Changes To Part D Under The Inflation Reduction Act
With the passage of the Inflation Reduction Act, which includes several provisions to lower prescription drug spending by Medicare and beneficiaries, major changes are coming to the Medicare Part D program. These provisions will phase in over the next several years starting in 2023. The law:
- requires drug manufacturers to pay a rebate to the federal government if prices for drugs covered under Part D and Part B increase faster than the rate of inflation, with the initial period for measuring Part D drug price increases running from October 2022-September 2023
- adds a hard cap on out-of-pocket drug spending under Part D by eliminating the 5% coinsurance requirement for catastrophic coverage in 2024 and capping out-of-pocket spending at $2,000 in 2025
- shifts more of the responsibility for catastrophic coverage costs to Part D plans and drug manufacturers, starting in 2025
- limits the price of insulin products to no more than $35 per month in all Part D plans and makes adult vaccines covered under Part D available for free, as of 2023, and
- expands eligibility for full benefits under the Part D Low-Income Subsidy program in 2024.
CBO estimates that the drug pricing provisions in the law will reduce the federal deficit by $237 billion over 10 years .
About Half Of All Medicare Advantage Enrollees Would Incur Higher Costs Than Beneficiaries In Traditional Medicare For A 7
Medicare Advantage plans have the flexibility to modify cost sharing for most services, subject to limitations. Total Medicare Advantage cost sharing for Part A and B services cannot exceed cost sharing for those services in traditional Medicare on an actuarially equivalent basis. Further, Medicare Advantage plans may not charge enrollees higher cost sharing than under traditional Medicare for certain specific services, including chemotherapy, skilled nursing facility care, and renal dialysis services.
Medicare Advantage plans also have the flexibility to reduce cost sharing for Part A and B benefits, and may use rebate dollars to do so. According to MedPAC, in 2022, about 43 percent of rebate dollars were used to lower cost sharing for Medicare services.
In the case of inpatient hospital stays, Medicare Advantage plans generally do not impose the Part A deductible, but often charge a daily copayment, beginning on day 1. Plans vary in the number of days they impose a daily copayment for inpatient hospital care, and the amount they charge per day. In contrast, under traditional Medicare, when beneficiaries require an inpatient hospital stay, there is a deductible of $1,556 in 2022 with no copayments until day 60 of an inpatient stay .
Free & Secure Medicare Account
Create an account to access your Medicare information anytime. You can also:
- Add your prescriptions and pharmacies to help you better compare health and drug plans in your area.
- Sign up to get your yearly “Medicare & You” handbook and claims statements, called “Medicare Summary Notices,” electronically.
- View your Original Medicare claims as soon as they’re processed.
- Print a copy of your official Medicare card.
- See a list of preventive services you’re eligible to get in Original Medicare.
- Learn about your Medicare premiums, and pay them online if you get a bill from Medicare.
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Whats A Summary Of Benefits And Coverage
Maybe youve heard the term, Summary of Benefits and Coverage also called SBC. Its often talked about when it comes to choosing health plans and learning about costs. Thats because its basically a document that outlines whats covered and not covered under a health plan.
All health plan companies are required to provide an SBC for each of their different plans. When youre making decisions about buying a plan or using your benefits, an SBC can be a useful tool to help you compare costs and understand coverage options.
Summary Of Benefits & Coverage & Uniform Glossary
Under the Affordable Care Act, health insurers and group health plans will provide the 180 million Americans who have private insurance with clear, consistent and comparable information about their health plan benefits and coverage. Specifically, the regulations will ensure consumers have access to two forms that will help them understand and evaluate their health insurance choices. The forms include:
- An easy-to-understand summary of benefits and coverage
- A uniform glossary of terms commonly used in health insurance coverage such as “deductible” and “co-payment”
You can access the forms discussed here in the section.
The package of materials posted also includes an example of a completed summary of benefits and coverage, uniform glossary, as well as specific technical information for simulating coverage examples for two benefits scenarios: having a baby and managing type 2 diabetes.
Summary Of Benefits And Coverage And Uniform Glossary
As of September 23, 2012 or soon after, health insurance issuers and group health plans are required to provide you with an easy-to-understand summary about a health plans benefits and coverage. The new regulation is designed to help you better understand and evaluate your health insurance choices.
The new forms include:
- A short, plain language Summary of Benefits and Coverage, or SBC
- A uniform glossary of terms commonly used in health insurance coverage, such as “deductible” and “copayment”
All insurance companies and group health plans must use the same standard SBC form to help you compare health plans. The SBC form also includes details, called coverage examples, which are comparison tools that allow you to see what the plan would generally cover in two common medical situations. You have the right to receive the SBC when shopping for or enrolling in coverage or if you request a copy from your issuer or group health plan. You may also request a copy of the glossary of terms from your health insurance company or group health plan.
