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LOSING SUTTER MEDICARE

Losing Sutter Medicare

December 26, 2023

Thousands were at risk of losing Sutter Medicare coverage, as Essence Healthcare and United Healthcare closed out Medicare Advantage plans in Santa Clara and San Mateo counties at the end of 2023. While some found replacement medicare advantage plans, many consumers returned to traditional Medicare (Parts A and B) and purchased a supplemental medigap plan.

Access to Sutter Medicare coverage continues to frustrate members in the bay area and Northern California, as reported in previous articles.  It’s not just Sutter, in Southern California, two large medical groups are cancelling their contracts with Medicare Advantage plans. Locally, thousands of members could lose their current Sutter Medicare coverage, beginning January 1, 2024.

Losing Sutter Medicare

The plans affected included Medicare Advantage HMO products from Essence Healthcare and United Healthcare.  Prior to 2024, Essence Healthcare was the only medicare advantage individual (HMO) plan contracted with Stanford Healthcare (see associated story).

Traditional Medicare Part A and Part B

Were you one of the thousands impacted from losing Sutter Medicare coverage?  If you acted timely, your options included returning to traditional Medicare Parts A and B, and enrolling (with guaranteed acceptance eligibility) supplemental medigap insurance.

Proceed cautiously if you return to traditional Medicare unless you are assured approval for medigap: Without supplemental medigap protection, your Medicare copayment responsibility would be too great. Note: Another term for “medigap” is “medicare supplement insurance” (it’s unfortunate, but Medicare uses both terms interchangeably…confusing!).  Here are some features of Original Medicare:

  • According to the nonpartisan research group, KFF (formerly Kaiser Family Foundation), only 1% of physicians have opted out of traditional (original) Medicare.  The implication is clear:  Medicare beneficiaries have access to the vast majority of physicians across America.  This offers unmatched flexibility and control.
  • Original Medicare is also popular with individuals who wish to maintain control and choice over their providers.  For example, the flexibility to access specialists in more than one medical group and/or in different geographic regions.  Generally, this is not possible with “Advantage” HMO plans (although it could be possible with some Medicare Advantage PPO plans).

Medicare Advantage PPO

Consider if a Medicare Advantage PPO plan would solve your provider issues:  Options include i. getting help from an independent agent, ii. visiting medicare.gov, iii. phoning Medicare directly or iv. contacting each PPO plan directly.  Whichever resource you prefer, make sure your doctors have “in-network” status on the plan, otherwise, your out of pocket costs will be higher with Medicare Advantage PPO plans when you use non-network providers.

“You can also use out-of-network providers for covered services, usually for a higher cost, if the provider agrees to treat you and hasn’t opted out of Medicare (for Medicare Part A and Part B items and services).“ (Medicare ref: page 19):  https://www.medicare.gov/Pubs/pdf/12026-Understanding-Medicare-Advantage-Plans.pdf

If You Do Not Have An Agent

If you do not have an agent or if you bought your current policy directly from an insurance company, then we suggest you find a local independent agent who is familiar with major medical groups, such as the Stanford Health Care system or the Sutter system e.g. PAMF in the bay area.  Using a competent, experienced agent increases your probably of success, because the rules and the timing are complex.  Medicare is ever-changing, and once the current crisis has passed, you will probably need your agent in the future.

An alternative option for those who don’t want an agent is to phone Medicare for assistance.  They are open 24/7 at (800) 633-4227 or to attempt an application on your own at californiaenrollment.com.

Resources

 

 

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Sutter Health/ PAMF Limits Access For Some Patients Enrolled in Original Medicare

Guest Article By Marc Derendinger

“Key Finding:  Sutter/PAMF wants you to enroll in Medicare Advantage plans, and is turning away new patients on traditional (original) Medicare Parts A and B (including those covered by supplemental medigap insurance)”

(This story has been updated) The popular neighborhood social platform, Nextdoor, has been buzzing with stories of Palo Alto Medical Foundation (Sutter Health) limiting access to doctors for some Medicare beneficiaries.  Nextdoor is a social platform that connects neighbors.

What happened?  

