Why are Medicare Advantage premiums going up almost 300% in NC?

[Kelvin Mace]

I have a fairly liberal co-worker who is on Medicare and just got notice that his Medicare Advantage premiums are skyrocketing in 2015, along with his "out-of-pocket" costs, his deductibles and co-pays. He received an email from AHIP claiming this is all the result of the ACA, and that these premiums will continue their dizzying upward ascent in the years to come.

Now I know AHIP is skeezy group, but what is the deal with these increases? They are WAY out of line from what I would expect, but I am not an expert on Medicare and its various programs. This particular plan is sold by Blue Cross of NC, and the increases are:

Monthly Premium: $18.90 increasing to $64.40
Out of Pocket: $3,400 increasing to $4,500
Doctor's Visits: $10.00 increasing to $20.00
Specialists: $35.00 increasing to $40.00
In-Patient Stays: $170 increasing to $250

What is going on here? Is the ACA causing these hikes or is there another explanation?

[SammyWinstonJack]

1. RECing for answers.

[Kelvin Mace]

2. Thanks

This is bugging me.

[yeoman6987]

5. For one thing, it looks like they are giving more realistic amounts

18 dollars a month was extremely low for a monthly premium. 64 is more in line with what it probably should have been. The 4500 out of pocket is still below average. I think he still has a good deal going. He should be grateful.

[Kelvin Mace]

9. So, I should tell him

"Suck it up! You should be happy it was only a 300% increase and it could have been worse"?

So, all of this time BCBS of NC was charging low premiums out of the goodness of their heart and making no money, but now they have decided to change that and he should be happy about it? AHIP is telling him the ACA is to blame, are you agreeing with that?

[yeoman6987]

15. I am saying that his numbers are now in line

Blaming someone does no good except waste energy.

[Kelvin Mace]

21. Here's the way he sees it:

AHIP warned him that his premiums would go up because of the ACA. Now they have, so they must be right, so he needs to start opposing the ACA and listening to AHIP. He is not looking to "blame" anyone, he wants to know why his premiums went up. AHIP says it is because of the evil ObamaCare, you are telling him, "you were getting a bargain, be glad it was only 300%". AHIP is answering his question, you are not.

[WinkyDink]

3. Gee, let's see: A for-profit entity sees a way to gain more money. Hmmmmm.......

Jan. 1, 2015 "Employer mandate" looming

Another Obamacare milestone won't hit until 2015, but it should make headlines in 2014 as business owners prepare for it.

