Medicare Enrollment Options for 2014-15
A summary of what you need to know.
Provided by Anthony A. Davidson, Investment Advisor Representative
Key Medicare enrollment periods are approaching. This fall and winter, there are three periods in which Medicare beneficiaries can either enroll or disenroll in forms of coverage.
* Oct. 15-Dec. 7: Open enrollment period. This is when you can exit Original Medicare (Part A & B) for a Medicare Advantage Plan (Part C) and change your prescription drug coverage (Part D). You can also get out of a Part C plan and go back to Part A & B during this period, although you will certainly want a Medicare Supplement (Medigap policy) in place before you make such a move. (In most cases, that means having to pass underwriting.)1
* Dec. 8: Annual enrollment period begins for 5-star plans. As you probably know, Part C and Part D plans are assigned ratings. Beginning December 8, 2014 and ending November 30, 2015, a window opens for you to enroll in a 5-star Part C or Part D plan. You can do this once per 365 days. How do you find the 5-star plans? Visit www.medicare.gov/find-a-plan.2
* Jan. 1-Feb. 14, 2015: Disenrollment period. If you join a Part C plan in late 2014 and decide you want to leave it, you can do so within this window of time and go back to Original Medicare (Part A & B) with a stand-alone Prescription Drug Plan (Part D). Again, having a Medigap policy before making such a switch is only prudent.1
Do you have to confirm Medicare enrollment at the health insurance marketplace? No. If you have Original Medicare or a Medicare Advantage plan through an HMO or PPO, you are covered under the Affordable Care Act. If you need to make changes to your Medicare coverage, you don’t need to go to the health insurance marketplace to do so. (For the record, you can’t buy any Medicare plan through the marketplace.)3
The ACA has enhanced Medicare benefits. It gives Medicare recipients in the “donut hole” avenues to brand-name prescription drug discounts, and recipients may now take advantage of free preventive benefits, cancer screenings and an annual wellness visit.3
Should you get Medigap coverage if you have Part A & B? This third-party health insurance may save you money over time by picking up co-payments and deductibles not covered by Part A & B, but a Part C plan provides more comprehensive coverage than Medigap does. Today’s Medigap policies don’t include prescription drug coverage, and they won’t pay for long-term care, dental or vision care, or hearing aids or glasses. If you want or need Medigap coverage, you can evaluate policies using Medicare’s Personal Plan Finder at Medicare.gov.4
What should you look for in a Part C plan? Scrutinize the out-of-pocket spending limit, the copays and the co-insurance. Attractively low premiums might not tell you the whole story about the value of a Part C plan. Also, how inclusive is the plan network? Does it include hospitals you would choose and the physicians that now treat you?
Medicare’s website will determine the best Part D plan for you. Enter your medications and the website will go to work. Each Part D plan has its own formulary (list of approved drugs), categorized into higher and lower “tiers” by cost. Formularies do change; if a drug you take drops off of one, that Part D plan has to give you 60 days of notice (or alternately, written notice of the change when you get a refill with a 60-day supply of the medication).5
Every fall, Medicare plans mail out Annual Notice of Change (ANOC) letters to their plan members. Use this notice to determine if your current plan is still right for you and your medical care needs. If you don’t receive such a letter by September, contact your plan.6
How expensive will Part D coverage be next year? In April, The Centers for Medicare and Medicaid Services (CMS) issued the finalized 2015 Standard Benefit Model Plan parameters. (The definition of “Standard Benefit Model Plan” = the minimum allowable Part D coverage.) Under those parameters, the initial deductible for standard Part D prescription drug coverage will go up $10 to $320 next year. After total prescription drug costs surpass $320, you’ll pay 25% of total prescription costs between $310-2,960. You’ll be in the “donut hole” between $2,960-4,700 next year (versus $2,850-4,550 for 2014). Next year, Part D enrollees will get a 55% discount on the total cost of brand-name drugs they buy while in the donut hole. Should your total prescription drug costs exceed $4,700 in 2015, you’ll be eligible for catastrophic coverage, leaving you on the hook for just 5% of drug costs above that level.7
The 2015 monthly premiums for Part C and standard Part D plans are likely to approximate those of 2014. The Centers for Medicare & Medicaid Services projects average monthly premiums of $32.60 for a Part C plan in 2014 and $31 for a standard Part D plan.8
Anthony A. Davidson is a Representative with Securities America, Inc. and Securities America Advisors, Inc., and may be reached at www.wealthhappens.net, 859-245-5880 or Anthony@wealthhappens.net.
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1 – medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/when-can-i-join-a-health-or-drug-plan.html#collapse-3192 [7/14/14]
2 – medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/five-star-enrollment/5-star-enrollment-period.html [7/14/14]
3 – healthcare.gov/if-i-have-medicare-do-i-need-to-do-anything/ [7/14/14]
4 – webmd.com/health-insurance/insurance-basics/medigap [8/5/14]
5 – medicare.gov/part-d/coverage/part-d-coverage.html [8/5/14]
6 – medicare.gov/forms-help-and-resources/mail-about-medicare/plan-annual-notice-of-change.html [7/14/14]
7 – q1medicare.com/PartD-The-2015-Medicare-Part-D-Outlook.php [7/14/14]
8 – archapple.com/tag/part-d/ [12/8/13]