There's a steep price for doing nothing when it comes time for open enrollment for Medicare prescription drug plans
My Thanksgiving ritual each year consists of heaps of turkey, corn casserole and apple pie — as well as quiet time devoted to helping relatives choose Medicare prescription drug plans for the following year.
Most people partake in similar gorging, but not enough spend the time to compare health plans for their relatives. My experience this past weekend is a particularly instructive example of how costly it can be to do nothing.
With open enrollment for 2014 drawing to a close this Saturday, there’s little time for delay. (The process of picking a drug plan in Medicare is totally different from using healthcare.gov, the federal health insurance exchange for people under age 65 who are not in Medicare.)
Unlike Medicare’s hospital and doctor benefits, which are managed by the federal government, seniors and disabled people needing drug coverage must choose a subsidized, privately run plan under contract with Medicare. The 36 million enrollees in the program usually have dozens of choices that offer an array of monthly premiums, deductibles and copayments. The plans have different preferred drugs and different requirements for prior approval for expensive generics.
Depending on the drugs each person takes, some plans are much cheaper than others.
Sounds good so far, but there’s a giant catch: Once a person signs up for a plan, his or her enrollment continues from year to year if the person does nothing — even if the plan raises its prices and tightens its requirements. It’s up to enrollees to determine if there’s a better choice, and they can switch plans once a year (during open enrollment).
Consider my in-laws, who live near Dallas.
Last year, I helped them pick a pretty awesome plan that cost each of them $31.10 per month. It has no drug deductible, meaning they didn’t have to pay out of their pockets before their drug coverage began. And generic drugs cost them nothing. Both only take generic drugs — several of them, mind you — and their annual drug costs were less than $375.
But if they had chosen to stay with their plan for next year, prices would have exploded. Their monthly premium would have increased to $47.10 and they would have had drug co-pays of at least $3 per prescription. When you add it all up, my mother-in-law’s annual costs would have more than tripled, to $1,146, and my father-in-law’s would have increased to $1,086.
That’s a steep price for doing nothing.
By shopping around, my father-in-law was able to select a plan that will cost him $415 (assuming his drugs remain the same.) My mother-in-law’s costs will increase to $691. Even though both will see their costs rise, by changing their plans, they cut their tab in half from what it would have been.
Comparison shopping sounds like a no-brainer, but for many reasons, it’s not. It is time consuming and eye glazing even for a health-care journalist to enter in drugs and review the resulting options. A study commissioned by the Kaiser Family Foundation in October found that only 13 percent of Part D enrollees, on average, switched plans each year between 2006 and 2010. Seven out of 10 people continuously enrolled in plans from 2006 to 2010 never switched.
(The analysis only looked at stand-alone drug plans, not Medicare Advantage plans in which drugs are offered in HMOs. It also excluded low-income beneficiaries, whose costs are heavily subsidized.)
One study found that 72 percent of enrollees had never changed Medicare drug plans.
“Only a small fraction of enrollees, however, are enrolled in the lowest-cost Part D plan available to them, based on the specific drugs they take,” the report said. “Therefore, many Part D enrollees incur higher out-of-pocket costs than would be the case with a different plan selection.”
“Part D enrollees often have difficulty with the plan selection process and find the decision-making complicated, especially because of the large number of available plans.”
What the study found, essentially, is that older people and the disabled may be lulled in by lower monthly premiums, only to find that their actual drug prices are much higher.
So why don’t people switch more regularly? The authors offer a few theories:
In one view, enrollment stability could be a sign of enrollees’ satisfaction with their plans. Another view is that beneficiaries avoid “rocking the boat,” by staying in their current plans, preferring the status quo (even at a higher cost) over the unknowns of a new plan. Alternatively, the low rate of switching plans could indicate that Medicare beneficiaries are not fully engaged in the Part D program’s choice-based system and that the task of reviewing and comparing plans in the face of many different options may be too difficult or may not seem worth the effort. This view is supported by some qualitative evidence from polls and focus groups, where beneficiaries have reported that they would prefer less choice and a simpler system.
