EDITORIAL NOTE: Everyone not living in the U.S. can take the day off from TGB – unless you in developed countries want to find out how lucky you are to have the healthcare systems you have.
The annual Medicare Open Enrollment period begins this Sunday 15 October and lasts through Thursday 7 December – 54 days to make Medicare choices for 2018.
For elders, the enrollment end date has become the equivalent of tax day in April – a dreaded deadline that involves complex decisions that you never feel you have done well or well enough.
Nevertheless, it is important and doing the homework can save you money, sometimes thousands of dollars. So this post is longer than usual, but the basic information is here. Depending on what you need, you can skip around, pick and choose the information you want.
If your needs are more complicated than what I've explained, you may already have an insurance agent who can help or I have included a section on free places to get reliable, informed, personal help.
UPDATE AT 8:50AM PACIFIC TIME: The 2018 Social Security cost-of-living adjustment (COLA) has just been announced. It is 2.0 percent. Over the past eight years, the annual COLA has averaged just above 1 percent. In the previous decade, it averaged 3 percent.
As Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare just emailed:
“The just-announced 2.0% cost-of-living increase (COLA) for Social Security beneficiaries is woefully inadequate. The 2018 COLA translates into a paltry $27 a month for the average recipient, barely enough for a prescription co-pay, a tank of gas, or a bag of groceries. Because COLAs are cumulative from year to year (2016’s was 0% and 2017’s 0.3%), beneficiaries will continue to fall further behind."
More about this in these pages next week.
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WHAT YOU CAN DO DURING OPEN ENROLLMENT
⚫ If you are covered by traditional Medicare, you can switch to a Medicare Advantage Plan.
⚫ If you have a Medicare Advantage Plan, you can switch to traditional Medicare.
⚫ If you have a Medicare Advantage Plan, you can switch to a different Medicare Advantage Plan.
⚫ If you have (or choose a new) Advantage Plan without drug coverage, you can choose a stand-alone Part D prescription drug plan.
⚫ If you have traditional Medicare, you can change to a different Part D prescription drug plan.
These are the main choices available during Open Enrollment to the majority of Medicare beneficiaries, and what is being covered in today's post.
WHERE TO GET HELP
There is a lot of mostly clearly written information in the 2018 Medicare and You Handbook which you have already received in the mail or is available for free download in several formats here.
Open 24/7 with recorded answers to almost any question. Say “agent” at any time for a live person. You can sign up and/or change plans via telephone, all for free.
State Health Insurance Assistance Program (SHIP)
Free one-on-one consultations for Medicare beneficiaries, their families and caregivers. (I've known two certified helpers in this program and they are amazingly knowledgeable.)
Medicare Rights Center
A national nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs, and public policy initiatives. The toll-free helpline for Medicare assistance is 800-333-4114.
Local organizations such as senior centers, clubs, social groups and even churches sometimes often hold free seminars on navigating Medicare during this open enrollment period. Contact them for information or ask what Medicare help services in your area they know of.
MEDICARE PART A AND PART B
It all starts with this traditional Medicare coverage. Part A is generally free, no premium payment, and covers hospital stays. It's got its own complexities but they don't much apply to what we're discussing today.
Part B covers most medically necessary doctors' services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services. We all pay a premium for this coverage which is why I bring it up today.
Medicare has not yet announced the new Part B standard premium for 2018 but expect to pay more than the $109 per month that 70 percent of beneficiaries are paying in 2017, which is usually deducted from Social Security payments. People who fall under other regulations have been paying $134 per month.
How much more Part B will cost in 2018, for most people, depends on the increase in the cost-of-living adjustment (COLA) for Social Security which also has not yet been announced although it is widely believed it will be about just over 2 percent.
There is a “hold harmless” provision which requires that the net Social Security check cannot decrease year-to-year so if the Part B premium increase were to be larger than the COLA, the premium increase - or part of it - would not apply to those 70 percent who are hold-harmless beneficiaries.
MEDICARE ADVANTAGE PLANS
Sometimes called Part C, these are a kind of Medicare version of an HMO that are required to include all that traditional Medicare Parts A and B cover. Many offer such extras as dental, vision and hearing coverage, free gym membership and such.
There are many plans, each with different coverage options and premiums which vary widely in general and in different regions of the country.
And, the options change frequently, so it is important to closely check your coverage for 2018. There are probably other Advantage plans available to you if you see the need.
