Open enrollment for Medicare will begin on Thursday.

From Oct. 15 to Dec. 7, you can make changes to your Medicare plan, including prescription drug coverage, which will take effect on Jan. 1, 2021.

You have to have Medicare Part A (covers hospital care) and Part B (covers physician and outpatient care) in order to get Part D, which is the Medicare plan for prescription drugs.

Or, you can forgo Parts A, B and D and opt for Part C, a Medicare Advantage Plan, for prescription drug coverage. More on that later.

During open enrollment, you can enroll in a Part D plan if you don’t have one; you can switch from one drug plan to another; and/or you can drop your Part D plan. If you’re happy with your plan, you don’t have to worry about doing anything.

There are over 46 million Americans enrolled in Part D coverage, according to the Centers for Medicare & Medicaid Services (CMS).

Here is a look at the changes in store for prescription drugs.

Lower insulin costs for some Part D plans

Patricia Neuman, ScD, MS, is a senior vice president of the Henry J. Kaiser Family Foundation and is director of the Kaiser Family Foundation’s Program on Medicare Policy. She’s also the executive director of the Foundation’s Project on Medicare’s Future.

Neuman says that one of the significant changes to Part D for 2021 is that Medicare beneficiaries can expect to pay much lower prices for insulin.

“The administration would cap the amount that people in Part D plans would pay for insulin,” she said. “There will be a monthly cap on amount of payments.”

This would depend on what types of plans people sign up for and what types of insulin they take, she said, though a broad range of insulin is supposed to be covered under The Part D Senior Savings Model.

The Part D Senior Savings Model, which CMS announced in March, is a voluntary model. Under the model, participating Part D plans offer lower out-of-pocket costs, at a maximum $35 copay for a month’s supply of insulin. The cap does not apply to Medicare Advantage plans.

Based on CMS’s estimates, beneficiaries who use insulin and join a plan participating in the model could see average out-of-pocket savings of $446, or 66 percent, for their insulin, funded in part by manufacturers paying an estimated additional $250 million of discounts over the five years of the model.

Affordable Care Act phases out ‘Doughnut Hole’

Also noteworthy, the coverage gap, also referred to the ‘donut hole or doughnut hole,’ has been narrowing as a result of the Affordable Care Act.

During the coverage gap, when your drug plan had reached its limit for covered drugs, you would have had to pay all costs out-of-pocket for your prescriptions up to a yearly limit.

“The deal now is that pharmaceutical companies have agreed to give a 50% discount on name-brand drugs — the government pays 25% and you pay 25%,” said Steven Ullmann, director of the Center for Health Management and Policy at the Miami Herbert Business School at the University of Miami.

“Once you hit a catastrophic amount, which this year is $6,350, then you pay 5% or less for price of the drug.

“The doughnut hole has been going away step by step since the passage of the Affordable Care Act,” Ullmann said. “Ultimately, you’re not responsible for as much of the out-of-pocket costs as you were prior of the doughnut hole going away.”

What to expect next year for Medicare drug plans

Ullmann noted there are 27 drug plans in Miami-Dade to choose from and within each plan (Humana and Florida Blue are some examples) there are multiple plans as well. The plans have a cost, including a monthly premium and deductible.

Most Medicare drug plans have their own list of covered drugs, called a formulary. Plans cover both generic and brand-name prescription drugs. The formulary includes at least two drugs in the most commonly prescribed categories and classes, according to CMS.

Whether to go with Medicare or Medicare Advantage

As far as plans, Ullmann said those 65 and older are presented with a fork in the road, whether to choose Part C (Medicare Advantage plans, which include drugs), or Part D, combined with Parts A and B.

“Both have advantages and disadvantages,” he said of Parts C and D.

“For A, B and D, you have more out-of-pocket costs,” he said. “There are premiums associated with Parts B and D.”

But, you have more options.

“You can go anywhere in the country with your Medicare card and most doctors and hospitals will take it,” he said.

The Part C (Medicare Advantage) plan, where government has contracted with private insurance companies to provide health insurance, is one-stop shopping, says Ullmann.

Part C includes hospital and physician care, dental care and pharmaceuticals. Eyeglass prescriptions are also included in some plans.

“It’s easier and can be cheaper, but what you compromise on is choice,” he said.

“You’ll be required to use specific doctors and hospitals listed. If you go out of network, you’ll bear significant costs, if not the full costs of care.”

Possible expansion of telemedicine

One of the big changes stemming from the coronavirus pandemic is the expansion of telemedicine.

“Prior (to COVID) doctors were reluctant to do telemedicine because they couldn’t bill for it,” says Ullmann.

As a result of COVID, CMS now pays for these types of virtual visits.

Ullmann said the technology associated with telemedicine has also been enhanced significantly, as well as the ability to conduct evaluations and to prescribe medications.

