Insurance For Over 65

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Greg Nicholaides

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Drug Makers Raise Prices 6.6% This Year

Erica Carbajal – Becker’s Healthcare – Jan. 31, 2022

A month into 2022, drug makers have raised the list prices for medications in the U.S. by an average of 6.6%, compared to the 7.0% overall consumer inflation rate, The Wall Street Journal reported.

While companies kept most increases in the single digits for another year as Congress explores measures to curb high costs, they boosted list prices on cancer, diabetes and other prescription medicines.

The news outlet cited an analysis from Rx Savings Solutions, which makes software to find prescription drug savings which found that about 150 drug makers raised prices on 866 products through Jan. 20.

Here are five details from the analysis: 

1. Drug makers raised prices by an average of 4.5% on 893 drugs during the same period last year. Drug price increases hit a peak in 2015 and 2016, when some drugs saw increases higher than 10%, according to The Wall Street Journal.

2. The 2022 analysis showed prices rose for some of the top-selling medications in the U.S., including AbbVie’s Humira, an anti-inflammatory, which saw a 7% increase. The price of Bristol-Myers Squibb and Pfizer’s Eliquis, an anticoagulant, rose by 6%, and Trulicity, Eli Lilly’s diabetes drug, rose by 5%. 

3. Political pressure and other drug-pricing measures in recent years have made price hikes less profitable for drug companies, the Journal reports. Many pharmacy benefit managers, for example, have negotiated price increase caps that require drug makers to pay rebates on product sales that have price increases above certain thresholds. 

4. The Biden administration has also proposed drug-pricing provisions in its Build Back Better bill, including one that caps price increases at the overall inflation rate across federal and private health insurance programs. 

5. Pfizer, which raised prices by an average of 3.2% on 219 drugs, shared the following statement with The Wall Street Journal: 

“For the past three years, our net prices — the prices we actually receive for our medications — has fallen due to higher rebates and discounts paid to insurance companies and pharmacy benefit managers.”

Greg Says has previously noted that retail prices for Rx drugs in the US have skyrocketed over the past 10 years.  In 2020, Medicare Part D covered over 3,500 drugs with total spending of $188 billion which was 54% of the total Rx drug spending in the US of $348 billion.  Congress needs to act to stem the rising cost of Rx drugs in the US.  One step in that direction would be for Congress to allow Medicare to negotiate drug prices with the pharmaceutical industry like the VA and private insurers can.

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How Long Can I Expect to Live? Plus Other FAQs About Life Expectancy

By Becky Upham – Life Extension Magazine

In 1900, life expectancy in the United States was 47.3 years; in 2017, it was 78.6. Here’s why the numbers have gone up, plus advice from medical experts on how to add more healthy years to your own life. In 2017, nearly 25 out of 100 people in the United States lived to celebrate their 90th birthday. Have you ever wondered how old you’ll be when you die? Even if it was just to estimate how much you should put away in your 401(k) or how much time you have to pay off your student loans?

Life expectancy represents the average number of years that someone can expect to live depending on the year they were born. For anyone born in the United States in 2017, life expectancy is 78.6 years, according to the Centers for Disease Control and Prevention (CDC). Another way that experts measure life expectancy involves considering the percentage of people who live to specified ages.

Both those calculations are based on averages of the entire population and include all sexes, races, and parts of the country. How long each individual lives is determined by many factors, says Qi Sun, MD, a doctor of science and an associate professor at the Harvard T.H. Chan School of Public Health. He explains that life expectancy is influenced by genes, environment, and lifestyle choices: “We can look at how the life span has increased over the last 100 years and see that it’s modifiable,” he says.

Read on for commonly asked questions about life expectancy and what you can do to live longer and healthier.

Do the ages that my parents or grandparents died make a difference in figuring out my life expectancy?

Family history is a big predictor of longevity. “If you look at parents’ life span and compare it with their offsprings’, you’ll find certain correlations because sometimes they share the same genes,” says Dr. Sun. If some of those genes lead to certain diseases, it may shorten life span. “On the other hand,” he adds, “families that have good genes may live longer.”

