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Medicare Cost Constraints: Help Navigate Economic Challenges

Posted by WAP Team on 7/29/22 11:12 AM

Medicare Cost Constraints

Everything is getting more expensive. For Medicare enrollees, many of whom are on a fixed budget, price hikes can be a major financial burden. Amid surging inflation rates, it’s likely that many seniors will be especially cost-conscious this AEP. Now, more than ever, agents must be ready to help them navigate economic challenges.

Economic Trends Impact Seniors

The U.S. Bureau of Labor Statistics says that the Consumer Price Index for All Urban Consumers – the figure commonly used to assess inflation – is up 9.1% over the last 12 months as of July 2022. Food is up 10.4% and energy is up 41.6%.

At the same time, falls in the stock market have hurt many people with money saved in stocks. According to CBS News, the director of the Center for Retirement Research at Boston College says that a recent selloff erased close to $3 trillion from U.S. retirement accounts.

These economic conditions put a squeeze on already-struggling seniors. Social Security recipients got a 5.9% cost-of-living increase for 2022, and although that seemed like a lot, much of it was eaten up by a $21.60 Medicare Part B premium increase. Now, inflation is far outpacing the benefit increase.

Even before COVID and the recent economic volatility, many seniors were struggling. A report from the ASPE found that 3.5 million adults age 65 and older and 1.8 million beneficiaries under 65 had difficulty affording medications in 2019.

Some Relief May Be in Sight

While the economic situation is difficult, some relief may be coming.

First, because of the high inflation rates that we’re seeing, it’s likely that Social Security recipients will get another big cost-of-living adjustment for 2023. The Senior Citizens League has predicted that it could be as high as 8.6%.

Even better, this increase might not get eaten up by a Medicare Part B premium increase. The substantial increase seen in 2021 was largely due to a single, expensive prescription medication, Aduhelm. Since then, coverage and costs have changed. Health Payer Intelligence says that the resulting savings may help lower Medicare Part B premiums in 2023.

Nevertheless, Many Seniors Still Need to Pinch Pennies

Although larger Social Security benefits and lower Medicare Part B premiums could go a long way in helping seniors in 2023, many may still be dealing with tight budgets and drained savings. Some may be forced to choose between buying groceries, filling prescriptions or getting dental care.

The right Medicare Advantage plan could help. According to Fierce Healthcare, a study from the Better Medicare Alliance found that seniors on Medicare Advantage spend an average of $1,965 on premiums and out-of-pocket costs.

This AEP, you’ll need to take a few extra steps to help seniors balance their health care needs with their financial constraints.

  • Make sure they know about the various programs that could help them with costs. This includes Extra Help, Medicaid and the Medicare Savings Programs. If your clients are struggling with costs, encourage them to apply.
  • Let your clients know they can appeal the Medicare income-based surcharge. Some people pay more for coverage based on their income. If your clients have recently experienced a reduction in income, they might be overpaying. HHS says they can appeal.
  • Educate your clients on how Medicare Advantage works. Confusion over network and referral requirements can lead to higher out-of-pocket costs and denied claims. Make sure your clients know how to avoid higher costs in their plan.
  • Encourage your clients to use their benefits. Preventative and routine care benefits are often covered with no out-of-pocket costs. Your clients should be taking advantage of these benefits.
  • Look for the benefits your clients need. Discuss things like dental care, vision care and other supplemental benefits to see what your client needs, and then look for a plan that provides those benefits.
  • Calculate expected out-of-pocket costs. When comparing plan costs, make sure your clients aren’t just looking at the monthly premium. Although it takes more time, it’s important to look at networks, formularies, copays and deductibles to calculate the total out-of-pocket costs that your clients can expect to pay under different plans.
  • Offer low-cost options. Some of your clients might say that they simply cannot afford plans with higher premiums, even if the benefits are great. Be ready to provide “skinny” options and discuss the pros and cons.
  • Schedule AEP appointments with existing clients early in the season – in late October/early November. If your clients are struggling with financial decisions, they may need extra time to go over their options. Reach out to clients and get those appointments scheduled as soon as possible.

Your clients need help navigating their Medicare costs and options. Be the advocate they’ve come to trust and rely on. Should you seek additional training on how best to approach your book this AEP, be sure to attend our free virtual presentations. Don’t forget to register for WAPCon 2022, the leading AZ rollout and AEP conference. Contact us.

Topics: Medicare cost contstraints

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