PAMF offices are reportedly saying its doctors will not accept new patients who are on original Medicare Part A and B.  When pressed for details, one PAMF employee explained this policy is really not new, and has been in effect since January 2021.  

Will This Be A New Trend for Medical Groups?  -See our Commentary about the need to solidify doctor relationships before turning 65, as well as recent market disruption in Northern California for beneficiaries using Medicare at Stanford and Sutter Health

When pushed for details, the representative messaged a supervisor who confirmed the new rules and further explained “existing patients” are those who have been seen by their physician within the last three years.

This raises a serious question:  when your physician retires from the medical group, does this downgrade your status to “new patient?”

What doctors are saying…

Through chance, I met up with a PAMF physician earlier this summer who commented on a June 2021 staff meeting:  “Doctors were told they could no longer accept new Medicare patients, effective immediately.”  The reason cited was the amount of money Sutter/PAMF was losing on original Medicare patients (which was probably exacerbated by reduced procedures/visits during the pandemic).

The Sacramento Business Journal has also reported, March 4th 2021, on pending Sutter Health changes due to pandemic related losses.  Are these new access restrictions related?

>>>>>>>This story was updated on October 1st:

What professional insurance brokers are saying…

Conferring with local independent insurance agents who specialize in Medicare, the talk is how CMS (Medicare) has been applying pressure on Sutter Health in recent years, to shift more of their patients to Medicare Advantage Plans.  Why?  Agents say with these types of plans Medicare costs are lower and more predictable, and coverage is often better. “A win-win” situation, some say.

Story Update 9/1/2021:  PAMF Clarification

Speaking with a PAMF employee on September 1st who described her position as “patient onboarding,” the employee clarified that Medicare patients, new to PAMF, will have access to some physicians via Medicare Advantage plans, but not via traditional Medicare Supplement plans (e.g. medigap Plan G, Plan F etc.).  

What does this really mean? PAMF appears to be saying patients with original Medicare coverage will continue to have access to their physicians at Palo Alto Medical Foundation.  However, new patients will have to enroll with one of the Medicare Advantage plans that have contracted with Sutter Health/PAMF or go elsewhere to obtain medical services.

“Established patients with original Medicare coverage will continue to have access to their physicians at Palo Alto Medical Foundation.  However, new patients will have to enroll with one of the Medicare Advantage plans that have contracted with Sutter Health/PAMF or go elsewhere to obtain medical services.”

What is Medicare Advantage?  According to the National Medicare Handbook, published by the Centers for Medicare and Medicaid Services (CMS), titled Medicare and You 2022:

Medicare Advantage (also known as Part C) 

  • Medicare Advantage is an “all in one” alternative to Original Medicare.  These ““bundled” plans include Part A, Part B, and usually Part D.
  • Plans may have lower out-of-pocket costs than Original Medicare (see related story on supplemental insurance for original Medicare).

[Marc: the “lower costs” claim has been widely debated, but a recent Kaiser Family Foundation (KFF) issue brief lends evidence to the claim]. 

  • In many cases, you’ll need to use doctors who are in the plan’s network.

[Marc:  network limitation is not a big deal for individuals who only utilize PAMF doctors, but if you have doctors outside of PAMF, you may wish to consider plans that allow more flexibility e.g. original medicare or Medicare Advantage PPO plans (there a a few, but not as many as Medicare Advantage HMO plans).]

  • Most plans offer extra benefits that Original Medicare doesn’t cover—like vision, hearing, dental, and more.

The trend is up for Medicare Advantage plans.  As of 2021, KFF reported “more than 26 million people are enrolled in a Medicare Advantage plan, accounting for 42 percent of the total Medicare population”

However, despite all the positive press, there are risks to consider; Medicare Advantage may not be for everyone.

Risks Factors of Enrolling in Medicare Advantage 

CMS publications cite many positive attributes of Medicare Advantage plans, but to be fair, there are also risks:  I have talked with Medicare beneficiaries who did not properly understand these risks at time of enrollment, and I wish to share some of their experiences:

  • Risk #1:  You enroll in a Medicare Advantage plan for the first time, but later change your mind and wish to go back to original (traditional) Medicare with supplemental (medigap) insurance.