Some similarities in health patterns that may seem genetic could also be due to common habits and location. Family members often share the same environment, especially when children are young and still live at home. “Families eat a similar diet and have the same access to medical care, which are both factors that impact longevity,” Sun says.

You just need to look at data from 100 years ago and compare it with current life expectancy to see that there’s more to longevity than simply genetics. According to the CDC, the life expectancy of someone who was born in 1900 was only 47.3 years. 

“Genetics wouldn’t really explain this jump,” Sun says, adding that a lot of things combined to cause this increase, including improved medical care and hygiene.

Why do women live longer than men?

Women tend to live longer than men, and that’s been the case for at least the past century, says Robert Anderson, PhD, chief of the mortality statistics branch of the CDC. “Before that, a very high maternal mortality pulled down the average life expectancy for women,” he says.

Ever since medical improvements led to a huge decrease in the number of women dying during childbirth, life expectancy for women has gone up. According to the latest CDC data, women in the United States live close to five years longer than men, on average. “Some experts argue that there’s a genetic component, while others theorize that it has to do with differences in risk-taking,” says Dr. Anderson.

Why do some races have a shorter life expectancy?

On average, black Americans have a shorter life expectancy than white Americans, and Hispanic people living in the United States have the longest life span of all three groups. About 76 out of 100 Hispanic Americans will live until at least 75 years of age, compared with about 70 white Americans and approximately 60 black Americans.

It’s not clear why black Americans die sooner. “We haven’t identified any real genetic component that would cause this difference,” says Anderson. It could be due to culture and diet, and there may be significant environmental factors that contribute.

As a group, a higher percentage of black Americans have heart disease than white Americans, according to the American Heart Association. Although the gap in life expectancy between black and white populations has begun to close — it decreased by 2.3 years from 1999 to 2013, according to the CDC — but it still exists. Stress, more limited access to health care, and cultural factors all play a role, says Anderson.

Hispanic Americans may have the longest life span because they are less likely to die from a number of health conditions, including cancer, heart disease, chronic lower respiratory diseases, stroke, diabetes, and suicide, according to the CDC.

Is U.S. life expectancy increasing?

The long-term increase in life expectancy over the past century is largely due to two factors. “From 1900 until 1950 and then from 1950 to 2000, there was a fairly dramatic increase in life expectancy, primarily due to control of infectious diseases,” says Anderson, citing significant discoveries in antibiotics and vaccines and improvements in sanitation.

Since 1950, gains in longevity are mostly due to advances in the prevention and treatment of chronic diseases, mainly heart disease and stroke. “There’s also been an improvement in the cancer death rates beginning in the mid-1990s,” Anderson says. Cardiovascular disease and cancer are the two leading causes of death in the United States, accounting for about 40 percent of total deaths.

Life expectancy has actually declined slightly over the past three years, according to the CDC. Although the CDC says the trend is largely driven by drug overdose and suicide, there is another, more significant factor: the obesity epidemic.

“I think it’s fair to say that we are already seeing the impact of obesity on life expectancy,” Sun says. “A lot of people out there blamed the opioid crisis or drug overdose for the decrease in life expectancy, but the obesity problem is much bigger.”

What are the most important factors that determine how long you live?

“Basically any factor that influences mortality also contributes to life expectancy, because mortality is how life expectancy is calculated,” says Sun. Blood pressure, cholesterol levels, body mass index, and diabetes are established risk factors for chronic diseases like heart disease and stroke, and people who have those diseases have a shorter life expectancy.

Okay, I haven’t had the healthiest lifestyle, and now I’m over 50. Am I doomed?

“It’s never too late to adopt a healthier lifestyle,” says Sun. If a person has spent decades eating an unhealthy diet or being physically inactive, they may or may not have developed certain chronic conditions like diabetes or heart disease. Still, “If those individuals move their diet and exercise habits from the unhealthier end of the spectrum to the healthier side, they can improve their life span,” Sun says. “Just follow common sense: no smoking, avoid alcohol or drug abuse, eat a healthy diet, engage in physical activity, ensure proper healthcare coverage, and try to stay positive and optimistic.” 

If you need more incentive to make lifestyle changes, consider this: Research shows that older adults are enjoying themselves more than just about everyone else. According to a survey of 1,546 Californians ages 21 to 99, people in their nineties were the most content. The research, published in August 2016 in The Journal of Clinical Psychiatry, found that older people were happier and less depressed, and had less anxiety than younger people.

