MA Plans

[jdeasy]

I'm so glad others have joined the conversation. Standardizing plans and letting companies compete on price would be a significantly better solution than simply eliminating lock-in. Plans only change every year, so if beneficiaries took a look at their options each year and picked a plan, then there wouldn't be a reason for them to change unless they developed or diagnosed with a costly condition and didn't opt for the plan which had the most comprehensive coverage for that condition. Giving seniors the option to switch plans continually would allow situations like the following to happen:
The seniors pick a plan that receives $800+/month for 5 months (over $4k) and only pays out a $400 in doctors visits and tests before the senior gets diagnosed with a serious condition and wants to change plans. The first plan gets to keep $3,600 (less commissions and admin expense) and then the new plan the senior switches to would start receiving $800/month, but be forced to pay out $20k/month or more in claims, they'd be getting penalized for offering richer benefits. Under that model companies would be less likely to offer plans with rich benefits because they'd be opening themselves up for huge loses. Part of the reason why so many companies have expanded their service areas and even more have entered into the MA business is because reimbursements have raised, carriers receive additional money for having members with certain health conditions, and lock-in exists.
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Maybe someone has been slipping something in your coffee?

If plans were standardized, there certainly wouldn't be a need for lock-in. What is it with you and and this lock-in ftish? Why such a concern for cetain carriers being out a few dollars more than another one?

What happened to 'do the right thing for the client'? Beneficiaries would be better served without a lock-in. Carrier would be forced to stup up to the plate and mandate good service to avoid losing clients to a company that did provide customer service. How one can be against making plans better for beneficiaries is just beyond belief.

 

[stormtracker]

Market medicare supplements and final expense and the problem goes away for you..

There you go. Why would any licensed agent with the sense God gave a piss ant sell MA's???

 

[sman]

Oh I don't know? Maybe because it's what's best for that particular client. God forbid someone does what's in the best interest of the client.

To be quite honest, I feel the same way about final expense as you do about MA plans. A total waste for the majority of people.

There you go. Why would any licensed agent with the sense God gave a piss ant sell MA's???

 

[Josh]

What happened to 'do the right thing for the client'? Beneficiaries would be better served without a lock-in. Carrier would be forced to stup up to the plate and mandate good service to avoid losing clients to a company that did provide customer service. How one can be against making plans better for beneficiaries is just beyond belief.

Why such a concern for cetain carriers being out a few dollars more than another one?

I reversed the order of those to paragraphs because you answer your own question. Without lock-in, companies that offer solid benefits get penalized for doing so and companies that offer weaker benefits are rewarded. That's the problem. The companies that do offer great benefits and great customer service will take on bad risk throughout the year and potentially lose much more than "a few dollars" to the point where it would affect their benefits for the next year and the year after that. You're under the mistaken impression that if a plan loses a member who is about to undergo treatment for an expensive condition it will "punish" the plan, but all it's doing is rewarding bad behavior. The plan that lost the member will have more profit and the plan receiving the new member will be taking a bigger loss than they would have before, at the end of the day it's the plan members in the years to come that will be hurting more than anyone else. What your suggesting as the solution for "almost all" of the problems with MA would end up making plans less competitive and hurt the consumer, you're just to short-sighted to see that for what it is and to closed-minded to think about the numbers.
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There you go. Why would any licensed agent with the sense God gave a piss ant sell MA's???

One great reason to sell MA plans is because they offer great benefits that are GI. Some agents think that saving a senior $185/month in premiums (plan f + part d) and switching them to an MA-PD with no copay on PCP visits or the hospital, and a $5 specialist copay is good for a senior. In some areas the benefits are richer than a med supp, no premium, and include dental. Why would an agent ignore a product like that?

 

[jdeasy]

I reversed the order of those to paragraphs because you answer your own question. Without lock-in, companies that offer solid benefits get penalized for doing so and companies that offer weaker benefits are rewarded. That's the problem. The companies that do offer great benefits and great customer service will take on bad risk throughout the year and potentially lose much more than "a few dollars" to the point where it would affect their benefits for the next year and the year after that. You're under the mistaken impression that if a plan loses a member who is about to undergo treatment for an expensive condition it will "punish" the plan, but all it's doing is rewarding bad behavior. The plan that lost the member will have more profit and the plan receiving the new member will be taking a bigger loss than they would have before, at the end of the day it's the plan members in the years to come that will be hurting more than anyone else. What your suggesting as the solution for "almost all" of the problems with MA would end up making plans less competitive and hurt the consumer, you're just to short-sighted to see that for what it is and to closed-minded to think about the numbers.
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One great reason to sell MA plans is because they offer great benefits that are GI. Some agents think that saving a senior $185/month in premiums (plan f + part d) and switching them to an MA-PD with no copay on PCP visits or the hospital, and a $5 specialist copay is good for a senior. In some areas the benefits are richer than a med supp, no premium, and include dental. Why would an agent ignore a product like that?

Your 'the sky is falling' BS is just that, BS. I just got in from a meeting with several professional agents that were having a regional MA HMO plan pitched to us. The discussion about lock-in and the problems it causes came up. It was unanimous, even from the plan sponsors, that eliminating lock-in would be a marvelous idea. I mentioned that I knew of one person that thought lock-in was a good idea and they all laughed and thought I was making it up.

Lock-in lets the bad companies keep their capitation for the whole year. That's the only ones that benefit from lock-in. In what other business besides MA is choice taken away from from the customer?

 

[Tom Highway]

To MedicarePlanSolutions:
Could you tell me, without writing a novel, why having no lock in would hurt a beneficiary?
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Your 'the sky is falling' BS is just that, BS. I just got in from a meeting with several professional agents that were having a regional MA HMO plan pitched to us. The discussion about lock-in and the problems it causes came up. It was unanimous, even from the plan sponsors, that eliminating lock-in would be a marvelous idea. I mentioned that I knew of one person that thought lock-in was a good idea and they all laughed and thought I was making it up.

Lock-in lets the bad companies keep their capitation for the whole year. That's the only ones that benefit from lock-in. In what other business besides MA is choice taken away from from the customer?

Exactly!! I'd love to see how any of us would feel to find out we're locked in to the auto insurance on our own car for a year? What about the cable/satellite/cell phone contracts? Don't people just LOVE being cotractually obligated to stay with the same vendor no matter what?

 

[Josh]

To MedicarePlanSolutions:
Could you tell me, without writing a novel, why having no lock in would hurt a beneficiary?

Without writing a novel, sure, but the answer to your question is more than a few sentences. Again, I don't agree with the way lock-in is administered now, but as a concept it makes sense. MA plans only change once each year, so why shouldn't they make an informed decision about what plan is best for them and stay with it until the plans change again? One answer is that their health conditions change and they need a "better" plan, meaning one with richer benefits. If that's the reason they want to change plans, it's going to penalize the plan they're switching too for offering better benefits. If insurers offering rich benefits take enough loses then it will reduce the benefits for the next year which means that the beneficiaries won't be offered plans with as attractive benefits. That's one reason, another reason why an annual enrollment period helps beneficiaries is it limits the amount of time throughout the year they're being bombarded with advertising.
Another reason eliminating lock-in would hurt seniors is it would encourage sloppy enrollment behaviors. The financial stability of an insurance company relies on it's ability to spread similar risk over a homogenous group of insureds. If people are enrolling in and out plans frequently then it puts a strain on the system.
A fourth reason why eliminating lock-in would hurt beneficiaries is from an administrative perspective. Before lock-in existed some seniors were changing their plans on a monthly/semi-monthly basis and the result was that Medicare wouldn't know what plan they were in enrolled in at a given time until months down the road. That becomes a logistical nightmare from a billing/reconciliation perspective and generates additional costs in the utilization of healthcare dollars that weren't their before.
I'd think it naive to believe there was one solution for everything, but the concept of lock-in does have some value.