Emma Boswell Dean, Ph.D., an assistant professor of Health Management and Policy at the Miami Herbert Business School at the University of Miami, says that an eventual COVID-19 vaccine would be covered for Medicare enrollees at no out-of-pocket cost.

“But this will be administrated through the Part B program, which covers physician-administered drugs,” she said. “Experimental drugs such as Remdesivir have been provided in the hospital largely through Part A (in-patient hospital benefit), so these costs have not yet impacted Part D, but certainly could in the future,” she said.

Waiving prior authorization requirements

Other changes include waiving prior authorization requirements, allowing 90-day supplies for enrollees and encouraging mail and home delivery of prescriptions, according to Dr. John E. McDonough, DrPH, MPA, a professor of practice at the Department of Health Policy & Management and the director of Executive & Continuing Professional Education (ECPE) at Harvard T. H. Chan School of Public Health.

As far as how Medicare’s Part D coverage changed from last year to this year, McDonough said, “The income level at which catastrophic coverage kicks in rose from $5,100 in 2019 to $6,350 in 2020, a large jump.”

Medicare may be insolvent in 2024, report says

“The trustees of the Medicare system have indicated that Medicare becomes insolvent in the year 2026. It goes broke,” he says. “It cannot cover the incoming costs associated with it.”

And the most recent projections from the Congressional Budget Office estimate that the Medicare Hospital Insurance Trust Fund, which funds hospitalizations, will be insolvent by 2024, two years earlier.

So what does this mean for the over 40 million people who are on Medicare currently?

“It’s a critical issue,” says Ullmann, “and COVID can move that up potentially by a year (to 2025).

“There are a lot of expenses with the population aged 65 and older because they’re more vulnerable to COVID, so that’s an issue,” he said.

Medicare is funded by current workers paying for retirees. The problem: Retirees are growing at a much faster rate than the current workers.

“So you have fewer people funding a much larger population growth,” he said.

How to solve Medicare’s solvency issues

There are three variables to help solve this quandary, said Ullmann: Cut benefits or increase the age of eligibility; increase Medicare taxes to those who are working; cut reimbursements to providers such as hospitals and physicians.

“We’ve already seen cutbacks in reimbursement to providers,” said Ullmann. “Medicare pays less today than they did 10 years ago per unit of service.”

“Any significant changes have to go through Congress,” he said. “It will have to be legislated.”

How to get help in choosing a plan

▪ Kathleen Sarmiento is the SHINE Medicare/Medicaid counseling program director at Alliance for Aging.

“In South Florida, Medicare Advantage Plans (HMOs, PPOs, and Special Needs Plans) usually include the Part D prescription drug coverage,” said Sarmiento. “There are only a few Medicare Advantage plans that do not include the Part D prescription drug coverage in South Florida.”

“Because the drug prices change every year, it is important for everyone who has Medicare to do an insurance comparison every fall,” Sarmiento advised.

To do a comparison, anyone can use the www.medicare.gov planfinder tool if they have access to a computer, or they can call SHINE or call 1-800-Medicare (1-800-633-4227).

▪ The SHINE program can help anyone who would like do an insurance comparison. Representatives can walk anyone through using the www.medicare.gov planfinder tool to find the least expensive Part D plan or Medicare Advantage Plan that covers their prescription medicine.

SHINE’s services are free and they are confidential. To be connected with the SHINE program in your area, call 1-800-96-ELDER (1-800-963-5337) and ask for SHINE or go to www.floridashine.org and click on “Contact Us.”

The local phone number for SHINE if you live in Miami or the Keys is (305) 671-6356. The local phone number if you live in Broward County is (954) 745-9567. The local phone number if you live in Palm Beach County is (561) 684-5885.

Once you choose a Medicare drug plan, you can get prescription drug coverage by doing one of the following, according to CMS:

▪ Enroll on the Medicare Plan Finder or on the plan’s website.

▪ Complete a paper enrollment form.

▪ Call the plan.

▪ Call 1-800-MEDICARE (1-800-633-4227) for help with choosing a plan or finding and comparing providers.

When you join a Medicare drug plan, you’ll give your Medicare Number and the date your Part A and/or Part B coverage started. This information is on your Medicare card.

Extra Help Program can save you money, if you qualify

If you decide not to get Medicare drug coverage when you’re first eligible, you’ll likely pay a late enrollment penalty if you join later, unless you have other creditable prescription drug coverage through a group-health insurance plan from your employer, or if you have enrolled in the Extra Help program.

The Extra Help benefit is estimated to be worth about $5,000 per year.

To qualify for the program, one has to earn less than $19,140 in yearly income ($25,860 for a married couple) and have no more than $14,610 in savings, investments and real estate ($29,160 for a married couple).

You must apply to the program and can submit an application for Extra Help.

In 2020, prescription costs are no more than $3.60 for each generic and $8.95 for each brand-name covered drug for those enrolled in the program.

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