A long-established San Jose Broker warns a large influx of individuals may return to traditional Medicare this Annual Enrollment season. The 2025 Annual Enrollment Period begins October 15th.
In 2024, Medicare beneficiaries were blind-sided when Stanford stopped accepting
plans from Essence Health and Palo Alto Medical Foundation no longer participated in Medicare Advantage HMO plans from United Healthcare in Santa Clara County.
First Stanford, then Sutter and PAMF. Are there any other options?
The September 9th, 2024 Becker’s Payer Issuespicked up some comments from Sachin H. Jain, MD, MBA, the President and CEO of non-profit Scan Group and Health Plan, which operates some highly-regarded regional medicare advantage plans: “The Great Disruption” is an expression used to describe a perfect storm banging into the medicare advantage market.
“With changes in the Medicare Advantage risk model, slowed increase in Medicare Advantage county base rates, and downward pressure on Medicare star ratings—we are seeing broad evidence of retraction.”
He goes on to say even some non-profit health systems are exiting medicare advantage, hence the phrase, “The Great Disruption.” How many might run for the exits and return to original medicare? We shall soon see.
On January 1, 2024, thousands were at risk of losing Sutter Medicare coverage, as Essence Healthcare and United Healthcare closed out Medicare Advantage HMO plans in Santa Clara, San Mateo counties and elsewhere. While some found replacement medicare advantage plans, many consumers returned to traditional Medicare (Parts A and B) and purchased a supplemental medigap policy e.g. medigap Plan G.
Access to Sutter Medicare coverage continues to frustrate members in the bay area and Northern California, as reported in previous articles. Locally, many members lost access to Sutter Medicare coverage last January 1, 2024. We have received feedback from some UHC members who recently realized their PCP was changed from a Sutter doctor to a new doctor in the SCCIPA organization.
Is It Too Late To Return to Original Medicare?
Were you one of the thousands impacted from losing Sutter Medicare coverage [see our latest article on returning to original Medicare]? If you acted timely, your options included returning to traditional Medicare Parts A and B, and enrolling (with guaranteed acceptance eligibility) with supplemental medigap insurance.
Generally, one should proceed cautiously when returning to traditional Medicare, unless you are assured underwriting approval for a medigap insurance policy: Without supplemental medigap protection, your Medicare copayment responsibility would be too great. Side 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), approximately 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 popular with individuals who wish to maintain control and choice over their medical 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 if you use non-network providers.
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.
“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?
What one San Jose Broker says willhappen by January 1, 2025
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), titledMedicare 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 withhis 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? Note: You can also find local agents using the United Healthcare Local Agent Finder tool. 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.
Anthem (Blue Cross) is not the same company as Blue Shield of California
Did you ever wonder about the relationship between Blue Cross and Blue Shield, here in California? This article seeks to help clear up any misunderstandings. No, Anthem Blue Cross and Blue Shield of California were never the same company: They are both independent licensees of the Blue Cross Blue Shield Association (BCBSA), which is a federation of 33 independent and locally-operated BCBS companies that provide health insurance across the United States.
In some states certain “licensees” cooperate on the same plan and this could explain some confusion. Yet, in California there are two distinct Blue-Branded companies:
Anthem Blue Cross (part of Elevance Health)
Blue Shield of California (an independent company)
They have very different ownership structures. In this article, we are presenting a brief history of each company to help clarify their roles in the California marketplace…especially for seniors age 65 and older, which is the focus of this website.
The History of Blue Shield of California
Blue Shield of California has a storied past that highlights its unwavering dedication to providing high-quality, affordable healthcare to the people of California. Established in 1939 in San Francisco, the organization has evolved into one of the state’s largest health plans, currently serving millions of members. Currently, it is the state’s leading issuer of medigap (Medicare Supplement) insurance policies.