Exactly!! I'd love to see how any of us would feel to find out we're locked in to the auto insurance on our own car for a year? What about the cable/satellite/cell phone contracts? Don't people just LOVE being cotractually obligated to stay with the same vendor no matter what?

What you, along with most other agents, are entirely missing is that there is a cost associated with insuring these members. Sure, you can switch your car insurance, but they're going to underwrite your policy and rate you accordingly. Depending on your driving history a company might entirely decline the opportunity to insure you if they don't feel it's good piece of business. MA plans don't have the option of denying coverage because it's all but guaranteed issue.

If everyone altruistically wanted to do what's best for the beneficiaries then the government would self insure the risk, make carriers bid on offering administration only contracts, and hold agents more accountable for enrolling seniors in plans that clearly aren't a good fit for them or other negligent behavior.
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Your 'the sky is falling' BS is just that, BS. I just got in from a meeting with several professional agents that were having a regional MA HMO plan pitched to us. The discussion about lock-in and the problems it causes came up. It was unanimous, even from the plan sponsors, that eliminating lock-in would be a marvelous idea. I mentioned that I knew of one person that thought lock-in was a good idea and they all laughed and thought I was making it up.

I'm not claiming the sky is falling, what I've said is it will affect loss ratios which usually translates into a reduction of benefits. I believe that the sales management laughed at it, but it's the finance and accounting staff along with medical directors that would be the ones with the concern.

Lock-in lets the bad companies keep their capitation for the whole year. That's the only ones that benefit from lock-in. In what other business besides MA is choice taken away from from the customer?

This is where I keep coming back to the willful ignorance. Lock-in also makes companies that don't offer rich benefits pay huge claims that would otherwise get pinned on "good" carriers that offer solid benefits to their members. If an MA plan get's stuck paying for enough big ticket treatments on new members, they'll have to stop offering benefits that are so competitive because they'll end up realizing they're losing money by doing so. How does that not hurt the customers in the years to come?

"Choice" is taken away from customers all the time. If someone is on an individual health insurance plan they can't usually switch to another carrier if they develop a health condition. Auto insurance customers can't switch insurance companies at the same competitive rate if they get some speeding tickets, cell phone carriers make customers lock-in to a contract in exchange for a reduced price on their cellphone, once you buy a car, a car payment with the finance company is non-negotiable. You can't lease a certain type of car and then take it back and exchange it for another without incurring additional financial consequences, when a customer buys a house their locked in to a school district unless they want to pay for private school or move, when you lease an apartment or building you're locked into the terms of the lease, this happens all the time.

 

[jdeasy]

Without writing a novel, sure, but the answer to your question is more than a few sentences. Again, I don't agree with the way lock-in is administered now, but as a concept it makes sense. MA plans only change once each year, so why shouldn't they make an informed decision about what plan is best for them and stay with it until the plans change again? One answer is that their health conditions change and they need a "better" plan, meaning one with richer benefits. If that's the reason they want to change plans, it's going to penalize the plan they're switching too for offering better benefits. If insurers offering rich benefits take enough loses then it will reduce the benefits for the next year which means that the beneficiaries won't be offered plans with as attractive benefits. That's one reason, another reason why an annual enrollment period helps beneficiaries is it limits the amount of time throughout the year they're being bombarded with advertising.
Another reason eliminating lock-in would hurt seniors is it would encourage sloppy enrollment behaviors. The financial stability of an insurance company relies on it's ability to spread similar risk over a homogenous group of insureds. If people are enrolling in and out plans frequently then it puts a strain on the system.
A fourth reason why eliminating lock-in would hurt beneficiaries is from an administrative perspective. Before lock-in existed some seniors were changing their plans on a monthly/semi-monthly basis and the result was that Medicare wouldn't know what plan they were in enrolled in at a given time until months down the road. That becomes a logistical nightmare from a billing/reconciliation perspective and generates additional costs in the utilization of healthcare dollars that weren't their before.
I'd think it naive to believe there was one solution for everything, but the concept of lock-in does have some value.




