The Medicare Prescription Drug Plan (Part D) Annual Open Enrollment begins October 15 and runs through December 7, 2018. This is the period when you are allowed to change your Medicare Prescription Drug Plan for the 2019 plan year or, if eligible, enroll in a plan for the first time.
2019 Update: Overall the news is good. Five additional plans will be offered next year for a total of thirty plans. There will be twice as many plans under $25 (6) and eight plans with rate decreases. Five plans will see rate increases with a weighted average of $5.90. Also, the Coverage Gap or “donut-hole” parameters will improve ahead of schedule. By 2020, beneficiaries were expected to only pay 25% of their brand name drug costs while in the donut hole. But that change is coming a year early. Next year, the discounts provided by drug manufacturers and plans for brand-name drugs will increase to 75% thereby closing the gap.
It is very important to review your plans renewal material and confirm that your current medications will be covered next year. Changes to your plan’s deductible, copays and premium will also be communicated to you in the renewal packet.
If you would like our assistance in evaluating all plans, we again will be offering our advisory services. For our evaluation, recommendation and enrollment assistance, we charge a $175 fee per evaluation. (Note: we do not sell market or represent any Part D drug plans).
If you would like our assistance, please print our Prescription Drug form. Once you have completed the form, mail it to the address below along with a check for $175 payable to OnlyHealthInsurance. We will then contact you with results, a recommendation, and assist with enrollment as necessary. For those of you wanting to review plans on your own, there are self-help resources available which I have listed below.
Medicare offers free resources to assist you in evaluating plans and enrollment:
- www.medicare.gov – Using their Plan Finder (www.medicare.gov/find-a-plan) you can enter your medications and preferred pharmacies, review all plan options, and enroll online. Medicare also has a new demonstration video to walk you through the process step by step. See the video link on the Medicare home page.
- Call 1-800-633-4227 – Medicare representatives are available 24/7 to provide free analysis, recommendations and enrollment over the phone.
- www.q1medicare.com – Best private website on the subject of Medicare Part D. This site has the most information available with tools to compare plans and enroll online.
If you have friends and family entering Medicare, be sure to pass along our information. We love and appreciate your referrals!
“Will a repeal of Obamacare affect my Medicare? “
I have been asked this by a number of concerned clients in response to the recent headlines from Washington.
First, to clear up any confusion, Medicare does not fall under Obamacare (ACA Law), or vice versa. These are two entirely separate government programs designed to serve two different groups of people with minimal overlap. To elaborate, Medicare provides insurance to Americans sixty-five and older or those with disabilities. It provides access to contracted providers nationwide and has its own cost mechanisms and eligibility rules. In contrast, Obamacare created marketplaces through which eligible consumers (those who are not Medicare eligible) can purchase insurance from insurance companies. Income based subsidies are possible for those who qualify and eligibility is determined by state residency and enrollment guidelines.
So, back to the question, would a repeal affect Medicare? I think more indirectly than directly. There are provisions in Obamacare that do affect Medicare, most notably Part D, the prescription drug program and specifically the Coverage Gap or “donut hole” within the drug plan design. A full repeal could negatively impact Medicare Part D beneficiaries and increase their share of cost. President Trump has not addressed this specific provision but only reiterated his personal wish to preserve Medicare and keep it functional.
Of the recent GOP reform plan that never came up to a vote, a change to the Coverage Gap provision was not one of them. The bigger question I think is, will major changes to one government healthcare program indirectly impact the economies of an entirely different government healthcare program. The answer is, maybe, or even probably, but how exactly cannot be determined at this time. Significant changes to Medicare are looming, but due to its own economic challenges. More on that in future issues.
Open Enrollment for Medicare Prescription Drug Plans (Part D) starts October 15 and runs through December 7, 2016. During this time, you can enroll in a new plan for the 2017 calendar year. This will be welcome news to many who are considering changing to a more affordable plan for the coming year.
Current Medicare Part D enrollees will likely have received, or will soon receive, a renewal packet from their existing plan carrier. This packet will describe any changes to their current plan for next year. These changes may include premium increases, adjustments in covered drugs, revised copays, coinsurance or deductibles, drug restrictions, network pharmacy changes, and more. I encourage you to read this information carefully to understand how these changes will impact your out-of-pocket costs for 2017.
To review all plans, the Medicare Plan Finder is an excellent tool that ranks plans based on your personal drug needs. The webpage includes a step-by-step video to guide you through the process of evaluating and choosing a plan.
For those who would like our assistance in sorting out options, making recommendations, and assisting with enrollment, we will again be offering our fee-based consulting service. Please read our Part D Annual Letter, complete the 2017 Prescription Drug Form and follow the instructions. For a better understanding of Medicare Part D, please visit our webpage, Medicare Part D.
