What Boomers Need to Know About Medicare Open Enrollment Season

The Medicare open enrollment period is upon us once again, and now is the time for Medicare recipients to review their options and make unrestricted changes to their coverage options. The period, which runs from Oct. 15 to Dec. 7, is a good time to assess current coverage and shop around for other plans that might better meet your needs and financial situation.

In order to make the most-informed decision, Medicare consumers need to be aware of the changes coming to the system.

Joe Baker, president of the Medicare Rights Center, a non-for-profit counseling organization in New York, discussed the following changes and updates for 2012 that boomers need to know:

 Boomer: What changes and updates have been made to Medicare for 2012?

Baker: The first change is when you can make a change to your current plan. It now starts earlier, on Oct. 15th and it ends earlier on Dec. 7. In the past the enrollment period started in November and extend through the holidays and the end of the year. Folks in Medicare Advantage plans will be getting an annual notice of change about what might be changing in their plan, Part D plan or prescription drug coverage, by the end of this month.

When it comes to benefits and other costs, there’s some good news this year. If you are in a Medicare Advantage plan and have Part D as a separate prescription drug plan, or part of Medicare Advantage, premiums are not going up this year for many plans. The federal government announced that on average, Medicare Advantage premiums would probably decrease by 4%, and Part D prescription drug premiums would stay about the same.

This is good news if you are not looking to change plans, prices and benefits are remaining relatively stable and there is not the large-scale volatility in the marketplace we have seen in past years. With that said, you should still research your own individual plan, any notices that detail plan changes will be more general and won't be individualized for you. If you are taking a particular drug, or getting a specific type of treatment, be sure to check there are no changes that might impact them.

Boomer: What impact has health-care reform had on Medicare if any?

Baker: The Affordable Care Act had a lot less of a negative impact than what was predicted, along with some expected good changes.

Negative first: Part of the reform significantly scaled back (starting this year) the level of subsidies or payments that Medicare Advantage plans received from the federal government. Many of the reform’s critics expected to see big premium increases, plans leaving the market and reduced benefits—all of which would be bad for consumers. The good news: those disaster scenarios did not occur. Some of the additional benefits the law enacted to Medicare will  further enhanced this year. For example, in the coverage gap (also known as the doughnut hole), you are still going to have a 50% discount for brand name drugs and the discount on generic drugs will increase to 14% from 7%, giving a little more relief on out-of-pocket costs.

In the government program, preventative care is going to be free of charge along with your annual wellness visit, mammograms and colonoscopies. That is also going to be in place for Medicare Advantage plans.

It is going to be a fairly stable year for folks in both the original Medicare and Medicare Advantage plans. Some of the improvements include in the health-care law will continue to be rolled out and enhanced over the year as well.

Boomer: What basic coverage is offered with Medicare?

Baker: Usually if you are in original Medicare you need supplemental coverage to pay coinsurance and deductible amounts. If you go to the doctor on original Medicare you pay 20% of the doctor’s approved fee, and most people get what is called Medigap or supplemental coverage to pay that 20% coinsurance or they have retiree insurance from their former employer that might cover those costs.

Most people also purchase prescription drug coverage under Part D. About 70 to 75% of people have original Medicare, retiree insurance or Medigap insurance. The other 25% of people are in the Medicare Advantage, which includes a variety of plans. Most people are in what we call HMOs or Medicare health maintenance organizations that are run by private companies like UnitedHealthcare or Humana. When you sign up with a Medicare Advantage plan, you normally don't need supplemental coverage because the plan usually combines with extra benefits to cover some of what Medigap would and your Part D coverage.

It’s important to know that under a Medicare HMO, you can only use the doctors and hospitals that are in that plan’s network. With original Medicare you can go to any doctor and you may have out-of-pocket costs like deductibles and co-insurance and that can add up if you are sick. Be careful when choosing a Medicare Advantage plan: If you travel a lot or like the freedom of choosing the doctor you want, original Medicare may be the better option. If you don't mind having a more limited network of doctors you could save some money with a Medicare Advantage plan.

Boomer: What questions should consumers ask before enrolling in a supplemental Medicare health plan?

Baker: Medicare supplements are Medigap policies and you want to make sure you are dealing with a reputable company. These supplements are standard plans that are offered across the country and are highly regulated. They usually work well with Medicare. When choosing the right plan, make sure to consider price and services offered.

With a Medicare Advantage plan you have a much more complicated decision-making process. You want to make sure your doctor and hospitals are in the network. It’s a good idea to get your doctor’s opinions on the different offerings to see if they are a good fit, particularly if you have an ongoing medical condition. A lot of people just look at the price and that is not always a good idea, especially for those in need of medical care or currently in treatment. A cheaper premium may be attractive, but you may have higher costs of copayments, deductibles and co- insurance or less coverage, and those costs could be enormous.

You can call your state’s Department of Insurance and request a list of the Medigap insurers in your state as well as consumer satisfaction information.

Boomer: For people turning 65 next year, what steps should they take to get my Medicare?

Baker: Three months before your 65th birthday, either check out the medicare.gov website, visit your local Social Security office or can call 1-800 Medicare and enroll in Medicare. If you are still working or your spouse is still working and you have insurance through that spouse, you may be able to put off your enrollment, but you need to know the rules. It’s always a good idea to know the system early.  If you are of age and not working, you will want to enroll in Medicare because it is the only show in town for you. Your coverage starts on the first of the month on your 65th birthday.

Boomer: Are there any programs available to help pay Medicare costs?

Baker: The Medicaid program helps people with very low income cover health-care costs, and consumers can find information about this program from their state’s Department of Health or the Medicare agency in their state.

Medicare savings programs also help people with higher levels of income cover their costs. These programs pay for your Medicare Part B premiums. The Part B premium is deducted from your Social Security check--and we still don’t know what the premium will be in 2012, but it will be higher than the current $115.

There is another program called Low-Income Subsidy for Part D that will cover most of that premium if you fall under a certain income level (usually between $12,000 and $20,000). The plan also has a lower cost sharing or copay when you go to pick up your medication at the pharmacy.