A Date Change for Medicare Open Enrollment and Other Important Updates

The following article discusses Medicare basics for those new to Medicare, as well as detailing important updates such as a date change for the open enrollment period. If there’s one mantra for the open enrollment season, it’s “review your options.”

Medicare Basics:

Medicare is our country’s health insurance program for people age 65 or older. (Certain people younger than age 65 can qualify for Medicare, too.) The program helps with the cost of health care, but it does not cover all medical expenses or the cost of long-term care. You can file for Medicare 3 months before and 3 months after the month you turn 65. Generally, we advise people to file for Medicare benefits 3 months before age 65 to avoid delays in coverage. If you apply during the 3 months before age 65, your coverage will generally start on the first day of the month of your 65th birthday. If you wait to file in the month you turn 65 or in the 3 months following that month your Part B coverage will be delayed. If you are already receiving Social Security benefits, you will automatically be enrolled in Medicare Parts A and B without an additional application. However, because you must pay a premium for Part B coverage, you have the option of turning it down. You may file for Part B at a future date but you may pay a penalty for late enrollment, unless you were covered under an Employee Group Health Plan. You will receive a Medicare card about two months before age 65. – submitted by Kirk Larson, Social Security Western Washington Public Affairs Specialist

The ABCs of Medicare

…by Ron Pollack, Executive Director, Families USA

Even folks who’ve had Medicare for years don’t know all the ins and outs. And those who will soon be getting Medicare can find the whole thing very confusing. Here are some of the basics.

Who gets Medicare? Medicare provides health insurance for 47 million seniors and people with disabilities. Almost half of the people with Medicare have limited incomes, and nearly as many have multiple health problems, like diabetes or high blood pressure. About 80 percent of people with Medicare have outpatient and hospital coverage directly from the federal government (sometimes called “original Medicare”). The rest have coverage through Medicare Advantage--plans that are run by private insurers that contract with the federal government. Private plans must provide at least the same benefits as original Medicare, and most provide prescription drug coverage. People in original Medicare can also purchase a separate prescription drug plan from a private insurer.

Generally, if you or your spouse worked enough years to qualify for Social Security benefits, you will qualify for Medicare. Eligibility for seniors begins when you turn 65. If you have a disability, you become eligible for Medicare twenty-four months after you have been awarded Social Security disability.

What are Medicare’s ABCs? Medicare’s structure can be confusing. Original Medicare is divided into three parts: A, B, and D. Medicare Part A covers hospitalization. Medicare Part B covers outpatient care, like doctors’ visits. Part D covers prescription drugs through private prescription drug plans. What about Part C? Part C is the official name for the Medicare Advantage program.

Understanding the parts of Medicare matters, especially when it comes to premiums and enrollment. Most people who receive Social Security retirement or disability benefits receive Part A automatically and have no premium. But, in order to receive outpatient (Part B) and prescription drug (Part D) coverage, you must sign up when you become eligible—or you’ll have to pay a penalty. Both Parts B and D charge premiums that are usually deducted from enrollees’ Social Security benefits (Part D premiums can also be paid directly to the plan). High-income beneficiaries (those with incomes above $85,000 for an individual or $170,000 for a couple) must pay higher premiums. Low-income people can qualify for Part D Extra Help or Medicaid that cover some or all of Medicare’s out-of-pocket costs.

Some people who work past age 65 may not have to take Medicare when they turn 65. But they need to be careful: Once they leave their job, they need to sign up for Medicare right away to avoid any late enrollment penalties. People who work for smaller employers (those with fewer than 20 employees) need to sign up for Medicare at age 65 to avoid these penalties.

When you first sign up for Medicare, you can choose either original Medicare or a Medicare Advantage plan. Every fall, you have the option to keep your plan or choose a new plan for the following year. This year, the enrollment period is earlier than in previous years: It will begin on October 15 and run until December 7 (for plan choices that go into effect on January 1, 2012). Medicare provides a guaranteed set of benefits to everyone who qualifies. This includes hospitalization, outpatient visits, lab tests, and prescription drug coverage. Like any insurance policy, it has some areas where coverage is excellent and some areas where coverage is weaker.

Thanks to the Affordable Care Act (the new health care law), preventive benefits and prescription drug coverage are now significantly better. Most preventive services are available without copayments, and the coverage gap (the “doughnut hole”) in Part D is closing. However, most people will still need some kind of supplemental coverage, either from a former employer, Medicaid, or from a private supplemental (or “Medigap”) policy.

