New York Elder Law Attorney Blog

The Trump Administration recently announced its intention to give private Medicare plans the power to negotiate drug prices with insurance companies in hopes of lower the the costs of vital medicines that seniors rely on to live healthier lives. Currently, private Medicare health plans under Medicare Part D must cover all or “substantially all” drugs in six “protected” classes, such as HIV treatments, antidepressants and cancer drugs, regardless of cost.

The Administration’s stance is that because insurance companies are required by their agreements with the Centers for Medicare and Medicaid Studies (CMS) to fully cover these medications, there is little incentive for the pharmaceutical companies that produce these drugs to lower prices for consumers. Part of the proposal would allow health insurance plans to exclude some of the protected drugs that see prices increases beyond the pace of inflation and new formulations not considered a “significant innovation” compared to the original.

“The lack of any ability for Part D plans to manage drugs in the protected classes has allowed the pharmaceutical industry to command high prices on protected class drugs in Part D, without patients getting a good deal,” Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement.

New York City has seen a rapid increase in the number of individuals working as in home health aides as the city’s population continues to age. Unfortunately, many of these in home health service workers are older people themselves, earning low wages and relying on government services to survive as their own health continues to decline from performing hard work and aging.

Naturally, most seniors wish to preserve their independence and often turn to home health workers to perform cooking, cleaning, and other chores that may be more difficult at an advanced age. Home health workers are vital to the healthcare needs of seniors who do not need or wish to enter into a nursing home or other skilled care facility before it may be necessary or otherwise not cost feasible for any reason.

Experts studying the issue describe New York’s impoverished home health aides as a new underclass, often working long hours without prospects of  finding new and better paying work outside their current field. Sources calculate that some of these employees work for at little as $7 to $8 per hour, adding up to around $25,000 which does not even get close to a living wage in New York City.

Of the almost 60 million Medicare beneficiaries in the entire United States, nearly one-third of those individuals are covered by a Medicare Advantage Plan, an alternative to Medicare insurance offered by private companies contracting with the government and offering all Part A and Part B benefits. Federal officials estimate that number is expected to grow as high as 41 percent nationally over the next ten years but some states already see enrollment rates that high.

In states like California and Florida, Medicare Advantage plans are employing something known as global risk or full risk to help curb the skyrocketing costs of health care while creating financial incentive for providers to take the very best care they can of their patients. In those states, about half of Medicare Advantage plan members get care under the global risk model, compared to an estimated 10 percent nationally.

Under total risk arrangements, the insurance plan give health care companies the bulk of their Medicare funding when they take on the mantle of being financially responsible for all patient care. For the physicians groups, the arrangement means they get paid a large amount of money upfront for patient care and do not have to worry about billing issues or waiting for insurers to pre-approve medical procedures and treatments. Patients benefit by being able to spend more time with their doctors to get all the care they need and can usually get same day or next day appointments.

The White House recently issued new guidelines to states on acceptable alternative health care plans allowed under the Affordable Healthcare Act (ACA) that will allow states to apply for waivers and help shore up health care exchanges. Until now, such waivers were granted with so-called “guardrails” to ensure the waivers met at least the same coverage level as under the ACA.

By contrast, the new guidances issued by the White House allow states to loosen old guardrail requirements and allow healthcare plans that do not meet the coverage standards required under current federal law, including charging higher premiums for people with pre-existing conditions. The change in policy is a victory for states with conservative legislatures which were unable to gain such waivers under the previous administration because the suggested plans did not meet federal requirements.

“States know much better than the federal government how their markets work. With today’s announcement, we are making sure that they have the ability to adopt innovative strategies to reduce costs for Americans, while providing higher quality options,” Centers for Medicare and Medicaid Administrator Seema Verma said in a statement.

When open enrollment begins for Medicare, many seniors across the country will notice an expanded range of health care plan options, including those offered by private insurance companies through Medicare Advantage. With more Americans than ever considering and signing up for these Medicare alternatives, more insurance companies than usual are selling more Medicare Advantage plans for 2019, some offering lower or no premiums and improved benefits.

According to the Centers for Medicare and Medicaid Studies (CMS), an additional 14 new insurance companies will sell 3,700 plans for 2019, an estimated 600 more than offered to beneficiaries in 2018. CMS estimates that total enrollment for Medicare Advantage plans will grow to 23 million people in 2019, a 12 percent increase over the previous year and may grow to serve one-third of all Medicare enrollees in the next decade.

Medicare Advantage plans have been attractive to seniors due to the extra benefits these types of coverage options offer. Many of these private insurance plans can save seniors money because premiums, deductibles, and additional costs are lower than what beneficiaries pay with original Medicare offered by the federal government. One of the main downsides to Medicare Advantage Plans is that they require enrollees to seek care within a restricted network of health care providers.