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Confusion About Medicare Plagues Older Workers

Contributions to health savings accounts can trip up enrollment after the age of 65.

INVESTMENT NEWS November 9, 2021

By Mary Beth Franklin

A friend contacted me the other day with questions about enrolling in Medicare now that their youngest child has aged out of their employer-based group health insurance plan. She figured she and her husband could save a lot of money on health insurance premiums by switching from family coverage to Medicare, since they are both over 65.

I hated to break the bad news to her, but in their case, enrolling in Medicare now may not generate the savings she had envisioned. There were lots of questions to answer and numbers to crunch.

Consider the facts. Two spouses, both over 65, want to continue seeing their current doctors and enroll in original Medicare, which is accepted anywhere in the country, rather than a private Medicare Advantage plan that can limit coverage to in-network providers.

Medicare Part A hospital insurance is premium-free to anyone who has paid FICA payroll taxes for at least 10 years (or is married to someone who did). Medicare Part B, which pays for doctors’ fees and outpatient services, has a monthly premium, plus additional surcharges for higher-income beneficiaries.

In 2022, the standard monthly Part B premium is $170.10 per month. In addition, individuals with incomes over $91,000 and married couples with joint incomes over $182,000 pay an income-related monthly adjustment amount, or IRMAA, surcharge ranging from an extra $68 per month to an extra $408.20 per month per person, depending on their income.

Optional Part D prescription drug policies are also subject to high-income surcharges. And the couple would still need to buy two supplemental Medigap policies to cover their out-of-pocket costs.

Suddenly, Medicare wasn’t looking like the bargain my friend had hoped for.

But wait, there’s more.

Those high-income surcharges for Medicare Parts B and D are based on the last available tax returns. So if she and her husband enrolled in Medicare to begin in 2022, their 2022 premiums and surcharges would be based on the 2020 tax returns that they filed in 2021. With both spouses still working, they would definitely be hit with monthly IRMAA surcharges.

IRMAA surcharges can be appealed if the income used to determine the surcharge has declined due to a life-changing event, such as marriage, divorce, widowhood or retirement. But since this couple is still working, there would be no immediate escape from any high-income surcharge imposed in 2022.

Then there’s the issue of health savings accounts. HSAs offer a triple tax break when paired with a high-deductible health insurance plan. Contributions are tax-deductible, savings grow tax-free, and distributions are tax-free when used to pay for qualified medical expenses during your working years and beyond.

Both my friend and her husband make annual contributions to their individual health savings accounts. But once they enroll in Medicare –  even if it’s just in premium-free Medicare Part A – they can no longer make contributions to an HSA, although they could continue to take tax-free distributions from an HSA to pay for qualified medical expenses.

And here’s the kicker: If you have a health savings account, you and your employer should stop contributing to it six months before you sign up for Medicare Part A to avoid a tax penalty.

I told my friend that they either needed to withdraw their HSA contributions for the last six months of 2021 if they plan to enroll in Medicare as of January, or they should stop funding their HSAs starting in the new year and delay signing up for Medicare until July, after the six-month look-back period has elapsed.

To make sure my advice was on point, I check in with my favorite Medicare expert, Dr. Katy Votava, author of “Making the Most of Medicare: A Guide for Baby Boomers,” and president of Goodcare.com, a company that assists consumers and financial advisers with health insurance, Medicare and long-term care decisions.

Dr. Katy agreed with my advice but raised some additional points.

“You are on point with the HSA withdrawal and timing issue,” she wrote in an email. “In addition, I suggest they do the math of what the cost difference would be to enroll in Medicare Jan. 1 versus July 1, accounting for not only the cost of the IRMAA but other coverages such as Medigap, Medicare Part D, or Medicare Advantage.”

If the couple wanted to sign up for Medicare beginning in January, they could withdraw any excess contributions from their HSA penalty-free by using the “mistaken contribution” form, Votava explained.