What you, along with most other agents, are entirely missing is that there is a cost associated with insuring these members. Sure, you can switch your car insurance, but they're going to underwrite your policy and rate you accordingly. Depending on your driving history a company might entirely decline the opportunity to insure you if they don't feel it's good piece of business. MA plans don't have the option of denying coverage because it's all but guaranteed issue.

If everyone altruistically wanted to do what's best for the beneficiaries then the government would self insure the risk, make carriers bid on offering administration only contracts, and hold agents more accountable for enrolling seniors in plans that clearly aren't a good fit for them or other negligent behavior.
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I'm not claiming the sky is falling, what I've said is it will affect loss ratios which usually translates into a reduction of benefits. I believe that the sales management laughed at it, but it's the finance and accounting staff along with medical directors that would be the ones with the concern.



This is where I keep coming back to the willful ignorance. Lock-in also makes companies that don't offer rich benefits pay huge claims that would otherwise get pinned on "good" carriers that offer solid benefits to their members. If an MA plan get's stuck paying for enough big ticket treatments on new members, they'll have to stop offering benefits that are so competitive because they'll end up realizing they're losing money by doing so. How does that not hurt the customers in the years to come?

"Choice" is taken away from customers all the time. If someone is on an individual health insurance plan they can't usually switch to another carrier if they develop a health condition. Auto insurance customers can't switch insurance companies at the same competitive rate if they get some speeding tickets, cell phone carriers make customers lock-in to a contract in exchange for a reduced price on their cellphone, once you buy a car, a car payment with the finance company is non-negotiable. You can't lease a certain type of car and then take it back and exchange it for another without incurring additional financial consequences, when a customer buys a house their locked in to a school district unless they want to pay for private school or move, when you lease an apartment or building you're locked into the terms of the lease, this happens all the time.

Can you explain why the LIS folks that do not have have lock-in don't change their plans? They are a few that change occasionally, but, even that is rare. Where do you get your sky is falling mantra when it doesn't happen in the real world?

 

[Josh]

Can you explain why the LIS folks that do not have have lock-in don't change their plans? They are a few that change occasionally, but, even that is rare. Where do you get your sky is falling mantra when it doesn't happen in the real world?

I'm not saying the sky is falling, what I've said is it will affect loss ratios which could easily result in a reduction of benefits. When plans are doing their benefit designs they specifically try to create plans that are unattractive to unhealthy people or those who may need to use their benefits for more than a few doctors visits and a couple of prescriptions.
Where are your LIS enrollment numbers? Without looking at the same numbers you're looking at, it's difficult to tell. One reason why the LIS members might not be changing their plans is because they have state subsidies and their out of pocket costs on healthcare could be funded 100% so it makes no difference to them personally which plan they're on. If you're talking about other LIS eligibles, it could be the result of them not being aware of their ability to change plans or them not having a drastic change in their healthcare needs.
The MA program, as it sits now, would have to go out of it's way to be run more inefficiently. What Medicare is really doing is buying GI individual health insurance for seniors who want it. Fully insured GI coverage is the most expensive way to finance the cost of healthcare and that's exactly what the government is doing.

If my theory is that companies that offer the least competitive benefits get rewarded by not having to pay big claims, there should be evidence of that now, right? A few quick questions:

What company has the most MA members in the country?
Are their benefits generally the most competitive?
How profitable is their book business?

