Review Medicare options before Dec. 7
Falling leaves and pumpkins are signs of autumn — along with Medicare’s open enrollment season, when those with the health program can switch plans.
As your list of seasonal chores grows, you may be tempted to stick with your current Medicare Advantage or Part D prescription-drug plan. But that plan may no longer be your best option.
Insurers are boosting premiums and other out-of-pocket costs. They’re also adding expensive drug-pricing tiers, charging extra if you don’t go to approved pharmacies, imposing new restrictions on drugs, and dropping doctors from plans.
So even if you’ve been happy with your current plan, its coverage may change significantly next year. It’s important to take a look at what your plan will offer next year and review alternatives while open enrollment is available — through Dec. 7.
Finding the best drug plan
For seniors who take many expensive medications, here’s the good news about Medicare Part D: The “doughnut hole” continues to shrink. Those who enter the coverage gap in 2015 will get a 55 percent discount on brand-name drugs and a 35 percent federal subsidy for generic drugs.
The doughnut hole works like this: For 2015, after you pay a $320 deductible, the plan provides coverage until your drug expenses reach $2,960 (including both your share and the insurer’s share of the costs).
Then the doughnut hole begins, and you pick up 45 percent of the cost of brand-name drugs and 65 percent of the cost of generic drugs. When your out-of-pocket costs reach $4,700, the government picks up most of the tab.
Part D premiums are rising by just $1 a month on average in 2015, to $32 a month. But those stable premiums could mask changes within plans that could boost your costs.
Here’s what to watch out for:
1. Beware changing formularies. Insurers have been changing their formularies — the list of drugs that are covered — and adding more pricing tiers. Such moves can increase your out-of-pocket costs.
A drug can also cost more because the Part D plan is placing it on a higher-cost pricing tier. Most plans have five pricing tiers, generally with preferred and nonpreferred generics, preferred and nonpreferred brand-name drugs, and specialty drugs.
Some insurers that previously charged the same co-payments for all brand-name drugs, for instance, have started charging more for certain brand-name medications by adding a nonpreferred tier.
2. Buy at preferred pharmacies. The number of plans with preferred pharmacies jumped from 7 percent to 72 percent over the past three years. While an insurer will pay a portion of the costs of drugs bought from pharmacies in its network, it pays a greater share at preferred pharmacies. It’s not enough to go to a network pharmacy.
3. Overcome obstacles. Even if your drug is on the formulary, you may need to clear some hurdles before an insurer will cover it. For example, some insurers use “step therapy” for some expensive drugs — requiring you to try a lower-cost medication first before they’ll cover your drug.
Or they may require “prior authorization,” asking for your doctor to fill out a detailed form explaining why you need that medication. And insurers are imposing limits on the number of dosages.
The first step in determining whether to stick with your current plan, or to switch, is to review your “annual notice of change,” which explains any changes in coverage and costs for 2015, which you should have received by Sept. 30.
Before you change coverage, ask your doctor if you can switch any of your brand-name medications to generics. The plan with the best deals for generics may be different from the one that offers the best rates for brand-name drugs.
With the online Plan Finder, you plug in your zip code and then your drugs and dosages. The tool then pulls up the plans in your area — providing details on premiums, deductibles and co-payments, and whether all of your drugs are on each plan’s formulary.
It will also show you how much you can expect to pay out of pocket under each plan during 2015. Focus on that number rather than on the premium cost. The Plan Finder also notes the plans that impose restrictions, such as preauthorization and step therapy.
It’s important to enroll in a Part D plan, even if you use few drugs now. You never know if you will need expensive coverage several months into the year. You’ll have to pay a lifetime penalty if you decide to enroll later, unless you have “creditable coverage” from an employer, retiree or other approved plan.
To find a new Part D or Advantage plan, go to the online Medicare Plan Finder (www.medicare.gov/find-a-plan) or contact your local State Health Insurance Assistance Program (find your local SHIP at www.shiptalk.org or call 800-633-4227). A SHIP adviser will run through your best options either by phone or in person.
If you have Medicare Advantage
Medicare Advantage plans are private insurance plans that provide both medical and drug coverage. Some do not charge a monthly premium beyond the monthly cost of Medicare Part B, which covers outpatient care. The standard premium for Part B next year will be the same as this year: $104.90 a month. (Medicare Part A, which pays for inpatient care, is generally free.) Premiums for Advantage plans have averaged $35 per month for the past several years.
Unlike traditional Medicare, Advantage plans provide medical care through networks of doctors and hospitals. Recently, these plans have been shrinking their networks. Some plans dropped doctors in the middle of the year, forcing many policyholders to switch physicians. If this happened to you, this is the time to reassess your options.
If you have a Medicare PPO, you’ll pay a lot more to see out-of-network doctors — perhaps 20 percent for in-network doctors vs. 40 percent for out-of-network physicians. And you may face a higher out-of-pocket maximum if you seek out-of-network care — perhaps $6,700 in-network compared with $10,000 for out-of-network.
If you’re enrolled in a Medicare HMO, you may not get reimbursed at all for care delivered by out-of-network providers, except in emergencies.
As with Part D, Advantage insurers should have sent current clients a notice by Sept. 30 explaining any changes in coverage and costs.
After typing in your zip code in the Plan Finder, look at “Medicare Health Plans.” Type in your drugs and dosages and your general health condition (excellent, good or poor in the “refine your search” section), and you’ll get an estimate of each plan’s medical and drug out-of-pocket costs for your situation.
You can also compare estimated out-of-pocket costs based on health condition (defined as good, fair and poor) at MedicareNewsWatch.com. This site lists Senior Gold Choice awards for the value of benefits and plan design for plans in 80 cities.
Check that the plan covers hospitals, doctors and other providers you use. Contact the plans for up-to-date information. If you’re now in a plan, ask your physician if he or she will be staying in 2015.
Weigh the importance of sticking with each doctor. If you have a chronic condition, keeping your current doctor may be a top priority. You may want to change doctors if you visit your primary care doctor just once or twice a year.
If you’ve been diagnosed with a major medical condition but discover that the top specialists aren’t included in any Advantage plan, consider switching to traditional Medicare and buying Medigap and Part D policies, Schwarz said.
Before you switch to traditional Medicare, find out whether you can qualify for a Medigap policy. In many states, you can be rejected or charged more for Medigap coverage based on your health if you don’t enroll when you first sign up for Medicare Part B.
Contact your state insurance department to check your Medigap options. Go to the Web site of the National Association of Insurance Commissioners (www.naic.org) for a link to your state agency.
Look carefully at the Advantage plan’s maximum out-of-pocket expenses, which is the most you have to pay for covered services during the year. Some plans provide extra coverage, such as vision and dental care.
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