Medicare and Large Group Health Plan

[tommyl]

What is the name of your state? What is the name of your state? FL

My sister, who is on LTD from a large company and SS Disability, pays a premium and chooses an option for her large group health coverage. Recently, she became Medicare eligible and Medicare is now her primary provider. Her large group health plan is the secondary provider. That would not be a problem to her if her health plan did not change as soon as she became Medicare eligible. Now, although she still pays the same premium, there is a $500 deductible, in addition to her Medicare deductible, and her coverage is not nearly the same as it was before she became Medicare eligible.

Previously, she paid only a co-pay for doctor visits--there was no deductible. Now, she not only has a large deductible to meet before her coverage kicks in, but she also has to pay a percentage rather than just a co-pay. In addition, she has a mental/psychiatric disability and Medicare only pays 50% of approved charges and her group health plan will only pay 50% of what Medicare does not pay. She previously paid $15 or $20 per psychiatrist visit. Another change is that her mental/psychiatric expenses, do not count toward her Out-of-Pocket Limit and there is now a limited number of psychiatrist visits per year which she did not have previously.

This is a devastating change for her as her disability payments only amount to about $15,500 a year. She is bipolar and has suicidal tendencies. Presently her psychiatric medication is no longer working for her and her psychiatrist is trying to find the proper combination of meds for her. I am really worried about her.

Her mental health problems are not the only health problem she has. She also has cardiac problems and back problems. She is only 51 years old; and according to what I have read, she is not even eligible to purchase a Medigap policy because of her age. Before this change, she was able to pay her insurance premium and her co-pays and receive the care that she needed. Now, I have no idea what is going to happen.

Adding to the frustration level is the fact that her benefits center told us that there is no summary of her benefits as they now relate to her. She was told to look at the plan she has now and omit all parts that pertain to In-Network, add the $500 deductible, etc. I thought that they have to supply the beneficiary with a summary of his/her plan. It is very difficult to even figure out exactly what her benefits are.

What do people in this situation do? Becoming Medicare eligible has changed my sister from a person who paid her insurance premium and received coverage that would allow her to receive the health care she needed, to a person who still pays the premium but can no longer afford the care she needs. It seems that anyone who is Medicare eligible or disabled is getting punished for that. Does anyone have any suggestions for someone in this position? What do people in this situation do?

Thank you.

 

[lkc15507]

tommyl,

First of all let me get to your ultimate question of what a person is to do in this situation. I certainly don’t have a “pat” answer or perhaps an answer at all, but I am going to make a couple of suggestions. (This is likely to be a two-post response.) After reading your post many times, some issues as you have presented do not make good sense to me. Working in the health insurance industry daily has exposed me to many common misunderstandings / interpretations that can be made. I want to point to a couple of areas where I suspect this may have happened in your / your sister’s case. Hopefully, these suggestions might result in a greater understanding of her Large Group Health Plan and whether continuing to pay the premium is of any value—usually dual coverage is a definite plus.

Next, I am not an expert, especially in Medicare, but I do work in the industry daily. Based on what you have provided, I want to clarify that I am making some Large Assumptions and everything I say is going to be geared from a usual / common basis—many factors I do not know may / likely will influence everything. The LGHP document is going to be the ultimate determining factor for the LGHP, and as for Medicare—well, they are Medicare—the government—they always make the rules when they are involved. For the groundwork: I am assuming by your information that the “option” you refer to is COBRA continuation. Also, I assume that your sister no longer works for the Large Group in any capacity, that the group health plan is in fact a Large GHP (i.e. 100 employees or more), that she does not have another GHP under which she may be covered by a working spouse. And, therefore, the determination that Medicare as the primary payer is correct. IF any part of that is incorrect, then I can supply a Medicare link that will provide excellent information for determining which is the primary payer.

That same link will also provide support for the following observation. The LGHP should be the same for your sister and for anyone else on the plan. LGHP’s do not provide ‘supplemental’ coverage for Medicare (not to my knowledge, but someone here may know an exception). Nor, can she be treated any differently under the LGHP because she is disabled and / or has Medicare (again, not to my knowledge, but someone here may know differently). Yet, it seems to me that this is your understanding of what is what has happened in your sister’s situation—i.e. her LGHP coverage changed when she became covered by Medicare. So, what I want to point out is what I suspect may be another possibility. A GHP can change / amend the plan terms. They may even implement these new terms retroactively. (That amount of time is limited. Also, if they do so in order to AVOID KNOWN claims, that is a real no-no.) Co-payments, co-insurance (the “percentage” or “out-of-pocket”), and deductibles are very common targets of these amendments. As health care costs continue to rise, plans commonly increase “patient responsibility” to help offset these rising costs to the plan. Perhaps this is what has happened in the case of your sister’s plan—an amendment applying to all employees that just happens to coincide with the timing of your sister’s disability determination. You (she) could ask for clarification of this from her HR department (note they probably will not talk to you because of privacy regulations). Otherwise, I’d be asking for an explanation of why her benefits differ from the rest of the company. Also, the plan has a period of time to make these types of amendments / riders available to the members. You are correct that they ultimately must do so when requested.