Based on my experience helping my family members, I find the last explanation the most plausible.
Either way, whether you are a Medicare enrollee or you are friends or relatives with one, compare options. Open enrollment for 2014 ends Saturday, Dec. 7.
Plenty of help is available from Medicare and others. Here’s one place to start:
Editor’s Note: This post is adapted from Ornstein’s “Healthy buzz” blog. Have you tried signing up for health care coverage through the new exchanges? Help us cover the Affordable Care Act by sharing your insurance story.
MongoDB will take data from UIDAI to undertake analysis. UIDAI is tight-lipped about CIA's role in it. It is yet to become clear whether MongoDB will be in a vendor relationship directly or will operate through some pre-existing entity that is already working with UIDAI as system integrator
‘Reimagining India’, a book edited by McKinsey & Company, published by Simon & Schuster in November 2013, Mukesh Ambani has written a chapter titled ‘Making the Next Leap’ endorsing biometric profiling based identification. Ambani writes, “Aadhaar, an initiative of Unique Identification Authority of India (UIDAI), will soon support the world’s largest online platform to deliver government welfare services directly to the poor.” It appears to be a book of the millionaires and billionaires, by the millionaires and billionaires and for the millionaires and billionaires.
This reminds one of the lyrics of a song titled ‘If I were a rich man’, which is from the famous musical ‘Fiddler on the roof’ of the 1970s, which noted “When you're rich, they think you really know!” The song goes like:
If I were a biddy biddy rich, Yidle-diddle-didle-didle man.
The most important men in town would come to fawn on me!
They would ask me to advise them,
Like a Solomon the Wise.
And it won't make one bit of difference if i answer right or wrong.
When you're rich, they think you really know!
In his chapter Ambani adds, “The most exciting prospect of all is the impetus that could come from tapping the surging aspirations of the seven to eight hundred million Indians who remain excluded from India’s success story. If we manage to bring this segment of the population into the economic mainstream, the result will be enormous enhancement in India’s economic and non-economic power, as we generate equality in access despite inequality in income.” According to Forbes magazine, Ambani is listed as the 22nd richest person in the world with a personal wealth of $21.5 billion. He has retained his position as the India's richest person for the sixth year in a row.
Ambani says, “When I reflect on India’s phenomenal success over the past two decades and consider what will be required for similar advances in decades to come, I often think back on what India was like in 1980, when I returned to Mumbai from Stanford University”.
The book introduces Ambani as the “Chairman and CEO of Reliance Industries, India’s largest private sector company. He is a member of the Prime Minister’s Council on Trade and Industry, a member of the board of governors of the National Council of Applied Economic Research, and chairman of the Indian Institute of Management, Bangalore. Ambani has a degree in chemical engineering from the Mumbai University Indian Institute of Chemical Technology and an MBA from Stanford University.” The book commits a mistake in stating that Ambani has a MBA degree from Stanford University because he admittedly dropped out and did not complete his MBA course.
The book has a chapter on India by Eric Schmidt, executive chairman of Google and co-author of “The New Digital Age: Reshaping the Futures of People, Nations and Business” wherein he says, “The government’s Unique Identification project, led by my friend Nandan Nilekani, is creating enormous new possibilities for e-commerce.” What he leaves unsaid is that Unique Identification (UID)/Aadhaar project entails marriage of digital technologies with unaccountable and ungovernable biometric and surveillance technologies which is illegitimate and illegal.
