person’s situation, explains USA Today’s recent article entitled “What are the key deadlines for Medicare enrollment?”

These instructions can be confusing, so let’s run them down:

Initial Enrollment Period. The Initial Enrollment Period is generally the seven-month window around your 65^th birthday when you become eligible for Medicare. You can first enroll up three months before you turn 65. The enrollment period ends three months after the month you hit that milestone. The later you sign up during this period, the longer it takes for your coverage to start. As a result, it’s generally best to get a jump on enrolling so you’re not left with any gaps in your care. If you miss the seven-month period altogether, you can still sign up but there can be delays and late fees involved.

October 1. This is the deadline for Medicare Advantage providers to send enrollees the information about the upcoming year’s plan. This notice informs you of any changes to coverage or costs. This gives you time to evaluate your current benefits and compare plans to decide whether it’s time to switch providers.

Open Enrollment Period (October 15 to December 7). This is when all Medicare Advantage and Part D prescription plans are open for applications to enroll or switch coverages. It’s also when Medicare Advantage members revert to Original Medicare. If you make any changes, your new coverage plan will go into effect on January 1.

Medicare Advantage Open Enrollment (January 1 – March 31). This is only for Medicare Advantage enrollees. You can change Advantage plans or revert to Original Medicare with or without Part D prescription coverage. You can only do this once per year, and the new coverage will begin the month after you submit your application.

Part B Special Enrollment Period. This is generally for those who have job-based health insurance after turning 65. You’re eligible to sign up for Medicare Part B up to eight months after losing that insurance without paying any late fees. Sign up early if you know when your current job-based plan will end to make sure you won’t have a gap in your coverage.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “Remember Medicare’s Important Deadlines” read also these additional articles: Medicaid Crisis Plans for Long Term Care Costs and Is Now a Good Time for a Roth Conversion? and What Does a Funeral Cost These Days? and Will Drinking Milk Prevent Dementia?

Reference: USA Today (May 23, 2022) “What are the key deadlines for Medicare enrollment?”

As the cost of goods and services goes higher and higher, consumers on tight budgets are looking for places to cut back. However, for many, trying to trim health care expenses isn’t an option. Their health — and possibly their lives — depend on continuing such care. As a result, they must look elsewhere, says Money Talks News’ recent article entitled “4 Sacrifices Older Americans Are Making to Afford Health Care.”

More than one-third of adults 50+ say they’ve skipped basics, such as food, just so they could pay for health care, according to a new survey of more than 6,600 U.S. adults from Gallup and West Health. Two-thirds of the older Americans surveyed also said health care costs are at least a minor burden. Let’s look at where people are pulling their purse strings. Here are the responses the survey respondents gave most often.

1. Utilities. Respondents whose households reduced spending on this in the past year to pay for health care included 8% of those ages 50-64 and 6% of those ages 65 and older. It is hard to cut back on utilities. We need to keep the lights on. It is also necessary to heat or cool our homes when the weather demands it. However, some Americans have been forced to trim this bill in the past year. Among those ages 50-64, Black Americans were more than twice as likely as white Americans — 15% to 7% — to make this sacrifice.
2. Food. Respondents whose households reduced spending on this in the past year to pay for health care included 14% of those ages 50-64 and 9% of those ages 65 and older. Some older Americans have no choice but to skimp on this essential to pay for health care.
3. Over-the-counter drugs. Respondents whose households reduced spending on this in the past year to pay for health care included 15% of those ages 50-64 and 13% of those ages 65 and older. When times are tough and you must make difficult decisions, the OTC medications usually go first. Women were more likely than men to cut back here, with 15% of those age 65 or older saying they decreased their spending on it in the past 12 months compared with 10% of similarly aged men. That is consistent with the rest of the survey, which generally found women making sacrifices more often than men.
4. Clothing. Those whose households reduced spending on this in the past year to pay for health care included 26% of those ages 50-64 and 19% of those ages 65 and older. This is the area where seniors cut back the most, and it’s no surprise why. Of all the things on this list, clothing is probably the least essential. Many go far beyond the basics simply for the pleasure of dressing stylishly. Those who keep things simple with a basic wardrobe can save a lot of money.

BOOK A CALL with me, Ted Vicknair, Louisiana Board Certified Estate Planning and Administration Specialist, Louisiana Board Certified Tax Law Specialist, and Louisiana CPA to learn more about estate planning in Louisiana, incapacity planning, and Louisiana asset protection.

If you liked this article, “What are Seniors Doing to Afford Health Care?” read also these additional articles: Do You Lose Benefits If You Retire Early? and Can Estate Planning Reduce Taxes? and Addressing Property in Another State in Estate Planning and What Should I Know about Burial Insurance?

Reference: Money Talks News (June 22, 2022) “4 Sacrifices Older Americans Are Making to Afford Health Care”

In an alarming number of instances, private Medicare Advantage plans are denying coverage for medical services that would be covered under original Medicare, according to a federal investigation.  These denials are likely preventing or delaying medically necessary care for tens of thousands of Medicare Advantage beneficiaries each year.

The investigation by the Department of Health and Human Services’ Office of Inspector General found that 13 percent of Medicare Advantage plan denials should have been covered under Medicare.  The findings were based on a review by doctors and coding experts of service denials by 15 of the largest Medicare Advantage plans during the first week of June 2019.   Extrapolating from their findings, investigators estimate that nearly 85,000 beneficiary requests for medical care — everything from MRIs to skilled nursing facility care — could have been wrongly denied in 2019.