Summary Of Benefits And Coverage
Under the law, insurance companies and group health plans will provide consumers with a concise document detailing, in plain language, simple and consistent information about health plan benefits and coverage. This summary of benefits and coverage document will help consumers better understand the coverage they have and, for the first time, allow them to easily compare different coverage options. It will summarize the key features of the plan or coverage, such as the covered benefits, cost-sharing provisions, and coverage limitations and exceptions. People will receive the summary when shopping for coverage, enrolling in coverage, at each new plan year, and within seven business days of requesting a copy from their health insurance issuer or group health plan.
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Nearly 7 In 10 Medicare Advantage Enrollees Are In Plans With No Supplemental Premium In 2022
In 2022, nearly 7 in 10 beneficiaries are in zero-premium individual Medicare Advantage plans with prescription drug coverage , and pay no premium other than the Medicare Part B premium . The MA-PD premium includes both the cost of Medicare-covered Part A and Part B benefits and Part D prescription drug coverage. In 2022, 87% of Medicare Advantage enrollees in plans open for general enrollment are in plans that offer prescription drug coverage.
Altogether, including those who do not pay a premium, the average enrollment-weighted premium in 2022 is $18 per month, and averages $11 per month for just the Part D portion of covered benefits, substantially lower than the average premium of $40 for stand-alone prescription drug plan premiums in 2022. Higher average PDP premiums compared to the MA-PD drug portion of premiums is due in part to the ability of MA-PD sponsors to use rebate dollars from Medicare payments for benefits covered under Parts A and B to lower their Part D premiums, which according to the Medicare Payment Advisory Commission , are $300 per enrollee annually in 2022.
For the remaining 31% of beneficiaries who are in plans with a MA-PD premium , the average premium is $58 per month, and averages $35 for the Part D portion of covered benefits slightly lower than the $40 monthly PDP premium.
Electronic Medicare & You Handbook
The eHandbook is an electronic version of your trusted “Medicare & You” handbook. You can help Medicare save tax dollars by switching to the eHandbook. We’ll email you a link to the online PDF version of “Medicare & You” instead of sending you a paper copy each fall. If you want to get your next fall handbook electronically, sign up by May 31st.
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Most Medicare Advantage Enrollees Have Access To Some Benefits Not Covered By Traditional Medicare In 2022 And Special Needs Plan Enrollees Have Greater Access To Certain Benefits
Medicare Advantage plans may provide extra benefits that are not available in traditional Medicare. The cost of these benefits may be covered using rebate dollars paid by CMS to private plans. In recent years, the rebate portion of federal payments to Medicare Advantage plans has risen rapidly, totaling $432 per enrollee annually for non-Medicare supplemental benefits, a 24% increase over 2021. The rise in rebate payments to plans is due in part to incentives for plans to document additional diagnoses that raise risk scores, which in turn, generate higher rebate amounts that make it possible for plans to provide extra benefits. Plans can also charge additional premiums for such benefits, but most do not do this. Beginning in 2019, Medicare Advantage plans have been able to offer additional supplemental benefits that were not offered in previous years. These supplemental benefits must still be considered primarily health related but CMS expanded this definition, so more items and services are available as supplemental benefits.
Using An Sbc To Compare And Shop For Plans
The SBC was created to make it easier to compare and shop for health plans. Whats especially helpful is that every health plan has to use the same outline to show the costs and coverage for each of the plans they offer.
Because its all in the same format, its easier to make apples-to-apples comparisons when youre deciding which plan is best for you. You can use the SBC to compare prices, benefits and other health plan options and features that might be important to you.
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Issues For The Future
Since its inception, the Medicare drug benefit has helped to limit growth in average out-of-pocket drug spending by Medicare beneficiaries enrolled in Part D plans. More recently, however, a combination of factors, including rising drug prices, more plans charging coinsurance rather than flat copayments for covered brand-name drugs, and annual increases in the out-of-pocket spending threshold, has increased the out-of-pocket cost burden faced by some enrollees, especially those with high drug costs.
Provisions in the Inflation Reduction Act that will be rolling out over the next several years are designed to address several concerns related to Part D, including the lack of a hard cap on out-of-pocket spending for Part D enrollees the inability of the federal government to negotiate drug prices with manufacturers the significant increase in Medicare spending for Part D enrollees with high drug costs prices for many Part D covered drugs rising faster than the rate of inflation and the relatively weak financial incentives faced by Part D plan sponsors to control high drug costs. Understanding how well Part D continues to meet the needs of people on Medicare as the laws various provisions are implemented will be informed by ongoing analysis of the Part D plan marketplace, formulary coverage and costs for new and existing medications, and trends in Medicare beneficiaries out-of-pocket drug spending.
Uniform Glossary Of Terms
Thanks to the Affordable Care Act, consumers will also have a new resource to help them understand some of the most common but confusing jargon used in health insurance. Insurance companies and group health plans will be required to make available upon request a uniform glossary of terms commonly used in health insurance coverage such as deductible and co-payment. To help ensure the document is easily accessible for consumers, the Departments of Health and Human Services and Labor will also post the glossary on the new health care reform website, www.HealthCare.gov – Opens in a new window and www.dol.gov/ebsa/healthreform – Opens in a new window.