Nilekani also has a chapter titled “A technology solution for India’s identity crisis” in the book wherein he says, “The Indian government spends about $60 billion a year on subsidy programs involving products such as food, fertiliser, and petroleum...But studies show that these programs often have leakages, thus leading to anomalies in benefits reaching the intended beneficiaries. India’s own Planning Commission found in 2008 that more than one-third of subsidised grain supposedly destined for the poor went to better-off households instead, due in large part to fraud and corruption. Errors in delivery and identification resulted in even greater losses of subsidised grain…Aadhaar can this revolutionalise the way public services are delivered as well as dramatically enhance the inclusiveness of Indian society.” He is more concerned about leakage of food grains than leakage of financial and mineral resources which has led to accumulation of black money in foreign countries. His silence on this issue exposes him. He is ignorant about the fact that leakage is not an identification problem but a problem of eligibility wherein those who are ineligible access subsidies. Such pilferage can be dealt with without subjugating Indians to social control technology companies.
Nilekani concludes saying, identification “Technology can be a great leveler of Indian society”. He seems to echo what Ambani says about generating “equality in access despite inequality in income” by claiming technology to be class neutral and income neutral because structurally it is supposed to be a ‘leveler’. Is inequality in income a natural phenomenon? The authors of this book imply it to be so.
Meanwhile, according to a report from Economic Times and Navbharat Times, Max Schireson, CEO of MongoDB (formerly called 10gen), a technology company from US which is co-funded by Central Intelligence Agency (CIA), was in New Delhi two weeks back to enter into a contract with UIDAI. This company is a Palo Alto and Manhattan-based database software provider in the $30 billion relational database market. Relational databases commenced in the 1970s when computers were moving away from punch cards (that facilitated holocaust in Germany using census data) to terminals. It is taking away customers from Oracle and IBM. This contract has not been disclosed so far. MongoDB will take data from UIDAI to undertake its analysis. UIDAI is tight-lipped about CIA’s role in it. This company’s database software is already being used to verify the speed of registration. It is yet to become clear whether this company will be in a vendor relationship directly, or it will operate through some pre-existing entity which is already working with UIDAI as system integrator.
10gen is the company behind MongoDB, a popular open-source, document-oriented database. It forms a part of a new generation of NoSQL -- Not Only SQL -- database products developed as an alternative to conventional relational databases from Oracle, IBM and Microsoft. Elsewhere, Schireson explained, “We deliver enterprises a 10 to 1 improvement — we charge tens of thousands of dollars to complete projects in a few months that they charge millions of dollars to finish in years” to deal with large volume and diverse variety of big data.
According to the report, one of the investors of MongoDB is In-Q-Tel (IQT), a not-for-profit organisation based in Virginia, USA created to bridge the gap between the technology needs of the US Intelligence Community and emerging commercial innovation. It identifies and invests in venture-backed startups developing technologies that provide “ready-soon innovation” (within 36 months) which is vital for the mission of the intelligence community. IQT was launched in 1999. Its core purpose is to keep CIA and other intelligence agencies equipped with the latest in information technology to support intelligence capability. Edward Snowden had revealed that US intelligence agencies are targeting communications in Asian countries. It was founded by Norman Ralph Augustine.
In his book ‘At The Center Of The Storm: My Years at the CIA”, former CIA director George Tenet says, “We (the CIA) decided to use our limited dollars to leverage technology developed elsewhere. In 1999 we chartered ... In-Q-Tel. ... While we pay the bills, In-Q-Tel is independent of CIA. CIA identifies pressing problems, and In-Q-Tel provides the technology to address them. The In-Q-Tel alliance has put the Agency back at the leading edge of technology ... This ... collaboration ... enabled CIA to take advantage of the technology that Las Vegas uses to identify corrupt card players and apply it to link analysis for terrorists [cf. the parallel data-mining effort by the SOCOM-DIA operation Able Danger], and to adapt the technology that online booksellers use and convert it to scour millions of pages of documents looking for unexpected results.”