If you have questions about Medicare, there are a lot of free resources than can help you. Start by visiting the Medicare website at www.medicare.gov or by calling 1-800-MEDICARE.In addition, every state has a State Health Insurance Assistance Program that provides free, unbiased, personalized counseling to anyone with Medicare. Washington State’s SHIBA Helpline can be reached at 1-800-562-6900.

Medicare Open Enrollment Period

A Date Change

It’s a new year, and there are new dates to remember for Medicare’s enrollment season. Starting in 2011, the Fall Open Enrollment Period (also known as the Annual Coordinated Election Period, or ACEP) begins on October 15 and lasts through December 7. During Fall Open Enrollment, people with Medicare have the right to change their Medicare health and drug coverage options without restriction. They can make as many changes as they need, and the last change they make on or before December 7 will take effect on January 1, 2012.

Medicare Enrollment Tried-and-True Advice

If there’s one mantra for the open enrollment season, it’s “review your options.” Every year, the Medicare Rights Center advises people with Medicare to carefully consider how they get their Medicare benefits; most people are allowed to make a change only during Fall Open Enrollment. Certain universal advice applies, no matter what Medicare coverage you have:

• You should review all of your coverage options even if you are happy with your current coverage, because plans change their costs and benefits every year.

• Read your Annual Notice of Change (ANOC), which you should have received by September 30. It will list the changes in your plan, such as the premium and copays, and will compare the benefits in 2012 with those in 2011. It is very important that you read your ANOC and consider all of your options, since many plans make changes every year, and your current plan may not be your best choice for 2012.

• Shop around to find a plan that best meets your needs and makes the most financial sense to you.

• If you have Original Medicare and a supplemental plan (often called a Medigap) and are happy with your coverage, you do not need to make a change.

• MRC recommends that if you decide to enroll in a new plan, do so by calling 800-MEDICARE rather than the plan itself.

Health Coverage Option

If you are considering enrolling in a Medicare Advantage (MA) plan:

• Even if you are happy with your current coverage, you should review all of your options, including Original Medicare and a Medigap.

o Before making your final choice during Fall Open Enrollment, call your State Health Insurance Assistance Program (SHIP) to find out if you will have the right to purchase a Medigap in your state, what options you have, and what consumer protections your state provides.

o See the Medicare Advantage Disenrollment Period section below for more information on Medigap rules.

• If you are considering an MA plan, make sure you understand how it works. Take the time to ask questions, such as:

• Will I be able to use my doctors or other providers I want to see?

o Are they in the plan’s network and are they taking new patients who have this plan?

o Which specialists, hospitals, home health agencies and skilled nursing facilities are in the plan’s network?

o How much will it cost to see my primary care physician? A specialist?

For more questions to ask, see “What questions should I ask before joining a Medicare private health plan?” at www.medicareinteractive.org

Drug Coverage Options

If you are considering switching to a new Part D plan, either as part of an MA plan or as a stand-alone prescription drug plan (PDP):

• Whether you are considering a new plan or thinking of staying in your old plan, review your ANOC and pay particular attention the summary of the new formulary (list of covered drugs).

• If you use the online Plan Finder tool at www.medicare.gov to select the best plan for your needs, call the plan and confirm the information you’ve gathered with a plan representative before you enroll. Keep a record of your conversation with the plan representative. This will protect you if you discover that the information on which you based your decision to enroll in a plan was inaccurate.

• For more information, see “How do I compare Medicare private drug plans?” at www.medicareinteractive.org

Changes in 2012

Doughnut Hole

• Just as in 2011, there will be a 50 percent discount for brand-name drugs during the coverage gap (also known as the doughnut hole). The discount for generics during the doughnut hole will increase to 14 percent.

Medicare Advantage

• Starting in 2012, Medicare Advantage (MA) plans will not be able to charge enrollees for preventive care services that are free for people with Original Medicare. However, if Medicare Advantage enrollees see providers that are not in their plan’s network, charges will typically apply. For more information, see “Medicare-Covered Preventive Services” at www.medicareinteractive.org

Medicare Advantage and Part D

• Starting in 2012, people with Medicare will have a Special Enrollment Period (SEP) to enroll in an MA or Part D plan with a five-star rating (on a scale of one to five).

o The SEP can be used at any time during the year, but only once per year, and to make only one change.

• For example, consumers with Original Medicare and a PDP could enroll in a five-star Medicare Advantage plan with drug coverage (MA-PD) or in a five-star PDP. In the former case, the consumer would be effectively disenrolled from the PDP and would have drug coverage and health coverage through the MA-PD. In the latter case, he or she would retain Original Medicare and receive drug coverage through the new PDP.

