When it comes to Medicare open-enrollment season, you could be thinking, “Been there, done that.” But as tempted as it may be to stick with your existing Part D prescription-drug policy or private Medicare Advantage plan, it’s never a good idea to go on cruise control.
Sure, it’s a headache to plow through the options, but you could save money and improve your coverage. You might discover that your current plan is boosting co-payments, dropping one of your drugs, or limiting certain services. It’s particularly important to check all options if you’ve developed health issues or have been prescribed new medications since last year. You can choose a plan for 2014 from Tuesday to Dec. 7.
You don’t have to make any changes because of the new health care law. Ignore scam artists who try to persuade you that the Affordable Care Act requires Medicare beneficiaries to buy a new health care policy or get a new Medicare card. It doesn’t. For the most part, the new law is directed toward people under 65 who will buy individual coverage in 2014.
“They’re taking advantage of people’s fears and anxieties and lack of information,” said Elaine Wong Eakin, executive director for California Health Advocates.
At the new year kicks off, you’ll have something to celebrate: Under the health care law, Uncle Sam is continuing to shrink the Part D “doughnut hole,” the period in which you pay out of pocket for medication. Next year, you’ll get a 52.5 percent discount on brand-name drugs you buy while in the coverage gap. The federal subsidy for generic drugs in the doughnut hole rises to 28 percent next year, from 21 percent this year.
Look for changes to your current Part D or Advantage plan on your “annual notice of change,” which you should have received in late September. Details on 2014 plans will go online by Tuesday. Then go to Medicare.gov’s Plan Finder online tool (medicare.gov/find-a-plan). It can take a bit of patience – or perhaps require help from a computer-savvy friend – but you’ll be able to compare prices, co-payments, deductibles and drug tiers for all Part D and Advantage plans. You can also get help over the phone or in person from your State Health Insurance Assistance Program (shiptalk.org; 1-800-633-4227).
You can compare Part D plans, Advantage plans and Medigap supplemental insurance policies at eHealthMedicare.com and enroll.
SELECTING A PLAN
Average premiums for Part D plans will rise slightly in 2014 – by just $1 dollar, to $31 a month, according to the Centers for Medicare and Medicaid Services. But out-of-pocket costs can still vary from plan to plan. The policy with the lowest premiums might end up costing you more if it charges higher co-payments for drugs. And make sure all of your drugs are on the plan’s formulary.
It’s particularly important to watch out for two big trends. One is the change in the way plans are using tiers to boost drug prices. The other is the rise in plans’ use of preferred pharmacies.
Insurance companies typically use four or five tiers of prescription-drug prices. The lowest co-payments – some $5 or less – are offered for preferred generics, while there’s higher cost-sharing for non-preferred generics. Preferred and non-preferred brand-name drugs have even higher out-of-pocket costs. Topping the cost list are specialty drugs. Part D plans differ on how they define preferred and non-preferred drugs.
Co-payments continue to rise, and many insurers are switching to co-insurance, in which your share of the costs is based on a percentage of the total price of the medications (such as 25 percent of the cost of specialty drugs). If your insurer is imposing co-insurance on your brand-name drugs, ask your doctor if you can switch to lower-cost drugs before you choose a plan for 2014.
The plan with the best deals on brand-name drugs may be different from the one with the best deals for generics. And keep in mind that several big-name drugs are scheduled to go generic in 2014, including Nexium, Lunesta and Celebrex.
For one-stop shopping, you can get a private Advantage plan to cover all your drugs and medical expenses under one private plan. You won’t have to buy a separate Part D or Medigap policy. You can switch from traditional Medicare to Advantage – or from one Advantage plan to another – during open-enrollment season.
Enrollees in Advantage pay Part B premiums. And they could pay additional premiums to the Advantage plan – still usually a good deal compared with premiums for Part D and Medigap plans.
Average premiums for Advantage plans are about $35 a month this year, but some popular plans with preferred-provider organizations are expected to boost their premiums significantly, even doubling the cost, said Ross Blair, senior vice-president of eHealth Medicare, a division of eHealth Inc..
“There will be some sticker shock for people in PPO plans,” he notes. A PPO is a health plan that has contracts with a network of providers.
Meanwhile, some Advantage HMO plans with limited networks will continue to charge zero premiums to attract customers, Blair says. But, he says, “They are going to increase their co-pays and co-insurance rates, in some cases significantly – sometimes from $15 to $30 for doctor’s visits.” Blair says seniors will “get their annual notices and they’ll see their premium stays at zero and they probably won’t read further. Then they’ll be surprised when the co-pays are higher.”
If you’re sticking with traditional Medicare, it could be a good time to assess your Medigap plan. These private insurance plans don’t have the same open-enrollment period as Part D and Advantage. Medigap plans generally fill in the gaps of traditional Medicare.
Going with Part B and a Medigap plan is a good option if you want to be able to use any doctor who accepts Medicare, especially if you travel in the U.S. often. The premiums tend to be higher than those of Advantage plans, but you usually have fewer other out-of-pocket costs. Medigap policies don’t cover prescription drugs, so you will need to buy Part D coverage.
Under federal law, all Medigap policies with the same letter designation must provide the same coverage, even though prices can vary by insurer. A 65-year-old woman in Miami could buy Plan F, the most popular plan, for less than $260 per month, according to eHealthMedicare.com, but several companies charge more than $300 a month for the same coverage.