From the outset, Blue Shield of California has been guided by a mission-focused approach rather than the pursuit of profits. This dedication is embodied in their unique 2% Pledge, which limits their net income to 2% of revenue. Any earnings beyond this limit are returned to customers or invested in community initiatives.
Over the years, Blue Shield of California has continually adapted to address the shifting needs of its members and the broader healthcare environment. In 2019, the company moved its headquarters to Oakland, solidifying its deep-rooted connection to the Bay Area.
Financial stability has always been a key aspect of Blue Shield of California’s operations. In 2023, the company reported revenues of $25.1 billion and a net income of $130 million, showcasing its ability to maintain financial health while staying true to its mission-driven ethos.
Throughout its history, Blue Shield of California has earned accolades for its ethical business practices, community involvement, and positive workplace culture. The Ethisphere Institute has named it one of the World’s Most Ethical Companies, and the Civic 50 has recognized it as one of the country’s most community-oriented companies.
The company’s commitment to diversity and inclusion is another significant aspect of its legacy. Blue Shield of California has consistently been honored as a top workplace for LGBTQ+ employees by the Human Rights Campaign and has been listed among DiversityInc’s Top Regional Companies.
Blue Shield of California has remained steadfast in its founding principles while evolving to meet the demands of a changing healthcare landscape. Its ongoing commitment to its mission, financial prudence, and community impact ensures its continued leadership in California’s healthcare system.
The Evolution of Blue Cross of California
1936 – The Beginning
Blue Cross of California was founded in 1936. Over the years, it has evolved to become a trusted name in health insurance.
An Independent Licensee
Blue Cross of California operates independently but is licensed to use the Blue Cross Blue Shield trademarks. This means you get the reliability of a well-known brand with the personalized service of a local entity.
2004 – A New Identity
In 2004, Blue Cross of California rebranded to Anthem Blue Cross. This was part of a broader strategy by its parent company, Anthem Inc., to unify its subsidiaries under the Anthem name.
Mergers and Changes
In 2004, Anthem Insurance Company merged with WellPoint Health Networks Inc., adopting the WellPoint name for a period. By 2014, WellPoint decided to change its name to Anthem, Inc. to streamline its brand identity.
The Latest Chapter
In 2022, another significant change occurred when Anthem, Inc. rebranded as Elevance Health. This new name reflects a broader mission to elevate healthcare and advance well-being. With this change, their stock ticker symbol also changed from “ANTM” to “ELV.”
Looking Forward
Elevance Health continues to own and operate various subsidiaries, including those previously known as WellPoint and Anthem. This latest evolution ensures that the company remains at the forefront of healthcare, committed to providing you with top-notch service and support.
We hope this history helps you understand the legacy and current focus of these companies.
As of April 2024 Blue Shield of California has stopped accepting applications for one of its most popular medigap plans in Northern California, Plan G Inspire.
Subject to regulatory approval, Blue Shield intends to close the plan to existing members, as well; possibly as early as January 2025.
Blue Shield of California introduced the plan in September of 2020. By April 6, 2022 Blue Shield issued a press release announcing it took the top position in market share for individual Medicare Supplement (also known as “medigap”) plans in California in 2021.
Blue Shield of California continues to offer the Plan G Extra. This is a comparable plan to the Inspire, but without the AAA features.
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
(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.
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:
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.
“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
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 (and more in 2025). 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. See what one local expert says may happen in 2025.
Breaking Sutter News April 2024
Unfortunately, the medicare advantage open enrollment period has closed just as a new Sutter option becomes available: Effective April 2024 an established medicare advantage PPO insurer has signed on with Sutter.
Northern California Sutter providers e.g. Palo Alto Medical Foundation or “PAMF” have agreed with United Healthcare to in-network PPO status, effective immediately. This information can be accessed at medicare.gov or by phoning 1(800) MEDICARE. If you prefer local assistance, you can search for local United Healthcare agents by zip code at https://www.myuhcagent.com.
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.
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.
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.
“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:
