Open Enrollment for Medicare is underway, having begun October 15 and set to end December 7.
In case the 152 page Medicare.gov 2015 Medicare handbook is daunting, a more condensed overview of the changes may be beneficial. With millions of seniors covered under Medicare, a comprehensive look into what options are available can save literally billions of dollars for enrollees.
Overview Of Medicare Components
- Medicare Part A—covers many costs for hospital stays; has no monthly premium; covers short-term nursing home, some home care and some hospice costs.
- Option of Part B—has a monthly premium; covers 80 percent outpatient costs.
- Option of Medigap/Medicare Supplemental Policies—offered by private carriers; in place to cover costs Part A and B do not cover.
- Medicare C (Medicare Advantage plans)—offered by private insurance plans; are managed networked plans (like HMO, PPO); some have drug/vision/dental coverage; low or no monthly premiums; require enrollment in Part A & B—no Medigap option.
- Option of Medicare Part D—helps cover prescription drug costs; offered by private insurers; does not ensure 100 percent cost coverage, though.
What Does Open Enrollment Involve?
During the period between October 15 and December 7, current Medicare plan holders can opt to adjust their Medicare plans. Such potential moves include changing from traditional Medicare (Parts A and B) up to Medicare Advantage (Medicare C) plans--opening more benefits through private health plans; changing Medicare Advantage plans for those already at that tier of coverage; changing Part D prescription plan carriers.
Overview Of 2015 Medicare Changes
“The big picture? There will be fewer plans, higher premiums and more deductibles,” Diane C. Lade from the Sun Sentinel says.
Most changes occurring are seen for Medicare Advantage and Part D plans. There is a reported decrease in Medicare Advantage plans available, “There will be 1,945 plans in 2015, compared with 2,014 plans in the last enrollment period,” MarketWatch says.
Part D changes are more complex, with plans disappearing, inconsistent deductible changes, inconsistent copays and premium changes.
- Plan Changes--Among top Part D plans to disappear are AARP MedicareRx Enhanced, SilverScript Basic and Aetna/CVS.
- Premium Changes--“Nearly 10 million people now enrolled in six of the 10 largest Part D drug plans face premium increases ranging from 11 to 52 percent if they don’t switch to a different plan. Three other large plans, with nearly 3.5 million members, will drop their premiums by 13 to 31 percent” says AARP.
- Deductible Increase--Drug deductibles will increase in 2015 AARP reports, “The maximum Part D annual drug deductible rises by $10, to $320, in 2014. More plans will charge a deductible (from $1 to $320) and fewer will wave the deductible.” There is an expected rise of 4 percent—while that does not sound huge, that is the expected average. Kaiser Family Foundation notes that number “masks a significant amount of variation across plans…enrollees in six of the 10 most popular [stand-alone plans] will experience double-digit premium increases if they stay in the same plans in 2015, while enrollees in three of the 10 most popular [stand-alone plans] will see double-digit premium decreases”
- Doughnut Hole Disappearing--Part D doughnut hole is disappearing, AARP states. “In 2015, you get more discounts in the drug coverage gap.” They continue, “Medicare officials say that shrinking the gap, a result of the 2010 Affordable Care Act has already saved 8.3 million enrollees more than $12 billion.”
- Copay Changes--“Copays differ enormously among Part D plans, even for the same drug—and can vary by more than $100 for a month’s supply, according to an AARP Bulletin analysis. For example, among 31 plans in California, the insulin drug Lantus SoloSTAR will cost between $24 and $170 for a 30-day supply in 2015—with 14 plans charging under $45 a month and eight plans charging over $80,” AARP reports.
One thing will give temporary reprieve, though, for Medicare enrollees: Medicare Part B premium (covering doctor visits, outpatient services) will not change for 2015.
What Considerations Need To Be Made During Open Enrollment?
According to Tricia Neuman, director of the Kaiser Family Foundation’s Program on Medicare, the problem many seniors face is that they do not fully consider the changes that are implemented each year, which inevitably can affect their financial situation.
“Our research shows that people tend to pick a plan and stick with it,” Neuman says. “Now is the time for them to take stock of what providers are covered by their plan and make a decision if they want to stay.”
Quinlan Care LLC (a Medicare, health and life insurance brokerage) owner Robert Quinlan said that there are particular questions each enrollee needs to ask:
Are your doctors and hospitals still accepting patients under the original Medicare Parts A and B? If you are in a Medicare Advantage plan, similar question: are your doc’s and hospitals still in the carrier’s network of providers? With Medicare Plan D coverage, are your medications still covered by your current plan? Do you have to upgrade your current Part D plan to cover new medications?
In other words, enrollees must compare out-of-pocket costs and coverage between current plans and other available plans, looking beyond premiums and copays.
While just asking these questions may still elicit confusion, medicare.gov has established a “plan finder” that can help immensely. For example, when considering Plan D options, simply inputting a zip code can provide specific results; the more information provided (Medicare ID number, names of prescription drugs), the more accurate the plan finder results will be.
This article was a collaboration between Joe Young and Benzinga personal finance writer Rebecca Sheppard.
Plus:
Creating Curb Appeal When The Weather Turns Crummy
Be R.E.A.D.Y. - How To Draft Financial Plans
The Dark Side Of A Generation's Frugality
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Other Topics
Insurance