In the end, my friend decided they would stick with their employer-provided group health insurance until her husband retires and their health insurance ends. That will create a new “special enrollment period” for them when they can sign up for Medicare penalty-free within eight months of losing their employer health insurance. But they’ll only have 63 days to sign up for a Part D prescription drug plan penalty-free.

More rules. More deadlines. It doesn’t get any easier. But ignoring them can be a costly mistake.

_____________________________

Greg Says advises that people facing decisions such as the one described in the article, should seek the advice of a licensed and certified health insurance advisor who specializes in Medicare.

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‘Effectively Overcharges Seniors’: AARP Rakes In Record Profits Selling Brand Royalties While Overcharging Members

By Harry Wilmerding, Contributing Editor – THE DAILY CALLER

The American Association of Retired Persons (AARP) raked in massive profits in 2020, mostly from royalties on branded health insurance policies, not memberships, according to company financial documents.

AARP’s 2020 Form 990 shows that the organization reported $1.6 billion in revenue, with roughly $1 billion, or over 60%, from royalty revenue. Meanwhile, membership dues contributed under 20% of total revenue.

AARP’s 2019 Form 990 reported $1.72 billion in revenue, with royalties making up nearly 56% of revenue while membership dues contributed just 17%.

“The organization’s business effectively overcharges seniors who purchase insurance coverage from the organization – including Medicare supplemental policies, called Medigap insurance — to fund its own operations,” Juniper Research Group Founder and Chief Executive Chris Jacobs wrote in an August 2020 American Commitment report.

AARP is designated a 501(c)(4) nonprofit organization by the IRS, but the company has consistently made large profits due to the group’s marketing practices, according to the report.

“AARP functions less as a membership organization than as a marketing conglomerate with a liberal advocacy group on the side,” Jacobs told the Daily Caller News Foundation. “It charges so little for membership because it makes most of its money selling products to its members and taking a percentage of the cut – starting with insurance products sold by UnitedHealth.” The largest contributor to AARP’s royalty revenue is UnitedHealth Group, Jacobs told the DCNF.

AARP reported $283.7 million in revenue from UnitedHealth in 2007, around 57% of total revenue from royalties that year, according to the report. In 2017, AARP collected over $627 million from the health care giant, almost 70% of AARP’s royalty income that year.

UnitedHealth sells three separate health insurance policies using the AARP brand: Medicare Advantage, Medicare Part D, and Medigap, Jacobs told the DCNF. UnitedHealth pays AARP a “royalty fee” because it uses the organization’s brand to sell insurance.

The Medigap policies bring in the most revenue for AARP, earning it 4.95% of premiums paid on every dollar, Jacobs said. On the other hand, members using Medicare Advantage and Medicare Part D plans pay UnitedHealth, which then gives AARP only a flat licensing fee.

“For every additional dollar seniors pay in premiums, AARP adds more to its bottom line. This commission-type arrangement gives AARP every incentive to sell its members products they don’t want or need, just to make more money itself – the opposite of the way a supposedly consumer-based organization should be acting,” Jacobs said.

AARP did not respond to the DCNF’s request for comment.

AARP has been sued four times in the last four years by its members over its royalty fee structure, according to court documents. Courts ruled in favor of AARP in three of these lawsuits.  

Most recently, plaintiffs Jeremy Nichols and Leon Wilde led a class action claiming AARP and UnitedHealth made millions of dollars by illegally charging royalty fees to California senior citizens.

Specifically, the plaintiffs claimed that AARP mischaracterized fees paid by UnitedHealth as “royalty fees” to avoid taxes on income generated through the sale of insurance policies.

“Calling the commission a ‘royalty’ is merely a fiction created by Defendants to further their illegal scheme,” the plaintiffs said.

The House Ways and Means Committee investigated AARP in 2011, generating a report which was submitted to the IRS. The report highlighted key issues with AARP’s structure, including its royalty fee system.

“As this report has shown, AARP may be in violation of a number of the requirements imposed on organizations operating under a federal tax exemption,” the report stated.

“In particular, one might question whether AARP is primarily operating to promote the common good and general welfare given the fact the AARP has become increasingly dependent on hundreds of millions of dollars in royalty revenue from insurance companies,” the report read.

To be designated a 501(c)(4) organization, one must “not be organized for profit and must be operated exclusively to promote social welfare,” according to the IRS.