This is perhaps the biggest issue I come across.  While Medicare rules provide multiple opportunities to disenroll and return to original Part A and Part B, they do NOT provide as much protection on your right to re-enroll in Medicare Supplement (medigap) insurance e.g. Plan G, Plan F etc.

Why this matters:  supplemental Medigap insurance matters immensely,  because Medicare alone limits hospital coverage via deductibles, copayments and total number of days lifetime. Further, Part B only pays 80% (you are responsible for the remaining 20% coinsurance) for Part B expenses.  Let me emphasize there is no out of pocket maximum limit on the 20%.  Consider that Chemotherapy expenses usually fall under Part B and you start to realize the size of this financial liability.  Once this has been explained, no rational person would take on this risk without medigap insurance, especially given the low premium cost for such insurance e.g. under $150 per month for those turning 65 (see self-insure article).

Trial Rights

I would be remiss if I did not talk about trial rights i.e.  Medicare Guarantee Issue protections.  However, they do not go far enough:  Let me share a phone call last October from an individual with Stage 4 Cancer wishing to disenroll from Medicare Advantage after just 3 years (age 68).  

Why did he want to leave his Medicare Advantage plan?  He wanted access to a Cancer treatment center that he heard was accepting original Medicare, but the center was not affiliated with his Medicare Advantage plan.  

Technically, he could disenroll and go back to original Medicare, but….he could not buy supplemental medigap insurance unless he could provide evidence of insurability to the insurance company.  Sadly and reluctantly, he remained with his Medicare Advantage plan.

The “Trial Right” (return to medigap insurance) protections are complex and even the initial 12 month trial right does not apply in all situations.  I strongly urge readers to find a competent independent agent to explain these rules before enrolling in a Medicare Advantage plan for the first time.  The more “independent” and the more “local,” the better.  This subject is too important to take a chance on.

The Cost of Using Agents

Many readers wonder if there is an extra (embedded) cost to working with independent agents.  The answer is no, and the premiums are the same.  The benefit to you is local agents already know which Medicare Advantage plans are contracted with Sutter/PAMF- it has always amazed me why anybody would invite sales calls from 3 different insurance company representatives when one independent agent can impartially explain all three?  Besides, a local independent agent will stay with you for years, to advise if better plans become available in the future.  Recommendation:  Engage with an agent by Age 62, to help you understand and prepare for Medicare.  But if you really don’t want to talk to an agent, just go to CaliforniaEnrollment.Com

Practice due diligence and don’t ever allow yourself “to be sold.”

Marc Derendinger is an independent insurance agent in Santa Clara County, with 30 years experience with Medicare health plans and related insurance programs. He helped set-up the City of San Jose’s first ever group long-term care insurance program in 2001, benefiting their 9,000+ employees and retirees. He is licensed by the California Department of Insurance, license no. 0644617, and can be contacted at 408-252-7300.  www.derendingerins.com.

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Using Medicare At Stanford Healthcare- Stanford Hospital

Using Medicare At Stanford Healthcare- Stanford Hospital. Perhaps a better article title would be “Keeping Access To Stanford for Medicare Beneficiaries,” rather than “Using Medicare At Stanford.”

The purpose of this article is to acknowledge the thousands of Northern Californians impacted by recent Medicare plan changes, and to review possible solutions and resources to help gain Medicare access to the Stanford Health Care system or the Sutter system in the future.  If your plan changed and you have Sutter or “PAMF” doctors, read this related article.

Topics and Questions Addressed In This Article:

  • Are there any Medicare Plans that include Stanford after January 1st 2024?
  • Is Traditional Medicare Part A and Part B better than Medicare Advantage PPO?
  • Strategies to keep Stanford Healthcare as an individual Medicare beneficiary
  • Resources – Recommendations

Background: “Stanford” is popular with Medicare beneficiaries.  Prior to 2024, many individuals not covered on employer or retiree health coverage gained access to Stanford from Essence Healthcare, an individual Medicare Advantage HMO. 

Losing Your Plan, What To Do Next?

