For the 54 million Americans on Medicare, it’s time for a tune-up. Open enrollment season begins Wednesday and runs through Dec. 7, a once-a-year-opportunity for beneficiaries to assess whether their current plan is still meeting their needs.
As usual, there’s good news and bad news.
“There aren’t a lot of significant changes, which is good news,” said Joe Baker, president of the Medicare Rights Center in New York. “But even when there aren’t seismic changes, there can still be some significant ones in individual plans that catch people off guard.”
For South Floridians, the most meaningful change may be this: As a result of consolidation among private insurers and at least one plan closing, there are fewer Medicare Advantage plans and Part D plans. This, however, may not be all bad.
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“Fewer plans may be good for the market as long as consumers have enough choices,” Baker added. “Sometimes when there are too many, it paralyzes people. They don’t make a decision and just stick with what they have even if it no longer meets their needs.”
Here’s a quick summary of what to expect from Medicare 2015:
Original Medicare: The premium for Part B, which pays for doctors outside of a hospital stay, is staying the same at $104.90 a month, as is the yearly deductible of $147.
Part A, which covers many costs related to a hospital stay, has no monthly premium for most people. The yearly deductible, however, is going up $44, from $1,216 to $1,260 in 2015. The daily co-insurance which kicks in between 61 to 90 days in the hospital is also increasing to $315 from $304. The day-91-and-beyond co-insurance is going up as well, from $608 to $630.
Premiums for Part D prescription drug plans vary. The average monthly premium is estimated to be $32 for 2015, according to the Centers for Medicare and Medicaid Services. This is in addition to a surcharge that is indexed to income. For high-income seniors, the coming year’s monthly surcharges are slightly higher than they were in 2014.
Deductibles, the amount you must pay each year for your prescriptions before your Medicare prescription drug plan begins to pay its share, also vary from plan to plan, but no plan may have a deductible higher than $320 in 2015. Last year the highest deductible was $310. (Some Medicare drug plans don't have a deductible at all.)
The most important part of reassessing Part D plans, experts say, is making sure a beneficiary's medication is still covered. Plans often change their list of covered medications, or formulary.
“This can be a big problem,” said Edith Gooden-Thompson, area coordinator for SHINE, Serving Health Insurance Needs of Elders, a free program offered by the Florida Department of Elder Affairs and local area agencies to assist with Medicare, Medicaid, and health insurance questions. “We always recommend that you make sure your drugs are covered. If you take several medications and they’re brand name, check to see which have become generic because the plan may no longer cover the brand name one.”
Medicare Advantage: In Miami-Dade, Medicare Advantage HMOs — health maintenance organizations — do not charge a premium, making them very popular with seniors. PPOs, also known as preferred provider organizations, do. In Broward, however, both types of plans charge a premium. PPOs are more likely than HMOs to have higher prices, namely because they have more benefits, including more doctors. Many Advantage plans offer Part D prescription coverage as well as some dental and vision coverage.
The drawback to some of these plans is their limited network of physicians. “For most people the biggest reason they go into a plan and stay with the plan is their doctor,” said Kathy Sarmiento, the SHINE liaison for the Alliance for Aging in Miami-Dade. “That’s their main relationship.”
Because doctors can drop out or be dropped from Advantage plans, Sarmiento suggests Medicare beneficiaries make sure their doctor is still within their plan’s network. In addition, because recipients are responsible for cost sharing with co-insurance payments, they should try to predict the costs of any procedures they may need in the coming year. The out of-pocket limit for in-network services tops out at $6,700 in 2015, which can be a strain on many seniors’ wallets.
“Consumers need to look at the whole picture and compare costs,” Sarmiento added.
Donut Hole: The coverage gap — when the amount a Medicare recipient pays for her prescriptions suddenly increases — is shrinking, thanks to healthcare reform. Now consumers no longer have to pay the full cost of drugs when they hit this threshold.
Currently the donut hole is reached when drug expenses hit $2,850. To climb out of that hole, a consumer would have to pay a total of $4,550 out-of-pocket for covered drugs, starting in the beginning of the year. When this out-of-pocket limit is reached, catastrophic coverage kicks in. The $1,700 difference between the $2,850 and the $4,550 is the donut hole. This year a Medicare recipient pays 47.5% of the plan’s cost for covered brand-name prescription drugs in the gap and 72% for generic.
In 2015, a recipient will fall into the donut hole when out-of-pocket drug expenses reach $2,960. To climb out, a consumer’s costs must reach $4,700. But while in the gap, the consumer will pay 45 percent of the cost of a brand-name drug and 65 percent for generic. A beneficiary's share of drug costs during the gap will eventually be reduced until it reaches 25 percent in 2020 for both brand-name and generic drugs.
▪ Start by reviewing your Annual Notice of Change, which you should already have received in the mail from your current Medicare Advantage plan and Part D plan. It should highlight any changes in the costs, benefits and rules for 2015. Does it still have the same doctors, hospitals and pharmacies you use? Are premiums rising? Are co-payments going up? Are the same services and drugs covered?
▪ Don’t choose a plan blindly. Shop around. Review your healthcare needs for the coming year. Ask yourself: What doctors and hospitals do I use most? What prescriptions do I need and where do I buy them? What chronic conditions must I treat? Once you assess your health situation, match it with the best policy for you.
▪ Check carefully to make sure your preferred physicians are still in your plan’s network. Also check your plan’s formulary for changes in the prescription drugs it covers.
▪ Seek help. For free, unbiased advice, call the Florida Elder Helpline at 1-800-963-5337 or visit the Florida Department of Elder Affairs' SHINE Program website at www.floridashine.org. Click on the Community Events tab to see a listing of enrollment events in your area. Also click on the Counseling Sites tab to locate counseling sites near you, or click on the Contact Us Tab to request assistance from a trained SHINE counselor.
Another important resource is the Medicare & You handbook beneficiaries received last month. Also visit the official Medicare site at www.Medicare.gov or call Medicare at 800-633-4227.