The answer to the first question, hands down, is UHC followed by Humana.
The answer to the second, not really. Across all of the markets I've worked in, reviewed, or had agents in UHC rarely had a product that was competitive unless it was a SNP product. Even at that, the "chronic care" plans usually had weaker benefits than any of the other plans, even if they were competing against another health insurance giant like Aetna.
Question three, profitability. If the Medicare arm of UHC was it's own entity it would make the Fortune 500 on it's own. Even before the Medicare Modernization Act of 2003 UHC was doing well with it's MedicareComplete products in markets carriers wouldn't have dreamed of going into until the reimbursements were adjusted and lock-in was instituted.
http://www.kff.org/medicare/upload/2052-12.pdf
It would appear that UHC (along with many other carriers) has developed the strategy of offer a plan that has so many holes and gaps in coverage on it that if we ever get a member, it's guaranteed to be a moneymaker. With any extra money they'd be using to pay claims, they took a portion of that and used it for marketing. Whenever a member got upset because they realized the plan they enrolled in had lousy benefits, UHC was more than glad to let the member walk to another plan as soon as the member was able, and then avoid paying the majority of the big ticket claims. It's genius, it really is, but it's taking Medicare dollars and giving them to insurance companies who have little intention on paying claims, and then letting a company that offers more comprehensive benefits take a bath on a new member as a penalty for doing the right thing. Why should Medicare dollars to go private health insurers that don't offer competitive plans at the expense of health insurers that want to provide the coverage, albeit for a slimmer profit margin? Why don't we dump lock-in and then just have Medicare pay carriers a small admin fee each month and then when a claim comes through let the health plan use Medicare dollars to pay for the claim so that America isn't fully insuring the risk on over 10 million seniors. Odds are that type of reform would be good for the members and would result in significant savings over the current program.

 

[jdeasy]

I'm not saying the sky is falling, what I've said is it will affect loss ratios which could easily result in a reduction of benefits. When plans are doing their benefit designs they specifically try to create plans that are unattractive to unhealthy people or those who may need to use their benefits for more than a few doctors visits and a couple of prescriptions.
Where are your LIS enrollment numbers? Without looking at the same numbers you're looking at, it's difficult to tell. One reason why the LIS members might not be changing their plans is because they have state subsidies and their out of pocket costs on healthcare could be funded 100% so it makes no difference to them personally which plan they're on. If you're talking about other LIS eligibles, it could be the result of them not being aware of their ability to change plans or them not having a drastic change in their healthcare needs.
The MA program, as it sits now, would have to go out of it's way to be run more inefficiently. What Medicare is really doing is buying GI individual health insurance for seniors who want it. Fully insured GI coverage is the most expensive way to finance the cost of healthcare and that's exactly what the government is doing.

If my theory is that companies that offer the least competitive benefits get rewarded by not having to pay big claims, there should be evidence of that now, right? A few quick questions:

What company has the most MA members in the country?
Are their benefits generally the most competitive?
How profitable is their book business?

The answer to the first question, hands down, is UHC followed by Humana.
The answer to the second, not really. Across all of the markets I've worked in, reviewed, or had agents in UHC rarely had a product that was competitive unless it was a SNP product. Even at that, the "chronic care" plans usually had weaker benefits than any of the other plans, even if they were competing against another health insurance giant like Aetna.
Question three, profitability. If the Medicare arm of UHC was it's own entity it would make the Fortune 500 on it's own. Even before the Medicare Modernization Act of 2003 UHC was doing well with it's MedicareComplete products in markets carriers wouldn't have dreamed of going into until the reimbursements were adjusted and lock-in was instituted.
http://www.kff.org/medicare/upload/2052-12.pdf
It would appear that UHC (along with many other carriers) has developed the strategy of offer a plan that has so many holes and gaps in coverage on it that if we ever get a member, it's guaranteed to be a moneymaker. With any extra money they'd be using to pay claims, they took a portion of that and used it for marketing. Whenever a member got upset because they realized the plan they enrolled in had lousy benefits, UHC was more than glad to let the member walk to another plan as soon as the member was able, and then avoid paying the majority of the big ticket claims. It's genius, it really is, but it's taking Medicare dollars and giving them to insurance companies who have little intention on paying claims, and then letting a company that offers more comprehensive benefits take a bath on a new member as a penalty for doing the right thing. Why should Medicare dollars to go private health insurers that don't offer competitive plans at the expense of health insurers that want to provide the coverage, albeit for a slimmer profit margin? Why don't we dump lock-in and then just have Medicare pay carriers a small admin fee each month and then when a claim comes through let the health plan use Medicare dollars to pay for the claim so that America isn't fully insuring the risk on over 10 million seniors. Odds are that type of reform would be good for the members and would result in significant savings over the current program.

This is your argument for lock-in? And, you have the audacity to call others ignorant??