First, you could enroll in a different Medicare Advantage (HMO) i.e. give up your Stanford doctors, but this is probably not your first choice. Next, you might hope another Advantage plan picks up Stanford at the last minute.

Some suggest a Medicare Advantage PPO plan would solve your provider issues:  Options include i. getting help from an independent agent, ii. visiting medicare.gov, iii. phoning Medicare directly or iv. contacting each PPO plan directly.  Whichever resource you use, make sure your doctors have “in-network” status on the plan, otherwise, your out of pocket costs will be higher with “Advantage” PPO plans, when you use non-network providers.  

“Yes. You can also use out-of-network providers for covered services, usually for a higher cost, if the provider agrees to treat you and hasn’t opted out of Medicare (for Medicare Part A and Part B items and services).“ ref:  Page 19

(Medicare ref: page 19):  https://www.medicare.gov/Pubs/pdf/12026-Understanding-Medicare-Advantage-Plans.pdf

(Author: pay particular attention to the condition stated above, “if the provider agrees to treat you.”)

Original Medicare (Part A and Part B) + Medigap

Another term for “Medigap” is “Medicare Supplement Insurance” (It is unfortunate, but Medicare uses both terms interchangeably, which is confusing.).

Original Medicare is popular with individuals who wish to receive care from specialists in assorted medical groups and/or geographic regions.  Generally, this is not possible with “Advantage” HMO plans.

If you return to original Medicare and need coverage for outpatient medications, you should purchase a standalone Part D prescription drug plan (available at medicare.gov or by phoning Medicare directly, the plan directly or via your independent agent who can coordinate the enrollment details). 

Is Traditional Medicare (Part A Part B) Better Than Medicare Advantage PPO?

According to the nonpartisan research group, KFF (formerly Kaiser Family Foundation), 1% of physicians have opted out of Medicare.  The implication is clear:  Medicare beneficiaries have access to the vast majority of physicians across America. 

https://www.kff.org/f262da9/

If you subscribe to the financial publication, Barron’s, read the September 16, 2023 article comparing original Medicare and Medicare Advantage- it’s one of the best we have seen:

How to Decide Between Medicare and Medicare Advantage When You Turn 65

If You Do Not Have An Agent

We suggest you find a local independent agent who is familiar with major medical groups, such as the Stanford Health Care system or the Sutter system (PAMF in the bay area).  We advise using a competent, experienced agent to increase your probably of success, because the rules and the timing are complex and physicians are leaving and joining plans up to the last minute.  Medicare is ever changing, and once the current crisis has passed, you will probably need your agent in the future.

An alternative option for those who don’t want an agent is to phone Medicare for assistance.  They are open 24/7 at (800) 633-4227 or there’s no added cost to using an independent agent, but if you really don’t want to talk to one, “do-it-yourselfers” could try to self-enroll at this site.

Finding a Local Agent

https://www.myuhcagent.com/

Key Words:  Stanford Health Care- Stanford Hospital, Medicare

US News Article Link:

https://health.usnews.com/best-hospitals/area/ca/stanford-hospital-and-clinics-6932330/doctors

Resources:

Finding a Local Agent

Medicare publishes a guide to medigap policies; here’s an excert:

Cost is usually the only difference between Medigap policies with the same plan letter sold by different insurance companies.” CENTERS FOR MEDICARE & MEDICAID SERVICES (2023 Choosing A Medigap Policy): Section 2 

https://www.medicare.gov/Pubs/pdf/02110-Medigap-guide-health-insurance.pdf

From Barron’s: How to Decide Between Medicare and Medicare Advantage When You Turn 65
https://www.barrons.com/articles/medicare-choice-medicare-advantage-e9d7f1f2?reflink=article_emailShare

From MedPage Today, a very detailed story about medical groups cancelling Medicare Advantage contracts:

https://www.medpagetoday.com/special-reports/exclusives/106483

Losing Access To Stanford and Sutter- Medicare

Medicare.gov has made public its 2024 Medicare Advantage and Prescription Drug Plans, which become effective January 1, 2024. A review of this public website indicates many patients may lose access to Stanford and Sutter in 2024. Medicare.gov is a federal government website managed and paid for by the U.S. Centers for Medicare and Medicaid Services.