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Health Net Of Arizona Inc Communitycare Hmo
The predictability of our HMO plans with the flexibility to see in-network specialists without a referral for certain professional services. Available for small businesses in Maricopa, Pima and Pinal counties.
HSA-compatible plans offer advantages of coverage with the tax-savings potential of a health savings account. It’s one way to take more control over your health care dollars.
Rates & Employer Contributions
Employer Contribution Amounts
Active State Members
Below are the contribution rates. Your cost is any amount above the employer contribution. Active subscribers are subject to the 80-80 or 85-80 formula. Active subscribers should contact their employer to inquire which formula applies to their bargaining unit.
CalPERS Health Program
*CoBen is the employer-provided benefit allowance for employees in bargaining units 2, 7, 8, 16, 17, 18, and 19, and excluded employees, to offset the cost of health, dental, and vision benefits. For more information, visit CalHR. Check with your employer to determine your contribution amount.
Active CSU Members
CalPERS 2023 Statewide COBRA Health Premiums
Effective Date: January 1, 2023COBRA premiums are calculated at 102% of the Basic premiums, but some carriers may charge less than these maximum amounts.
|Anthem Blue Cross Del Norte EPO||$1,105.57|
|Anthem Blue Cross Select HMO||$921.93|
|Anthem Blue Cross Traditional HMO||$1,138.98|
|Health Net Salud y Más||$644.53|
Since health care costs vary throughout California, regional pricing adjusts premiums to reflect the actual cost of health care in your specific region. This ensures that your CalPERS premiums are appropriate and competitive for where you live.
To find your specific health plan premium rates, choose your region from the options below:
CalPERS 2023 Public Agencies and Schools COBRA Health Premiums
Employer Contribution Amounts
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Finding The Information You Need
Theres a lot of information in an SBC. Even though its meant to make the information easier to understand, it can seem like a lot at first. Every SBC is created with four double-sided pages and 12-point type.
Heres a step-by-step look at what information is in an SBC:
- An overview of whats covered
- An explanation of whats not covered and/or the limits on coverage
- Information on costs you might have to pay like deductibles, coinsurance and copayments
- Coverage examples, including how coverage works in the case of a pregnancy or a minor injury
- A reminder that the SBC is only a summary. To get all the details, youll want to look at complete health plan documents.
- Information about where to go online to review and print copies of complete health plan documents
- Where to find a list of network providers
- Where to find prescription drug coverage information
- Where to find a Glossary of Health Coverage and Medical Terms
- A contact number to call with questions
- A statement on whether the plan meets minimum essential coverage for the Affordable Care Act
- A statement that it meets minimum value
An Overview Of The Medicare Part D Prescription Drug Benefit
Medicare Part D is a voluntary outpatient prescription drug benefit for people with Medicare provided through private plans that contract with the federal government. Beneficiaries can choose to enroll in either a stand-alone prescription drug plan to supplement traditional Medicare or a Medicare Advantage plan, mainly HMOs and PPOs, that provides all Medicare-covered benefits, including prescription drugs . In 2022, 49 million of the 65 million people covered by Medicare are enrolled in Part D plans. This fact sheet provides an overview of the Medicare Part D program, plan availability, enrollment, and spending and financing, based on data from the Centers for Medicare & Medicaid Services , the Congressional Budget Office , and other sources. It also provides an overview of upcoming changes to the Part D benefit based on provisions in the Inflation Reduction Act.
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Since 2015 The Highest Share Of Medicare Advantage Enrollees Are In Plans That Receive High Quality Ratings
For many years, CMS has posted quality ratings of Medicare Advantage plans to provide beneficiaries with additional information about plans offered in their area. All plans are rated on a 1 to 5-star scale, with 1 star representing poor performance, 3 stars representing average performance, and 5 stars representing excellent performance. CMS assigns quality ratings at the contract level, rather than for each individual plan, meaning that each plan covered under the same contract receives the same quality rating most contracts cover multiple plans.
In 2022, nearly 9 in 10 Medicare Advantage enrollees are in plans with a rating of 4 or more stars, an increase from 2021 and the highest share enrolled since 2015. An additional 3 percent of enrollees are in plans that were not rated because they are in a plan that is too new or has too low enrollment to receive a rating. Plans with 4 or more stars and plans without ratings are eligible to receive bonus payments for each enrollee the following plan year. The star ratings displayed in the figure above are what beneficiaries saw when they chose a Medicare plan for 2022 and are different than what is used to determine bonus payments.
Where To Get An Sbc
You can request a copy of an SBC anytime. To get one, contact us. When you already have a health plan, youll get an SBC automatically at certain times:
- On the first day of open enrollment
- When you renew your health plan
- When changes happen within your health plan
- When you make a change or are added to a health plan for example if you get married, have a child, or experience another qualifying life event
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