In an even higher proportion of cases, plans are incorrectly refusing to pay claims. Nearly one-fifth of claims that Medicare Advantage plans initially declined to pay were for services that met Medicare coverage and plan billing rules.  This translates to an estimated 1.5 million refused payments for all of 2019, delaying or blocking payments for services that providers had already delivered.

Hidden Barriers to Care

Some 26 million Medicare beneficiaries were in Medicare Advantage plans as of 2021, more than double the figure a decade ago.  The Congressional Budget Office projects that by 2030 more than half of Medicare beneficiaries will be in a private Medicare plan. Unlike original Medicare, where the federal government is the insurer, Medicare Advantage plans are run by private insurance companies. The government pays the plans a fixed monthly fee to provide services to each Medicare beneficiary under their care. The less money the plans spend on patient care, the more they and their investors make. In this way, plans have an incentive to keep costs down.

For many beneficiaries, Medicare Advantage plans’ most disagreeable cost-cutting strategy is “preauthorization” — the common requirement that doctors and other medical providers obtain the plan’s approval before a beneficiary can receive certain medical services. If the plan administrators disagree that a procedure is medically necessary, the plan may refuse to pay for it.

Medicare Advantage plans often look attractive because they offer the same basic coverage as original Medicare at a seemingly lower cost, plus some additional benefits and services like vision and dental care that traditional Medicare doesn’t offer. (One reason Medicare Advantage plans can offer such enhanced services is because the federal government gives them additional payments compared to original Medicare.) The inspector general’s report highlights one of Medicare Advantage’s downsides.

“[B]eneficiaries enrolled in Medicare Advantage may not be aware that there may be greater barriers to accessing certain types of health care services in Medicare Advantage than in original Medicare,” the report states.

One example highlighted in the report tells of a Medicare Advantage plan that refused to approve a follow-up MRI to find out whether an adrenal lesion was malignant because the lesion was allegedly too small. In fact, Medicare’s rules do not restrict the use of follow-up MRIs based on the size of a lesion. (The plan reversed its initial denial on appeal.)

Denial Appeals Can Work

The report identified two common causes of service denials. First, even though Medicare Advantage plans’ clinical criteria cannot be “more restrictive” than Medicare’s coverage rules, plans often used tighter clinical criteria, such as requiring an x-ray before approving more advanced imaging. Second, plans often claimed that the request for services lacked sufficient documentation, even though investigators who reviewed the denied claims found that the existing medical records were sufficient to support the request.

When a Medicare Advantage plan denies a preauthorization or payment request, the beneficiary can file an appeal with the plan.  The inspector general found that when a beneficiary or provider appealed or disputed the denial of a service that met Medicare’s coverage rules, plans sometimes reversed the denial.  And in certain cases, Medicare Advantage plans corrected their own errors.

The inspector general’s report offers several recommendations for the Centers for Medicare and Medicare Services, which oversees Medicare Advantage plans, including better auditing of plans.

To read the inspector general’s report, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care,” click here.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “Medicare Advantage Plans Often Wrongly Deny Necessary Care, Study Finds” read also these additional articles: Medicare Enrollment Period Extended for Those Who’ve Been Getting a Busy Signal and Requiring Adult Children to Pay for Aging Parents’ Care and Which States Have Been Hardest Hit by the Nursing Home Staffing Crisis? and The Tax Consequences of Selling a House After the Death of a Spouse

Medicare is part of the Social Security Administration (SSA), so if you need to enroll in Medicare, that’s whom you contact. But in recent months, phone lines at the SSA were experiencing major technical issues, preventing some individuals from being able to reach the SSA via telephone in a timely manner. These issues affected the SSA’s national 800 number as well as its field office general inquiry phone lines. At the same time, because of the pandemic, SSA offices had not been permitting in-person appointments until early April.

Certain beneficiaries — particularly those without Internet access — were therefore unable to reach the SSA before the end of Medicare’s annual general enrollment period, which typically closes March 31.

As a result, the Centers for Medicare and Medicaid Services (CMS) has announced it will provide what is known as equitable relief to anyone who, due to these challenges, was unable to submit their Medicare enrollment or disenrollment requests after January 1, 2022. These individuals will now have extra time — through Friday, December 30, 2022 — to submit Medicare Part A or Part B enrollment or disenrollment requests without penalty. This relief from penalties also applies to the 2022 Initial Enrollment Period and Special Enrollment Periods.

Individuals who were eligible to be on Medicare and incurred medical care costs during this time period can request retroactive Medicare coverage going back to January 1, 2022. Note, however, that premiums must be paid as a lump sum or else can be deducted from any Social Security benefits the individual currently receives.

Contact the SSA’s national 800 number at 1-800-772-1213 for more information, or find an SSA office near you via the SSA’s online office locator.

BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.

If you liked this article, “Medicare Enrollment Period Extended for Those Who’ve Been Getting a Busy Signal” read also these additional articles: Requiring Adult Children to Pay for Aging Parents’ Care and Which States Have Been Hardest Hit by the Nursing Home Staffing Crisis? and The Tax Consequences of Selling a House After the Death of a Spouse and What to Do If You Want to Leave Your Children Unequal Inheritances and What are Your Early Signs of Dementia?