Access To Stanford and Sutter

A quick survey of this public-facing website implies big changes are coming to Northern California and the south bay area and peninsula region. The only individual Medicare Advantage HMO contracted with Stanford Healthcare and Stanford Hospital will withdraw its plans on January 1, 2024. These plan withdrawals also impact patients using the Sutter Health system e.g. Palo Alto Medical Foundation (PAMF) and other regional medical affiliations. For Sutter patients, the news gets worse.

For Sutter It Gets Worse

Overall, Santa Clara County is losing 4 Advantage plans and San Mateo is losing 3. Yet the impact is far greater than it appears, as these include the only individual plans with HMO access to Stanford. In Santa Clara County, the reduced access for Sutter patients is significant, as 2 of the 4 plans leaving the county are very popular with patients accessing the Sutter Health system. The total number of Medicare beneficiaries impacted is likely to be in the thousands.

Providers of Medicare Advantage plans will publish details of the 2024 offerings on Sunday October 1st. This will include Summary of Benefits, Star Ratings, Drug Formularies, and what everybody is waiting to see… the 2024 participating provider directories for the new plans. This information can be accessed at medicare.gov, directly from the insurance companies or by phoning 1(800) MEDICARE or through local licensed and certified agents.

This story was updated on October 1st:

Woe is Me, Self-Employed and 62

What Every 62 year-old should know… before reaching 63. [Yet, only 5 out of 100 actually do.]

For most self-employed individuals (and many W-2 employees), age 62 is your final opportunity to adopt strategies to avoid paying too much to the government, when you eventually apply to Medicare three years later.

Ironically, most self-employed and 1099 employees cannot wait for the opportunity to apply for Medicare Parts A and B…because health insurance premiums drop to under $150 per month (in the San Jose bay area) and the Part B deductible is an unbelievably low $226 per year.

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But there’s a problem for many, because at the time you apply for Medicare Part B, usually at age 65, you may discover too late, that Medicare adjusts your payment higher for Part B, when your income rises above a certain threshold.

Specifically, Medicare looks at your Federal Income tax return to determine if your payment for Part B (benchmarked at $164.90/mo in 2023) should be adjusted higher and in some cases, a lot higher. It surprises many that Medicare does not look at current income, rather they look at your tax return from two years prior.

We found over 90% of 62 year-olds are unaware of their opportunities to mitigate these extra costs. Furthermore, it only compounds the problem to blindly create capital gains through stock sales or Roth conversions, a common practice in preparation for retirement.

These are very important issues. You can get more information on this topic when you Subscribe (FREE) to this newsletter. It is focused solely on San Jose and the surrounding Bay Area.

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Self-Insuring Under Original Medicare

Is it a realistic option to self-insure and skip Medigap Insurance?  That depends on the size of your assets and your tolerance for risk (not to mention your willingness to administer payments to a multitude of medical providers).  To address this question, let’s look only at Original Medicare and what it pays.

In 2022, Medicare Part A requires you to share the cost of medical services, as follows:

Hospital Copayments and Deductibles

  • $1,556 deductible for Hospital Services
  • For Days 1-60 of a Hospitalization, there is no additional copayment (besides the deductible)
  • Days 61-90 you are responsible for $389 per day of coinsurance (that’s up to $11,670)
  • Days 91 and beyond your share is $778 daily (up to 60 reserve days over your lifetime)
  • Beyond lifetime reserve days, you are responsible for all Hospital costs.

Medigap Insurance helps with the deductible and copayments, depending on which Medigap plan you choose. That’s quite a bargain, considering the low cost of these plans.

Additional Copayments and Coinsurance

Following a lengthy hospital stay, your doctor may recommend rehabilitative care in a skilled nursing facility.  If this care extends beyond 20 days, you pay a daily copayment of $194.50; then, you pay all costs after 100 days, which can run $500 per day, in many California facilities.  

It should be mentioned that some skilled nursing home stays are not covered by Medicare at all, because they do not meet Medicare eligibility (for example, when your stay is not preceded by a 3-day Hospitalization).  Private long-term care insurance exists to help with this financial exposure.