The so-called "employer mandate" requires all businesses with more than 50 workers provide health-care coverage or pay fines of $2,000 per employee. The mandate was supposed to take effect in 2014, but the Obama administrationdelayed it by a year. The administration said its decision was "designed to meet two goals," including reducing the amount of paperwork required from employers and working with small companies who were threatening layoffs or reduced hours in order to report a workforce of fewer than 50 people.
~~~~~~~~~~~~~~~~~~~~~~~

IOW: ANY company raising rates are USING THE ACA UP-COMING MANDATE AS AN EXCUSE.

[newfie11]

4. Wow that's quite an increase!

Waiting for an explanation.

[librechik]

6. my copays go up every year just like that

it's private insurance. Profit is no doubt a factor.

They should be called on this. It's shameless.

[underpants]

7. Basically Med Adv plans are cash cows for Insur. Providers via Medicare payments

The link below is not going to really back what I post ($ cuts from Medicare to Med Adv IP's) but bare with me.

Med Adv are draining money (YOUR TAX DOLLARS!!) out if the system. ACA does plan to either get rid if them or not make them marketable eventually. The proposed cuts were reversed due to insurance lobbying to keep their scam going and Republican threats.

I think that the example you gave is a double dip. Either the IP was expecting the Medicare cuts so they were passing it on to the consumer (hey the have to make their money) .... which eventually will make the plans less marketable. OR the IP got the cuts reversed AND passed it on to the consumer anyway. Med Adv plans are bad news for the system but seem good to the consumer. Your coworker should shop around - it may still be a good thing for them but eventually it won't. There are other plans out there.

Googled - ACA Med advantage

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/07/obama-administration-reverses-proposed-cut-to-medicare-plans/

[Kelvin Mace]

13. So, to clarify

AHIP lobbied for and got a cut reversed to a 3% increase, and BCBS-NC is raising rates anyway because they can, and then AHIP is blaming the increase on the ACA instead of BCBS-NC?

[underpants]

27. Probably yes

[Kelvin Mace]

30. Thanks.

[jwirr]

20. There is a reason that Medicaid would want to make Med. Adv. less marketable. Med. Adv. just

provides what Medicaid already provides except the Med. Adv. does it through a middle man - the insurance provider. It is not a good deal.

[SoCalDem]

8. Advantage plans have been unrealistically low forever

The ACA mandated that they stop gouging the govt for the gap..and that they start passing on some of it to their customers..

[underpants]

29. Much more succinctly put than I did

[Sgent]

10. It is due to the ACA

Pre ACA insurance companies were given 105% of the cost of regular medicare. Now they are only give.n 100%

[Kelvin Mace]

11. So, a 5% reduction warranted

a 300% increase in premiums? So, they are just using this as an excuse to line their pockets?

[bornskeptic]

39. Actually a 5% cut would justify that premium increase.

The cost of Medicare coverage is around $11000 per enrollee per year. A few years ago Congress was appropriating over $500 billion to cover about 47 million seniors. I'm sure the per person cost has gone up a little since then. 5% of $11000 is $550 per year, or around $46 per month. $18+$46 = $64.

[Recursion]

12. Because ACA took the subsidies (or at least many of them) away

This is one case where "Thanks, Obama" is more or less accurate.

[jwirr]

23. I do not agree. I had the same services provided directly through Medicare/Medicaid until the

insurance company convinced me that they would do more. Well I now have Med. Adv. through the insurance company but I get the same services. The exact same services and now the Medicaid program has to pay the insurance for what they did as part of their program before. If you want to blame someone, blame the insurance companies.

[YarnAddict]

14. If I recall,

this was one of the ways the ACA was going to be at least partially paid for. Kind of a robbing Peter to pay Paul kind of thing.

[KatyMan]

16. I thought the ACA was Medicaid not Medicare?

So not sure what it would have to do with the increase? Could be wrong tho!


edited because there's only one I in I ...

[sinkingfeeling]

17. Medicare Advantage plans replace regular Part B of Medicare. And because

some insurers priced the Advantage plans well below the cost of Part B ($105/mo. in 2013), the costs to the federal government was huge. ACA sought to stop that waste of tax payer money. If your co-worker continues with his Advantage plan he is still saving money on the monthly premiums.

http://kff.org/medicare/fact-sheet/medicare-advantage-fact-sheet/

"In 2014, Medicare Advantage markets and plans will look much as they did in 2013, in terms of the number of plans available to beneficiaries. Over the longer term, companies offering Medicare Advantage plans may respond to payment changes in several different ways, depending on the circumstances of the company, the location of their plans, their historical commitment to the Medicare market, their ability to leverage efficiencies in the delivery of care to enrollees, and possibly their quality ratings and bonus payments. Decisions made by these firms could have important implications for beneficiaries with respect to their choice of plans, out-of-pocket costs, and access to providers."

[dixiegrrrrl]

19. Also, people can switch their Medicare D plans between Oct and Dec,

The upcoming Medicare annual open enrollment period – which begins October 15 and ends December 7 – allows for people with Medicare to choose their plans for next year by comparing their current coverage and quality ratings to other plan offerings. New benefit choices are effective January 1, 2015.

To view the Part D Base Beneficiary Premium, the Part D National Average Monthly Bid Amount, the Part D Regional Low-Income Premium Subsidy Amounts, the De Minimis Amount, and the Medicare Advantage Regional Benchmarks, go to: http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Ratebooks-and-Supporting-Data.html, and select “2015.”

To learn more about the Medicare Part D prescription drug benefit, go to: http://www.medicare.gov/part-d/.

[jwirr]

26. I like my part D provider but I regret signing up for their Med. Adv. program. How do I get back to

regular Medicare?

[dixiegrrrrl]

35. I would call Medicare, actually.

They would probably send you a form to sign, dropping the coverage.

FWIW..I have been pleasantly surprised by how easy it was to talk to Medicare people.

[jwirr]

37. Thanks. I will try that.

[Kelvin Mace]

22. None of Part D

increased, just everything else.

[dixiegrrrrl]

25. Yeah...sorry, my bad...

I had Advantage confused with Part D.

In all truth, when I went on Medicare, I could not see any advantage to ...Advantage.
But, medical costs where i live are much lower than some other places.

[jwirr]

28. You are correct. Medicare and Med Adv provide the exact same services. Adv. charges Medicare for

their services. The only reason we still have Med. Adv. is because when ACA was being passed the elderly protested because they would lose Med. Adv. So even though it costs Medicare more than if they provide the same services they kept it.

We should all quit Med. Adv. through a private insurance company if we want ACA to help cut the cost of medical care. All we are doing is paying the middle man.

[RebelOne]

33. When I first signed up with Medicare,

I did not take the Part D plan because I was rarely sick and did not need prescription medications. But then I had to have cataract surgery and the cost of the eye drops I had to use before surgery was sky-high. I regretted not getting Plan D. But this October, I will definitely be getting Plan D.

[dixiegrrrrl]

36. I would be interested in info about those eye drops.

Since cataract surgery is in my near future.
If you don't want to disclose on this post, perhaps you could PM me?
Had not even thought about eye drops cost.

And how much of the surgery cost did Medicare pay for?

[NCTraveler]

24. Because the current state of affairs with respect to health insurance in this country sucks.

We need to fundamentally change the relationship between citizen and health care provider. That means changing the way funding is currently being done, which is the way it has been done for decades.

[TheNutcracker]

31. Ask George W. Bush who put that costly arm in Medicare.....

[madville]

32. It has been expected for some time

It has been expected that the ACA would cause some Advantage plans to have to either cut benefits or increase premiums/copays/deductibles, or they would at least use it as an excuse to do so.

[Progressive dog]

34. Sounds right,

ACA reduced SUBSIDIES to insurance companies on medicare advantage plans. The 2/3 of seniors on original medicare have unlimited out of pocket expenses.

[Doctor_J]

38. Healthcare in the US is a for-profit commodity. ergo the middlemen will insert extra fees

whenever and wherever they can.

Whether Obamacare is the "Cause" of this is debatable. But the law certainly

allows and encourages

them to get every dime they can. Bush passed Medicare Part D, which Krugman called the Middleman Multiplication And Profit Protection Act. the ACA is that same thing applied to everyone.

[crazylikafox]

40. Make sure you friend shops other plans during the open enrollment period coming up next month

Sometimes when an insurance company looses interest in competing for insurance customers in a given area, they just raise their rates & people leave the plan. There may be better deals out there.

Going back to regular Medicare plus a supplemental plan may also be a better deal now. There are advantages to that, in that you don't have to be restricted to an in-network doctor. Your friend's current Advantage plan still looks to be a great deal for someone who doesn't use medical services much, since the monthly premium is still low. But the out of pocket co-pays can really add up if you have medical problems. I pay $155/month for a medicare supplemental, & everything is covered. No copays or deductibles at all.