• In another scenario, a consumer in an MA-PD who enrolls in a five-star MA-only plan (Medicare Advantage without drug coverage) would typically not be able to join a PDP until the next Fall Open Enrollment Period, and would therefore be without drug coverage until the following year.

o Different plans have different networks of providers and pharmacies, so consumers who choose to enroll in a five-star plan may have to choose a new doctor or pharmacy.

o For these reasons, Medicare Rights advises consumers to think very carefully before enrolling in a five-star plan outside of Fall Open Enrollment.

o Plan ratings will be available at www.medicare.gov/find-a-plan beginning in early October.

Medicare Advantage Disenrollment Period

• The Medicare Advantage Disenrollment Period (MADP) runs from January 1 to February 14 each year. During the MADP:

o People who are unhappy with their Medicare Advantage (MA) plan are allowed to switch to Original Medicare, and may also add Medicare prescription drug coverage, even if their MA plan did not include drug coverage.

o People in MA plans CANNOT switch to another MA plan.*

o People with Original Medicare CANNOT make any changes.*

*EXCEPTION: People have an SEP to enroll in a five-star MA or Part D plan at any point during the year, including during the MADP. (See explanation above under Changes in 2012.)

• Choose your health care options carefully during Fall Open Enrollment. If you are considering an MA plan for 2012, be aware that if you become unhappy with your MA plan, you have the option to switch to Original Medicare during the MADP. But remember, you may not be able to purchase a Medigap to fill in the gaps in coverage.

The rules and consumer protections for Medigaps vary from state to state. Some consumers may have access to Medigaps, but may not be protected from higher 3 premiums, coverage exclusions or waiting periods. Before making your final choice during Fall Open Enrollment, call your State Health Insurance Assistance Program (Washington’s SHIBA Helpline can be reached at 1-800-562-6900) to find out if you will have the right to purchase a Medigap in your state, what options you have, and what consumer protections your state provides.

Good to Know

• The average Medicare prescription drug plan premium will not increase in 2012; it will remain around $30. However, premiums for specific plans and regions vary from year to year. It is important for Medicare consumers to examine their ANOC carefully to determine if and how their plan’s costs are changing, and if it makes financial sense to explore other options.

• Part D formularies (lists of covered drugs) often change from year to year. Drugs and restrictions can be removed or added. Check your plan’s new formulary to see how the drugs you take will be affected. Your ANOC should include a summary of the new formulary. You can also get a complete copy of the formulary on your plan’s website or by calling your plan.

• Part D plans can place coverage restrictions, such as quantity limits, prior authorization and step therapy (requiring you to try another drug before the plan will cover the prescribed drug) on certain drugs. Make sure to get the facts about coverage before you enroll in a plan.

• A growing trend is for Part D plans to differentiate between “preferred” and “nonpreferred” pharmacies within their network. You pay the least when you use preferred pharmacies. Make sure the pharmacies you use are “preferred.”

• Again in 2012, people with higher incomes will pay higher Part B and Part D premiums.

Individuals with incomes over $85,000 ($170,000 for couples) will pay the higher premiums. Note: The premiums listed on Plan Finder are the basic premiums. They do not reflect the additional amount you must pay if you have high income, even if you enter personalized information.

• The Medicare private plan marketplace continues to be streamlined to ensure meaningful differences exist among plans offered by the same company. Plans from the same company that offer nearly identical benefits have been consolidated to help simplify the choices available to consumers. People who were in a plan that was consolidated with other plan(s) will automatically be enrolled in a plan from the same company that has benefits most like those they had. Consolidated plans are not the same as terminated plans, and the rights accorded to people in each group are different.

o People whose plans have been consolidated with others are automatically enrolled into another plan, but they have the right to choose and enroll in a different plan. They have until December 7 to choose a plan. People will find out which plan they have been automatically enrolled into in their Annual Notice of Change (ANOC), which they should have received by September 30.

o Plans that are terminated no longer participate in Medicare. Every year there are plans that are terminated.

• People whose plans have been terminated are entitled to a Special Enrollment Period (SEP), and have until February 29 to choose a new plan. If they do not do so, they will automatically be enrolled in Original Medicare (if their MA plan is terminating) or they will lose drug coverage (if their drug plan is terminating).

• Note, however, that if they were in an MA plan with prescription drug coverage that terminated and choose Original Medicare or allow themselves to be automatically enrolled in Original Medicare, they must also choose a PDP or else they may lose drug coverage.

This article is courtesy of the Medicare Rights Center, a national, nonprofit organization that works to ensure access to affordable health care for older adults and people with disabilities. Their free, online resource, “Medicare Interactive” can be viewed at www.medicareinteractive.org.