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Greetings to Our Clients and Friends!
Now that summer is over, we are quickly approaching a new season: the Annual Election Period (AEP) for Medicare Health and Drug plans. Starting this year, AEP runs from 10/15 - 12/7. Prior to 2011, AEP ran for the last six weeks of the year. Since this email is scheduled for distribution late on September 30th, by the time you read this it will be permissible to discuss benefits for the 2012 plan year. According to CMS rules, agents can discuss plan benefits beginning on October 1st; and enrollment applications can be taken starting October 15th.
In this issue, our lead article presents results of a new study, "Survey of Boomers and Seniors", conducted by The National Council on Aging (NCOA) and UnitedHealthcare. Survey results show that over half of respondents find Medicare confusing or do not understand it at all. Now that's a big surprise!
Following the lead article, we report on what's been happening in the federal courts relative to health care reform. At this time, it seems nearly certain that the issue of the constitutionality of the health reform law and the individual mandate will be decided by the U.S. Supreme Court.
Until Next Quarter,
Andrew Herman
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Beneficiaries, Boomers Remain Confused by Medicare
Survey conducted by The National Council on Aging and UnitedHealthcare | |
In July of 2011, the survey sponsors engaged a research firm to interview 1,000 seniors aged 65+ and 500 baby boomers aged 60 to 64 in order to gauge their understanding of the Medicare program. Some of the key findings are summarized below; or click here to read the full Report of Findings.
The Basics of Medicare
- 46% of boomers and seniors say that they understand Medicare and how it works. The other half either finds it confusing and does not understand the program very well (35%) or admits not understanding it at all (16%).
- Only 33% correctly identify Medicare Part A as the hospital insurance component of the program, and only 23% correctly identify Medicare Part B as the part that covers doctor visits.
- 68% do not even even venture a guess about what Part C entails, and about the same proportion (64%) do not know whether Medicare Part C and Medicare Advantage are synonymous or refer to different types of coverage.
Health Care Reform
- 50% of Americans age 60+ describe their understanding of the Affordable Care Act as poor, and 33% say they have a fair understanding of the law. Only 3% have an excellent understanding and 9% have a good understanding of the law.
- 57% are aware that the health care reform law provides preventive coverage including a yearly wellness visit to people enrolled in Medicare, and 44% are aware that the health care reform law is designed to improve the quality of care for Medicare beneficiaries with chronic illnesses such as diabetes and high blood pressure.
Medicare and Changes from Health Care Reform
- Americans age 60+ are evenly divided between those who have (47%) and have not (48%) heard of the so-called "donut hole" in Part D prescription drug coverage.
- Among seniors who are aware of the donut hole, one in five (19%) report that they have ever fallen into this coverage gap.
- Seniors are largely unaware of new discounts in the donut hole resulting from health reform: 37% of seniors who say they are aware of the donut hole continue to believe they have to pay the full cost of prescription drugs when in the donut hole, 28% understand they'll pay a discounted cost of their drugs when in the donut hole, and 34% are not sure.
- Of those respondents who are aware of the new discounts in the donut hole, nearly two-thirds (64%) have no idea what type of discount to expect.
- 74% of all boomers and seniors understand that they can make changes to their Medicare coverage only during the annual enrollment period, but the exact dates are unclear to most of them.
Understanding Medicare Options
- 58% of all seniors say they have either an excellent or a good knowledge about how to evaluate their Medicare options. The other 39% describe their ability to shop around effectively as either fair or poor.
- 46% of all seniors (age 65+) have never shopped around for the best Medicare coverage for themselves. About one in four have shopped around either over the last year (27%) or two or more years ago (24%).
- Low expectations of finding major savings, coupled with satisfaction with their current coverage, are the major factors dampening interest in shopping around for Medicare coverage.
- 47% of limited-income seniors have heard of the Extra Help program, but only 13% say they have ever applied for assistance through it. Fewer (31%) have heard of the Medicare Savings Programs.
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| Health Care Reform Update
What's been happening in the federal courts? | |
In a recent health care reform-related decision, the U.S. Court of Appeals for the 4th Circuit ruled that Liberty University and Virginia Attorney General Ken Cuccinelli lacked standing to challenge the individual mandate. Virginia passed a law barring the individual mandate shortly after the enactment of the Affordable Care Act, and then filed suit based on the conflict between state and federal law. The strategy of using state laws to challenge a federal law had no merit, the Richmond, Virginia panel argued in its decision to dismiss the case.
The 4th Circuit held in an earlier ruling that the Anti-Injunction Act (AIA) barred two taxpayers from bringing a pre-enforcement action challenging the individual mandate. Essentially the court ruled that the penalty for not having insurance is a tax, and tax provisions cannot be challenged until any tax actually is paid (which won't be until 2014).
In addition to the 4th Circuit rulings, the 6th U.S. Circuit Court of Appeals in Cincinnati has ruled in favor of the Affordable Care Act being constitutional. As would be expected, the Obama Administration points to these rulings and continues to express the utmost confidence that the health care reform legislation will survive. In a September 28th White House Blog post, Stephanie Cutter (Assistant to the President and Deputy Senior Advisor) writes, "We know the Affordable Care Act is constitutional. We are confident the Supreme Court will agree."
Unfortunately for President Obama, on August 12th a three-judge panel from the Eleventh U.S. Circuit Court of Appeals in Atlanta ruled 2-1 that Congress and the President overstepped their authority by requiring all Americans to obtain health insurance. The Atlanta court did not go as far as U.S. District Judge Roger Vinson, the Pensacola, Florida federal judge who struck down the entire law as unconstitutional. In that famous decision from January of this year, Judge Vinson argued that the Commerce Clause of the U.S. Constitution gives Congress no more right to order residents to own health insurance than it does to require them to buy broccoli.
The National Federation of Independent Business (NFIB) has asked in a petition filed in response to the Eleventh U.S. Circuit Court of Appeals case whether Congress has the right to make individuals buy health coverage. The Obama administration also filed its own petition and gave the following statement: "It directly addresses the consequences of economic conduct that distorts the interstate markets for health care and health insurance - namely the attempt by millions of Americans to self-insure or rely on the back-stop of free care, and the billions of dollars in cost-shifting that conduct produces each year when the uninsured do not pay for the care they inevitably need and receive."
The next Supreme Court terms begins on October 3rd. If the high court decides to hear the case, a decision could be delivered next year. As for me, I like vegetables and I just so happen to sell insurance - but I wouldn't want broccoli or a health insurance policy to be forced on me or anyone else. |
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Quote of the Month:
In matters of style, swim with the current; in matters of principle, stand like a rock.
Thomas Jefferson
3rd President of US
(1743-1826) | |
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