September 21, 2018



In This Issue
Fast Facts
NAHU Joins Coalition to Oppose Single-Payer Healthcare
Senate Transparency Group Proposes Surprise Medical Billing Reform
Healthcare Happy Hour Podcast: How the Opioids Bill Could Impact Employer Healthcare Costs
House and Senate to Reconcile Employer Costs of Opioids Legislation
State Spotlight: Medicare Cost Plans Set to End on December 31, Primarily Affecting Seniors Primarily in Minnesota
Miss Yesterday’s Compliance Corner Webinar on COBRA? Watch It Now!
Register for NAHU’s Affinity Partner’s Webinar Next Tuesday
Are You Ready for Open Enrollment?
HUPAC Roundup: How Democrats Have Co-Opted the ACA in Political Ads This Election
What We’re Reading
E-mail the Editor
Visit the NAHU Website
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State Spotlight: Medicare Cost Plans Set to End on December 31, Primarily Affecting Seniors Primarily in Minnesota
Over 300,000 Minnesotans with Medicare cost plans must switch to a new policy due to a federal law discontinuing the coverage across much of the state next year. Insurers and the government have been sending notices to beneficiaries over the last couple of weeks about the transition, but full details on 2019 coverage options won’t be available until the open enrollment period begins next month.

Medicare cost plans were authorized by Congress in 1972 to ensure that Medicare beneficiaries in rural areas had access to private health plans choices. The main difference between Medicare cost plans and Medicare Advantage plans is the way they are reimbursed. Medicare cost plans are reimbursed by the Medicare program based on their reasonable costs, while Medicare Advantage plans are reimbursed through a risk-based payment. Essentially with Medicare Advantage, insurers receive set per-member, per-month payments that put insurers at risk if a beneficiary’s expenses exceed expectations. Conversely, cost plans are reimbursed based on their costs, with no set rate.

Congress had established a cost plan sunset date (which has been extended several times) when they enacted the Balanced Budget Act of 1997. In 2003, Congress established the “two plan test” when they passed legislation that would allow Medicare cost plans to remain indefinitely in areas where there are not two Medicare Advantage plans that meet certain enrollment thresholds. Most recently, Congress passed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) which essentially said that as of January 1, 2019, all carriers offering cost plans must discontinue that product in areas where at least two competing Medicare Advantage plans meeting specific enrollment thresholds are available.

In Minnesota, Medicare cost plans will be discontinued in 66 counties, with an estimated 300,000 plus losing coverage. Cost plans will continue in 21 counties that pass the “two plan test,” with no competition from Medicare Advantage plans. While Minnesota holds the highest number of cost plan enrollees, Wisconsin and Texas seniors will also be disproportionately affected by the cost plan phase out. Ultimately, a significant number of seniors will see their coverage be affected this fall and there will be a lot of stress for these consumers as they try to find coverage that has their doctor in-network and covers their medications. To ease the burden on seniors losing their cost plans, Representatives Erik Paulsen (R-MN-3) and Ron Kind (D-WI-3) introduced H.R. 6662, the Empowering Seniors’ Enrollment Decision Act of 2018. The legislation would give beneficiaries of cost plans more time to enroll in another Medicare coverage option, extending the Medicare open enrollment period to February. This would allow seniors transitioning out of cost plans more time to make an informed decision, and will also provide agents and brokers working with these consumers more time to appropriately assist the more than 300,000 seniors affected by this change.

NAHU recently sent a letter of support to both representatives in their efforts to minimize disruption to seniors whose cost plan coverage will be affected this fall. H.R. 6662 would allow more time for the agent of record to advise beneficiaries in selecting health care coverage that best meets their needs. The bipartisan legislation passed the House of Representatives last week with unanimous support. It now awaits action by the Senate having been referred to the Finance Committee at the start of the week.

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