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Maximize Your Medicare Newsletter
February 9, 2019
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Medicare Section

Time is Running Out

The Medicare Open Enrollment Period is ending at the end of March. During this period:

  • Switch Medicare Advantage plans from "Plan X" to "Plan Y."
  • Cancel Medicare Advantage and return to Part A and Part B alone, and select a Part D plan. For those that want to switch to Medigap, this works, but remember that Medigap acceptance must be done FIRST. Not doing so = risk that you get rejected, and that you are stuck with Part A and Part B, without additional coverage.
  • Enroll in Part B, if you missed the enrollment deadlines for Part B
  • You cannot switch Part D plans
  • You cannot switch from Part D alone to Medicare Advantage.

Outpatient Hospital Stays and Services

Anecdotally, the trend towards outpatient services seems to be growing. Joint replacement is the simplest example. It used to be that people would receive a joint replacement, and stay over 3 midnights, which would qualify as inpatient hosptial stay. Those days are now long gone. And it is not the only example.

Is this an Unintended Consequence of the Two-Midnight Rule?
Not clear, but we have received a notable increase in questions about how a joint replacement surgery, and a two-day hospital stay are handled by Medicare. Part A involves two criteria, not one. You must not only admitted as "inpatient," but it must also cross 3 midnights in order to qualify for Part A benefits.

Medigap Has This Un-fixable Hole
Medigap will pay, but only if Medicare Part A or Part B pay first. That means that if original Medicare does not pay, then Medigap carriers are not going to pay the balance. However, if you are charged under Medicare Part B, you will be responsible for the Part B deductible, and then Medigap will pay for the balance. That is the way it "should" work, but there are reports that Medicare is refusing to pay under Part B, in which case Medigap will not help.
The solution here is to specifically ask if the rehabilitation / skilled nursing care that you receive is covered under Medicare Part A OR Medicare Part B. If the answer is yes, then Medigap will pay. If the answer is no, then Medigap will not.

Medicare Advantage? Maybe.
In most cases, Medicare Advantage will also require a three-day inpatient hospital stay in order to qualify for the subsequent skilled nursing care. However, there are some plans that have widened their benefits so that you do not need to stay for three days. Note that this can be meaningful, so that if you know that you will require this, it can be a reason to switch Medicare Advantage plans.
Note that you will need to be very careful here. Most Medicare Advantage plans do NOT include this extra "carve out," and there may be additional requirements (e.g. pre-authorization) in order to qualify for this.

Why is This Happening?
Certainly hospitals can judge that its reimbursement under Part A is insufficient, and therefore the incentive can exist to reduce the amount of time spent at the hospital. Further, the two-midnight rule states that if you cross over two midnights, then you are presumed to be admitted as inpatient. Hospitals are audited by the CMS, and if re-admission rates are too high, then they can be severely penalized. There is the natural incentive, although it must be noted that there are studies that state that this is not the case.
Further, the provider (doctor) can also have the same incentive, i.e. reimbursement rates under Medicare and Medicare Advantage may provide incentives for the doctor to perform procedures on an outpatient basis. That would reduce the costs to Medicare and Medicare Advantage.
Note: these are possible and still hypothetical, you can stay tuned for the policy wonks to weigh in shortly.
Newsworthy (relatively speaking)
  • Employer groups rally behind proposed Trump prescription drug pricing rule (link). Comment:  Is this as good as Most Favored Nations, which is my thought in "How to Fix Health Insurance Markets"? No. But, any improvement in transparency helps.
  • )Johnson & Johnson to disclose drug list prices in TV ads (link). Comment: the same comment as the previous point, any improvement helps, but that doesn't stop pharmaceuticals from cutting side deals.
  • Illinois’ other debt disaster: $73 billion in unfunded state retiree health insurance benefits (link). Gulp.
  • Harris dives into 'Medicare for all' minefield (link). Most instructive? "While nearly every Democratic lawmaker now says they believe in the eventual goal of Medicare for all, the party is far from united on how to get there." Ah, like the point #3 noted weeks ago. Note: the author of a certain book would be well-served by an age division spans an extra 10 years (ahem).
  • Poll: Support for 'Medicare-for-all' fluctuates with details (link). Comment:  The article states 70% like the idea, until it is revealed that it will involve higher taxes, and then? 37% like the idea. 
Books I Wish That I Had Written
The Ripple Effects Has Still Not Played Out in Full
Some people argued, at that time, that the federal government shouldn't have aided AIG (the investment arm, not the insurance carrier). Some people didn't know that banks would not lend money OVERNIGHT to major companies (Fortune 50). 
Actual emergencies require emergency measures, I'll ride with that explanation, and this is book very good at describing that period of time.
By the way, the ripple effects are still being felt today, because the cost of concentrated central bank coordination is still unknown.
GH2 Unfiltered
Deep in the Heart of Texas
The stars at night, are clean and bright..."

We begin in Texas, where over 30,000 retirees have left the state-sponsored teacher retiree health plan (link). There is a new video with a review of the official documents (it is publicly available information). Further, this has VERY POWERFUL IMPLICATIONS for all retirees of government entities. Your location is irrelevant; it is no understatement to say this will be a challenge that will need to be addressed at some point. It is a question of when, not if.

This a new, separate, subscription-only site.  The annual cost is $19.99, the 50% discount code for the first year is "Valentine" and will expire on February 16th at midnight.
  • New: TRS of Texas Deepdive
  • New Audio: Can a Spouse of Retiree in Group plan >> Can he/she cancel and enroll in Medigap?
A more complete description of GH2 Unfiltered can be found by clicking the button (it doesn't obligate you), or the YouTube video. There is virtually an endless list, this is not even the 1st inning.
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