PART D PRESCRIPTION DRUG PLANS
Traditional Medicare does not provide drug coverage and neither do some Advantage plans so if you do not have Part D prescription drug coverage, it behooves you to think seriously about buying a plan.
Because I took no prescription drugs, until now, for all the 12 years I have been a Medicare beneficiary, I always chose the plan with the cheapest premium and hoped for the best if I needed it. (Yes, this is how it works in the United States: just hope.)
Now, one of the drugs I will need to take for the rest of my life costs about $750 per month retail. That is out of the question for me if I had to pay that full price. I'm lucky now that the cheap plan I chose last year covers all but about $250 after the deductible is satisfied.
But that doesn't mean I'm not going to check all the Part D plans that are available to me and you should do so too. Obviously, I know that my current plan covers my drugs but they have advised me that the premium, the deductible and the percentage co-pays for my drugs will increase in 2018.
Some insurance companies decide not to offer the plan you have now and in that case you will be forced to select a new one. But everyone should investigate whether they can save money with a different plan.
Daniel McFadden and Joachim Winter explain in U.S. News that only 10 percent of Part D enrollees switch plans each year resulting in an average overspending of $373 per person per year and $1.2 billion in excess subsidies by the government. Further, they write,
”In 2015, the average savings for an individual who switched plans was $1,104. Last year the savings was $1,006. One retiree who had a key medication dropped by insurer in 2016 saved $45,768 by switching plans.
“Another retiree, Jerome Walker, 74, and his wife Lora take 14 prescription medicines combined. One year, they saved over $4,000 by switching plans. 'We find that we need to change plans virtually every year,' said Jerome. 'Those who don't choose, lose,'”
The infamous doughnut hole has been closing but it won't be gone until 2020.
For the first time in five years, the average monthly premium for Part D coverage will decrease for 2018, from $34.70 to $33.50. That is a $1.20 reduction. Don't spend it all in one place.
HOW TO CHOOSE A PART D PRESCRIPTION DRUG PLAN
In this section, we are discussing PDPs – stand-alone prescription drug plans for traditional Medicare or Advantage plans that do not provide drug coverage. Follow these steps to select a drug plan:
⚫ Make a list of your prescription drugs including name, dosage, dosage frequency and the current costs to you.
⚫ If you already have Part D coverage, consult the Annual Notice of Change which you have received already from your insurer. Make note of any premium increase, increases in co-pays for any of the “tiers” of drugs you take, and check the formulary (drug list) to see if any of your drugs have been dropped.
⚫ Go to medicare.gov and click on “Find Health & Drug Plans” near the top of the page, white text on green background.
⚫ Enter your Zip Code and other requested information. I suggest that you use the second entry box rather than the “general search” above it so you will get a more personalized list. Click “Find Plans.”
⚫ On this page, you can enter the drugs you use. If you have done this in the past and have saved the list, you can retrieve it here and make any necessary changes. If you do not enter your drugs, you will see a drug plans list but it will not have the correct estimates matching your drugs.
⚫ On the next page, there will be three lists: for people with Original (Traditional) Medicare; for Medicare Health Plans (Advantage plans) with drug coverage; for Medicare Health Plans (Advantage plans) without drug plans. Choose one and click “Plan Results.”
The results shown are ordered by the estimated annual cost including monthly premium, deductibles, co-pays and coinsurance - and star rating. You can sort the results by any of these choices.
When you click the name of a plan, you will get to a page with links to the company's drug formulary and how to enroll, along with other information to help you decide.
One important thing: too many people use only the monthly premium to choose a plan but the other criteria such as deductibles, co-pays, coinsurance and other costs make a difference too and insurers often increase these year to year. So it's important to compare the premium with the overall estimated annual cost.
CHOOSING A PHARMACY
Sometimes it can make a different which pharmacy you use. If you already have Part D coverage, check your new Annual Notice of Change for the list of the insurance company approved pharmacies which are usually a bit less expensive. Some of them may have additional cost-saving plans, and there is usually at least one mail-order pharmacy that can save money too.
The pharmacy list is also included on the individual web pages of each plan that is available to you.
This is a tedious, boring process fraught with stumbling blocks along the way. If we had real single-payer coverage, it wouldn't be necessary, but we don't so we're stuck with this annual ritual. My only suggestions are to start early, move through the process slowly and carefully, and take advantage of the free help listed above if you need it.