The next situation I want to suggest that you / your sister research thoroughly is the coordination of benefits (COB) section of the LGHP document. Many people assume that the secondary payer only considers the portion unpaid by the primary payer. However, that might not be the case. (I frequently still have to explain this concept to our own claims adjudicators and customer service personnel). Based on how her plan doc reads, the plan might very well consider the entire amount (not just the unpaid amount) in determining what is allowable before applying deductibles, co-insurance, and co-pays, with the resulting total payments not to exceed 100% of the bill. Clear as mud, huh? For example: If in the Mental Health benefits scenario you describe, Medicare pays 50% of the allowable charges, which are say $500, ($250 payment), rather than pay only 50% of $250, the LGHP may consider the entire $500 eligible under their plan and pay 50% of that—i.e. another $250, rather than $125. (Keep in mind it is possible that the LGHP may consider a service ‘allowable’ that Medicare does not and vice versa.) That is VERY simplified, and under both payers, ineligible amounts, and all “patient responsibility” provisions would be applied first. The ultimate point being that you should look carefully at the COB language of the LGHP document to find out how they determine the “allowable amount”. COB and secondary coverage are meant to significantly reduce the patient’s out-of-pocket liability without allowing the insured to “profit” by collecting more than the amount of the original bill. Most of my experience with COB results in 100% / near 100% payment of the total claims--especially when both payers offer few medical limitations or exclusions. A secondary plan, for which one pays premiums, would (in my opinion) be of little or no value unless this were the ultimate result. Of course that depends entirely on the total amount of health care claims, premiums, ultimate out-of-pocket etc.

So, based on these observations of the information you supplied, I would:

1.) Make sure that the determination of Medicare as primary payer is correct. (Believe me, this is a common mistake—just ask any claims adjudicator who has re-processed a year’s worth of claims because Medicare hammers them for processing secondary when they should have been primary. You can bet your sweet bippy that if Medicare is a payer, they make—and eventually enforce—the rules, unless of course it costs them money.)
2.) Get someone (impartial) who has good knowledge to help you (wish I could tell you whom to ask). Do not solely rely on what the LGHP (or even a Medicare representative) tells you. On any given day, you may talk to someone who has knowledge or you may talk to a total idiot. (Given whether my interpretation of the info you have supplied is anywhere near correct, I may be in this category!)
3.) Read the LGHP document thoroughly, concentrating on the areas of Coordination of Benefits plan language and whether the LGHP is applying the same rules to your sister as all other employees (all aspects of the plan).
4.) After all that, determine if premiums for the LGHP (especially if secondary) plus all other out-of-pocket costs are truly worth the premium / coverage provided, and act on that determination (be sure—once you drop COBRA, you won’t get it back).
5.) Realize that if the “option” you spoke of is COBRA, the maximum--with disability—extension that she can keep it is 29 months (absolute max with other circumstances could be 36 months). Therefore, she is likely to end up solely dependent on Medicare ultimately. Given that, I think she should explore other options like Medicaid, other state / federal programs or returning to employment. A social worker would be a good resource. Perhaps her mental health provider could hook her up with a SW, if not, maybe hire one. Also make sure that she is enrolled / does enroll in Medicare Part B too.
6.) If you haven’t already, visit web sites for Medicare (Centers for Medicare and Medicaid Services), the Department of Labor and / or her state’s Dept of Ins.—(depending on whether self-insured plan, fully insured plan, ERISA / non-ERISA etc etc—‘a whole nother’ factor I never touched), and also look into the Mental Health Parity Act. (Make sure unfair limitations are not being applied to her mental health benefits. Based on what you supplied, I have no reason to think so, but you guys have all the facts, I do not.)

Very last, please, please understand that I make these observations based on very limited information and knowledge of all the facts. These are suggestions only. Knowledge is power and only you / your sister has the power to find out all the options / facts. I hope the very, very best for her and truly feel for her situation. Mental health is such a difficult area—both medically and in the insurance realm. Frankly, I am amazed that she obtained a mental health disability determination. That is not something that is common.

Lkc15507