Share this story with someone turning 65.

I Don’t Need Vision Care

“I don’t need glasses so I don’t need Vision Care”

Honestly, how would Vision Care benefit me, if my vision is perfect?  Experts argue every person can benefit from an annual vision care exam. How?

  • During the VSP WellVision Exam, your eye doctor does much more than just determine your prescription for eyeglasses or contact lenses.
  • Your doctor will also check for common eye diseases, assess how your eyes work together “as a team” and evaluate your eyes as an indicator of your overall health.

Some Medical Conditions Are Easier to Detect Through The Eyes

Are you between Age 20 and 74? One of the nation’s leading vision care plans found its doctors were the first to diagnose diabetes in over 30% of cases.

Watch 64 second video on Diabetic Retinopathy, the leading cause of new cases of blindness between the ages of 20 and 79.

Early Detection Is Key

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A Vision Care Plan protects you and your family.  Watch this video about Vision Service Plan’s affordable new vision plan for individuals and families:

Vision Care from VSP

Watch this Video

Additional Resources

  1. How much does it cost?
  2. Find A VSP Doctor
  3. Call or Text Questions to an authorized sales representative: (408) 475-8219
  4. Download a Paper Application

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VSP Doctor Network: The Biggest, The Best

Your VSP doctor has met the highest credentialing requirements, so members are getting the most expert care available.

VSP Individual Plan Application Link

VSP Individual Plan Information

  • Choose from over 32,000 VSP doctors, many who offer weekend and evening hours for your convenience.
  • Over 60,000 access points, conveniently located in medical offices and retail settings.
  • How are VSP doctors licensed?   VSP optometrists are Therapeutic Pharmaceutical Agent (TPA) certified and ophthalmologists are American Board of Ophthalmology (ABO) certified.  VSP chooses doctors carefully based on their professional licensing, work history, education, malpractice history, professional liability and ethics.
  • Are ophthalmologists covered?  The VSP network doctor list includes highly skilled and professionally certified optometrists and ophthalmologists.  Whether your VSP doctor is an optometrist or ophthalmologist, you will receive a comprehensive vision exam and you can purchae glasses and contacts in their office.

Additional Resources

VSP Doctor Search

  • Download an Application for individual or family coverage.

 

Find a VSP Doctor for the VSP Individual Plan

New Vision Service Plan For Individuals

Previously available to larger corporate employers, Vision Service Plan now offers the VSP Individual Plan to pretty much anyone who lives in the service area:

 

Vision Service Plan

  1. How much does it cost? Get Rates!

  2. View VSP benefit details of this new program here
  3. Start a Vision Service Plan application for individual or family coverage
  4. 100% Vision Service Plan Satisfaction Guarantee!

Open Enrollment is year-round!  Learn how to enroll right now.

 

 

 

 

 

“Millions of people are without vision coverage, and we want to increase access to care for those who wouldn’t otherwise be covered through an employer,” said Ken Stellmacher, Senior Vice President & General Manager of VSP Individual Plans. “Our mission is to help people see, and one of the ways we do that is by supplying brokers with a valuable product that is affordable for their clients. Also, with adult vision care not offered as part of the new public health insurance exchanges, this is a great avenue to make vision care easily accessible to consumers.

Vision Service Plan for Individuals & Families

 

More than 50 percent of Americans are without vision coverage.1 In an effort to increase access to care, VSP® Vision Care, the nation’s largest not-for-profit vision services and benefits company, recently launched a program for insurance brokers to sell individual vision plans directly to consumers.

Authorized brokers can now sell VSP individual insurance plans through a website hosted by VSP that allows clients to self-enroll. The vision plan, created exclusively for brokers, provides individuals and families the same high-quality eye care that VSP offers through employers­—directly to individuals who don’t have access to vision care. Like VSP’s employer-sponsored plans, the individual plan also offers the lowest out-of-pockets cost in vision care with a satisfaction guarantee.

1Source:  Vision Council (June 2013 Vision Watch Vision Correction Standard Report, Table 26A) Read the full press release right here.

Additional Resources

 

For Individual and Family Health Plans, view online pricing, free of charge.