By Camille Barron
Your mailbox is flooded with literature urging you to sign up for a different Medicare plan. Your insurance company has sent its annual notice, telling you about the changes in your policy for 2021. And your head is spinning, because you don’t know what you should do.
You’re not alone. Medicare can be confusing enough, but every fall the barrage of mixed messages is enough to make anyone feel overwhelmed. Here we will help you sort things out, so you’ll know what’s important and what’s not.
First, a quick refresher on the different components of Medicare and what they each cover:
What it Covers
Inpatient care, such as in an acute or rehab hospital or in a skilled nursing facility. Hospice services at home
Outpatient care, including office visits, outpatient surgery, lab work and testing
Prescription drug coverage
Known as “Medicare Advantage,” Part C packages Parts A, B and typically D into a single policy
Also known as Medigap, this supplements Parts A and B, which cover just 80% (approximately) of medical costs
During Medicare Open Enrollment, which runs from October 15th to December 7th of every year, people who have a standalone Medicare Prescription Drug plan (PDP) (Part D) or a Medicare Advantage plan (MAP) (Part C)have a chance to change plans for the upcoming year. Common reasons for doing so include:
- Significant increase in premiums or deductibles
- Doctors of choice are no longer in-network under a current Medicare Advantage Plan
- The drug formulary no longer includes certain medication(s)
- Anticipated better value or more comprehensive coverage
Here are some of the questions we’re often asked during this time.
My medications have changed this year. Should I change my Prescription Drug plan?
If there have been changes to your medications, you should review your coverage to see if your current plan is still the most cost-effective.
You can use the Medicare drug analysis tool on medicare.govto enter your prescriptions and search for the plans in your area. You will see a list of all the options available, including their monthly premiums, deductibles, and estimated drug prices.
Hint: Be sure you pay attention not only to the premium, but to the projected out-of-pocket costs for the year.
My prescriptions haven’t changed. Why should I review my plan for 2021?
Even if your medications remain the same, the coverage and costs for your drugs may be different than last year. It’s important to research this now, before it’s too late. If you don’t, you may find yourself paying a lot more for a prescription than previously. And you’ll have to wait another year to make a change.
Hint: When you conduct your analysis, include competing pharmacies along with your favorite. Pharmacies have different negotiated rates and changing pharmacies may save you money.
I’ve received a notice stating that a new plan from a different company will replace my current one. Is there anything I need to do?
Mergers and acquisitions are common in the insurance industry. If your Prescription Drug coverage is moving to a new plan with a different carrier, don’t assume your costs and coverage will remain the same. It’s important to run a drug analysis to find out what your estimated costs will be under the new plan and whether another option is a better fit for you.
Hint: The notification you receive from the new plan will not encourage you to look elsewhere. You have to do this on your own.
I have a Medicare Advantage policy. What steps should I take to be sure my coverage is still the best for me?
First, as with a standalone Part D plan, it’s worth checking the prescription drug coverage of your existing policy and comparing it to the coverage under a different Medicare Advantage plan.
Second, review the out-of-pocket costs, such as deductibles, copays, and coinsurance, for next year. Some costs may be the same, and others may have increased, or even decreased. Still other plans have added new benefits.
Lastly, review the provider directories to see if your current providers are still in the plan’s network. This is perhaps the most important thing to know if you want to continue seeing your doctors at in-network rates. If your plan is a PPO, you can go outside the plan’s network, but you will pay a higher fee. With an HMO, only in-network providers are covered; if you see a non-network doctor, you will pay the full cost of the visit.
Hint: Just because your provider was in the network last year does not mean he/she is in the network this year. A provider’s status can change, even within a given year.
Should I consider changing my Medigap policy?
Unlike Part D and Medicare Advantage insurance, Medicare Supplement (Medigap) policies are not as restrictive in terms of timing for making changes. Instead of waiting for the Annual Open Enrollment Period, you may apply for a different Medigap plan any time throughout the year. However, after you have passed your Initial Medicare Open Enrollment Period (IEP), you may not be guaranteed acceptance in the new plan.
In all but three states, during your IEP, you’re in a Guaranteed Issue status, meaning that the insurance company must accept your application with no health questions asked. Outside of the IEP, you may apply for a different plan, but will have to answer health questions on the application. Depending on your health history, you could be accepted but at a higher rate or denied coverage altogether if you do not qualify.
Hint: It is rare that we recommend changing your Medigap policy, but it is always worth spending some time evaluating any changes in benefits and cost.
What’s new in 2021?
We follow the industry closely throughout the year, but especially during Open Enrollment, when changes are most often introduced. Here are just a few that we know of so far:
- Medicare Part B premiums will increase slightly,but the exact amounts will not be finalized by Centers for Medicare and Medicaid Services (CMS) until late 2020. Currently, the standard premium for Medicare Part B is $144.60 per month.
- Part B Income Related Monthly Adjustment Amounts (IRMAAs) for higher-income earners will increase. The income thresholds that require you to pay an IRMAA may also change for a single person and for those filing joint tax returns.
- The Part B deductible that is currently $198 per month in 2020 (up from $185 in 2019, and $183 in 2017 and 2018) may increase. The federal government has not yet announced the Part B deductible for 2021, but the numbers from previous years give us a good idea of the ballpark range.
- The maximum allowable deductible for standard Medicare Part D Prescription Drug Plans (PDP) will be $445 in 2021, up from $435 in 2020. In many plans, the deductible only applies to higher-tier brand name drugs, so if you use generics you may not be subject to a deductible.
- Medicare beneficiaries with Part D coverage (stand-alone or as part of a Medicare Advantage plan) will have access to low-cost insulin as part of the Part D Senior Savings Model. Approximately one-third of Prescription Drug Plans will offer different types of insulin for a maximum copay of $35.
Changes are constant and it’s important to separate fact from fiction and avoid taking things at face value.
The only way to know how these changes will impact you is to conduct a comprehensive and detailed analysis of your individual situation, based on how and where you access care, and on the specific prescription drugs you take.
It pays to be an informed consumer, especially when it comes to healthcare!