In-Q-Tel sold 5,636 shares of Google, worth over $2.2 million, on 15 November 2005. The stocks were a result of Google’s acquisition of Keyhole, the CIA funded satellite mapping software now known as Google Earth. On 15 August 2005, Washington Post reported that In-Q-Tel was funded with about $37 million a year from the CIA. "In my view the organisation has been far more successful than I dreamed it would be," said Norman R Augustine, who was recruited in 1998 by Krongard and George J Tenet, who then was director of central intelligence (DCI) to CIA, to help set up In-Q-Tel. Augustine, former chief executive of defense giant Lockheed Martin, is an In-Q-Tel trustee.
Notably, former CIA chief, Tenet, was on the board of L-1 Identity Solutions, a major supplier of biometric identification software, which was a US company when UIDAI signed a contract agreement with it. A truncated copy of the contract agreement accessed through RTI is available with the author. This company has now been bought over by Safran group, a French defence company. The subsidiary of this French company in which French government has 30.5% shares, Sagem Morpho has also signed a contract agreement with UIDAI. In August 2011, Safran acquired L-1 Identity Solutions.
In the backdrop of these disclosures, how credible are the poor-centric claims of Mukesh Ambani, Nilekeni and Eric Schmidt who are taking Indian legislators, officials, citizens and the Indian intelligence community for a royal ride. Clearly, aadhaar creates a platform for social control and surveillance technologies to have a field day and undermines nations’ sovereignty, security and citizens’ democratic rights. Nilekeni wrote ‘Imagining India’, McKinsey & Company edited ‘Reimagining India,’ it is evident that their idea of India is contrary to idea of India that emerged from the freedom struggle since 1857 and the constitution of India.
Freedom struggle witnessed both traitors who sided with companies and foreign governments and loyalists who were ready to suffer any consequence to safeguard the interest of Indians. Can citizens of India trust Goolam E Vahanavati, Attorney General for India and Prime Minister of India when they submit their defence of indefensible aadhhar/UID in the Supreme Court, where it faces a legal challenge to take a step back and withdraw the project the way they withdrew their circular making aadhaar/UID mandatory in Chandigarh before the Punjab & Haryana High Court to save Indians from falling into a sophisticated intelligence trap?
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(Gopal Krishna is member of Citizens Forum for Civil Liberties (CFCL), which is campaigning against surveillance technologies since 2010)
As per the draft guidelines, RBI would allow banks with good credentials to operate as insurance brokers and leverage their branch to increase the penetration of the insurance sector
The Reserve Bank of India (RBI) has decided to permit banks to become insurance brokers in order develop the insurance sector in the country. RBI will allow banks to offer policies from different insurance companies to their customers apart from their own insurance subsidiaries’ policies.
RBI, in its draft guidelines, said, “In order to enable banks to leverage their branch network for increasing insurance penetration, it has been decided to permit banks to undertake insurance broking business departmentally, subject to the requirements, including the minimum eligibility criteria.”
However, banks must ensure transparency and disclose remuneration received from various insurance companies, the central bank said.
The draft guidelines states, “In order to ensure transparency, banks should disclose to the customers, details of remuneration (in any form) received from various insurance companies for the broking business. The details of fees/ brokerage received in respect of insurance broking business undertaken by them should also be disclosed.”
A bank which desires to become insurance broker have to take prior approval and fulfill minimum eligibility criteria with RBI. Its approval will be based on validity period for three years and subject to review thereafter.
“Insurance broking is a knowledge intensive activity which requires professional expertise so it will be permitted subject to the certain conditions,” said RBI in its press release.
RBI in its draft, on entry of banks into insurance broking business has setup following eligibility criteria as per published accounts as on 31st March of the previous year,
However, according to RBI draft, bank which offers insurance broking services shall not enter into any arrangement for corporate agency or insurance referral business to avoid any conflict of interest.
RBI has invited feedback from the stakeholders on the draft norms and given time period till 31st December 2013.
Earlier, finance minister, P Chindambaram in the budget speech of February 2014 said that, banks will be permitted to act as insurance brokers. Insurance Regulatory and Development Authority (IRDA) already allowed banks to act as brokers and sell products of more than one insurer to increase the penetration of the insurance sector across the country.