Although Greg Says acknowledges the appeal that the AARP brand has with seniors, it should never eliminate the need for due diligence when evaluating the suitability of an insurance product.

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Alzheimer’s Drug Cited as Medicare Premium Jumps by $21.60

By RICARDO ALONSO-ZALDIVAR  Nov. 12, 2021

WASHINGTON (AP) — Medicare’s “Part B” outpatient premium will jump by $21.60 a month in 2022, one of the largest increases ever. Officials said Friday a new Alzheimer’s drug is responsible for about half of that.

The increase guarantees that health care will gobble up a big chunk of the recently announced Social Security cost-of-living allowance, a boost that had worked out to $92 a month for the average retired worker, intended to help cover rising prices for gas and food that are pinching seniors.

Medicare officials told reporters that about half the increase is due to contingency planning if the program ultimately has to cover Aduhelm, the new $56,000-a-year medication for Alzheimer’s disease from pharmaceutical company Biogen. The medication would add to the cost of outpatient coverage because it’s administered intravenously in a doctor’s office and paid for under Part B.

The issue is turning into a case study of how one pricey medication for a condition afflicting millions of people can swing the needle on government spending and impact household budgets. People who don’t have Alzheimer’s would not be shielded from the cost of Aduhelm, since it’s big enough to affect their premiums.

The new Part B premium will be $170.10 a month for 2022, officials said. The jump of $21.60 is the biggest increase ever in dollar terms, although not percentage-wise. As recently as August, the Medicare Trustees’ report had projected a smaller increase of $10 from the current $148.50.

“The increase in the Part B premium for 2022 is continued evidence that rising drug costs threaten the affordability and sustainability of the Medicare program,” said Medicare chief Chiquita Brooks-LaSure in a statement. Officials said the other half of the premium increase is due to the natural growth of the program and adjustments made by Congress last year as the coronavirus pandemic hit.

The late Friday afternoon announcement – in a time slot government agencies use to drop bad news – comes as Congress is considering Democratic legislation backed by President Joe Biden that would restrain what Medicare pays for drugs. However, under the latest compromise, Medicare would not be able to negotiate prices for newly launched drugs. The news on Medicare premiums could reopen that debate internally among Democrats.

“Today’s announcement … confirms the need for Congress to finally give Medicare the ability to negotiate lower prescription drug costs,” Rep. Frank Pallone, D-N.J., said in a statement. “We simply cannot wait any longer to provide real relief to seniors.” Pallone has been a proponent of the original House version of the legislation, which took a tougher approach toward the pharmaceutical industry.

Alzheimer’s is a progressive neurological disease with no known cure, affecting about 6 million Americans, the vast majority old enough to qualify for Medicare.

Aduhelm is the first Alzheimer’s medication in nearly 20 years. It doesn’t cure the life-sapping condition, but the Food and Drug Administration determined that its ability to reduce clumps of plaque in the brain is likely to slow dementia. However, many experts say that benefit has not been clearly demonstrated.

Medicare has begun a formal assessment to determine whether it should cover the drug, and a final decision isn’t likely until at least the spring. For now, Medicare is deciding on a case-by-case basis whether to pay for Aduhelm.

Cost traditionally does not enter into Medicare’s coverage determinations. But in this case there is also plenty of debate about the effectiveness of Aduhelm. Last November, an FDA advisory panel voted nearly unanimously against recommending its approval, citing flaws in company studies. Several members of the panel resigned after the FDA approved the drug anyway over their objections.

A nonprofit think tank focused on drug pricing pegged Adulhelm’s actual value at between $3,000 and $8,400 per year – not $56,000 – based on its unproven benefits.

But Biogen has defended its pricing, saying it looked carefully at costs of advanced medications to treat cancer and other conditions. The company also says it expects a gradual uptake of the Alzheimer’s drug, and not a “hockey-stick” scenario in which costs take off. Nonetheless Medicare officials told reporters they have to plan for contingencies.

Two House committees are investigating the development of Aduhelm, including contacts between company executives and FDA regulators.

Medicare covers more than 60 million people, including those 65 and older, as well as people who are disabled or have serious kidney disease. Program spending is approaching $1 trillion a year.