The Future of Medicare

Transcription

1 The Future of Medicare And How Private Plans are Affected Dwane McFerrin, VP Medicare Solutions Senior Market Sales, Inc.

2 Source: CSG Actuarial, LLC, Future of Medicare Supplement. November 2012.

3 Sales Trends Vary Greatly by State Source: Kaiser Family Foundation, Medigap: Spotlight on Enrollment, Premiums and Recent Trends, Medicare Policy. April 2013.

4 Reimbursement Cuts impact on MA Congressional Budget Office Projections Source: The Insurance Barn, Medicare Advantage s Future Is Bad But Not As Bad As Rumors Would Have You Believe. November 2012.

5 Projected Federal Spending on Medicare and Medicaid (% GDP) It is the rate of spending per individual that will have the most impact rather than the quantity/demographics of an aging population. Excess cost growth refers to the extent to which the increase in healthcare spending for an average individual exceeds the growth in per capita GDP. Interaction refers to the effects of excess cost growth and the aging of the population, which results in greater growth in spending than would result from either factor separately. Aging of population refers to demographic shifts, such as increasing average population age and life expectancy. Source: Congressional Budget Office via Wikimedia Commons File: Medicare and Medicaid GDP Chart.svg. < 12 September 2009.

6 * Disproportionate Share Hospital, meaning payments that go to hospitals that serve a large number o flow-income patients. Source: Congressional Budget Office via Fix Health Care Policy. Presidential Debate Prep: Understanding Obamacare s $716 Billion in Cuts to Medicare. 19 October <

7 Medicare Budget Cuts No One Likes President Obama s Proposed 2014 Budget President open to reform, combining Part A and B to a single deductible* Proposed 15% surcharge on new buyers of Med Supp Plan F Republicans and Democrats with misgivings** Pat Roberts R-KS Lizzie Borden whack at critical access hospitals Democratic Senators Cantwell WA, Nelson FL and Menendez NJ object to cuts in graduate medical education Max Baucus D-MT expressed concern about cuts to nursing homes Persuading lawmakers of a grand bargain cutting entitlements and raising revenue will be difficult; Distrust of IRS a major political issue Source: * 3/28/2013 **Mary Agnes Carey, Kaiser Health News 4/18/2013

8 Medicare Impact Deficit Reduction Proposals Senators Coburn R-OK and Lieberman I-CT (former) Raise eligibility for Medicare by 2 months every year * thereby increasing eligibility from 65 to 67 gradually The Medicare Payment Advisory Commission (MedPAC) has discussed a 20 percent surcharge on Plan F H.Con.Res.25 Means Testing for Medicare Parts B and D and freeze thresholds until 25% of beneficiaries are paying incomerelated premiums** Bowles-Simpson Commission proposed in 2010 to combine Part A and B into a $550 deductible and 20% coinsurance rate with $7,500 out-of-pocket maximum *Source: 4/18/2013 ** Kaiser Family Foundation, Medicare and the Federal Budget 4/2013

9 CMS Regulations for MA Carrot and Stick Approach Quality Stars reimbursement 5 stars = year-round selling Low-Performing Plans Letters to beneficiaries Method for agents to get paid CMS threatening to term carriers performing at 2.5 stars Expansion plans limited Medicare Advantage Disenrollment Period

10 Major Issues facing Medicare A Complex Environment COBRA Observation status Open Enrollment Period begins 10-1 and Accountable Care Organizations Navigators and healthcare exchanges/marketplaces Medicare Advantage consolidation Fraud estimated to cost $60-$90 billion annually* Disclosing provider costs Source: 5/14/2013 SF Chronicle article by Kelli Kennedy 89 charged in Medicare fraud busts in 8 cities

11 Medicare Advantage Consolidation Recent MA Acquisitions/Mergers Humana/Arcadian UnitedHealthcare/Care Improvement Plus Aetna/Coventry Cigna/HealthSpring

12 Medicare Supplement Carriers Newer Entrants AFLAC Equitable Life & Casualty Manhattan Life Everence Insurance Company Omaha Insurance Company Carriers making Acquisitions

13 A Competitive Market Part D Environment Coverage Gap is narrowing and for the first time, 2014 deductibles and thresholds will go down Fierce competition for zero deductible plans Fierce competition for low premium aging-in buyers More brand name drugs moving to generic status Referral programs becoming popular Pharmacies/Retailers becoming more active Quoting by vendor for Medicare.gov now commercially available

14 The Senior Segment is the Fastest Growing Demographic U.S. Population by Age Group , , , , , , , , , Source: CRS computations based on data in the U.S. January 21, 2011 based on the Census Bureau s December 2010 data release. These data do not include results from the 2010 census.

15 The Senior Segment will Account for 20% of the U.S. Population by Percent of U.S. Population by Age Group Percent Source: CRS computations based on data in the U.S. January 21, 2011 based on the Census Bureau s December 2010 data release. These data do not include results from the 2010 census.

16 Sources of Supplemental Coverage Among Medicare Beneficiaries, 2009 No Supplemental Coverage 12% Multiple Sources of Coverage (without Medigap) 10% Other Public/Private Coverage only 1% Employer- Sponsored only 25% Medicaid only 14% Medigap 24% Medicare Advantage only 14% Total Medicare Beneficiaries, 2009 = 47.2 Million Source: Kaiser Family Foundation, Medigap: Spotlight on Enrollment, Premiums and Recent Trends, Medicare Policy. April 2013.

17 So What Does it all Mean? Change is Guaranteed Due to: Healthcare costs Demographic changes Federal deficit Regulations already underway Private Insurance will Play a Key Role Due to: Consumer preferences Demographic changes Accountable Care Organizations/cost cutting Legislation will likely be phased in

18 How does an Agent Survive in a Changing Environment? Study the changes Educate your clients Embrace technology Support NAHU and industry organizations Know your value proposition Your clients want Call, Click, Mail or Meet