The Question Column: Part D Plan Highlights
Q: This year’s Medicare Part D Prescription Drug program open enrollment runs from October 15 through December 7, 2016. Can you give us some background and highlights about the program?
A: Here are a few important highlights about the program.
Medicare Part D is voluntary. You are not required to enroll in a plan. If you do enroll, there are no restrictions on pre-existing conditions. This means you can’t be refused coverage based on your health, no matter how many medications you take or how expensive they are. You can change plans every year to meet your changing prescription drug needs.
All plans have four standard benefit levels. For 2017, Medicare has set the benefit level parameters as follows:
- The Deductible ranges from $0 – $400. The deductible can’t be higher than what Medicare allows. Plans are free to offer a lower deductible and many plans do. Some have no deductible at all.
- The Initial Coverage level is the period after the deductible is met. During this period, the plan provides benefits in the form of coinsurance or copays until you and the plan have spent $3,700 in total prescription drug costs.
- Once you and the plan have spent $3,700, you leave the initial coverage level and enter the Coverage Gap or “Donut Hole” until you reach the yearly out-of-pocket threshold of $4,950. Though very few plans provide benefits during the coverage gap, there are substantial discounts* provided for brand name and generic medications by the plan and drug manufacturers.
- The last level is Catastrophic Coverage, which starts after your out-of-pocket drug expenses reach the $4,950 threshold and runs through the remainder of the calendar year. In this stage, your drug costs are reduced to very low coinsurance or copays until the end of the calendar year.
* In 2017, Part D enrollees will receive a 60% discount on the total cost of their brand-name drugs purchased while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole; however, the additional 10% paid by your Medicare Part D plan will not count toward your out-of-pocket. Enrollees will pay a maximum of 51% co-pay on generic drugs (49% discount) purchased while in the coverage gap. Only the 51% copay paid will count toward your out-of-pocket.
A Few Warnings:
- There is no guarantee that the plan you choose will cover the medication prescribed to you during the plan year and, with few exceptions, can you change plans during a plan year for that year.
- If you choose not to enroll in Part D plan but decide to enroll later, you may be penalized by not enrolling when you could have. Though the penalty isn’t much to start, it increases the longer you are without coverage and remains for as long as you have a drug plan.
- In addition to the penalty, deciding to enroll later means waiting for the next annual open enrollment period (October 15 – December 7, 2017) to enroll for a January 1, 2018 start date. This means you could be without prescription coverage for many months and find you may suddenly need it.
These are just some of the many important features about the Medicare Part D program. You can learn more about Part D and how OnlyHealthInsurance assists our clients by clicking here.
A Closer Look: Avoiding the Medicare Part D Donut Hole
If your share of costs spike during a plan year, it may mean you have reached the Coverage Gap, or “Donut Hole”. This would be the result of reaching the Initial Coverage level threshold for total drug costs ($3,700 in 2017). Here are a few suggestions to delay, or avoid, reaching this gap during the next plan year:
- Research the medications you are taking and discuss generic or lower cost brand name alternatives with your doctor(s).
- Obtain your plans formulary drug list and bring it to doctor visits. If drugs are prescribed, you can review those covered by your plan with your doctor and consider generic alternatives. Formulary lists have drugs in alpha order and by classification for easy look-up.
- Consider a different pharmacy. The competitive model on which the Part D program was designed allows for price discounting by plan sponsors. Prices may vary significantly from one pharmacy to another.
- Choose an appropriate plan. With over twenty plans available, each with different drug formularies and pricing, it’s a good idea to evaluate plans every year to stay current. Medicare’s Plan Finder tool allows you to enter your medications, dosages, and quantities, as well as your preferred pharmacies. You can save your work using a plan ID and password date for future access.
You can evaluate your plan options by visiting Medicare’s webpage, Medicare Plan Finder. On the same webpage you’ll find a Video Overview on how to complete a plan search, compare plans, and enroll in one that best meets your needs.
You can also contact us and we’ll do the research and prepare recommendations for you. To learn more about our Part D consulting services, please contact us by phone 415-898-0212 or by e-mail at email@example.com.
I hope your summer is going well.
The primary goal of my newsletter is to explain some of the complexities of Medicare and to identify opportunities to potentially save you some money. This brings us to the process Medicare uses to determine Part B premiums. This process is complex but allows for exceptions to keep premiums lower.
The majority of seniors enrolled in Medicare are paying a standard base monthly premium for Part B ($104.90 – $121.80). However, there is a segment of Medicare population (about 5%) who are paying more for Part B and may be unaware the amount of their premium is linked to their income. And, because this premium is adjusted annually, any Medicare beneficiary could receive an unexpected premium notice.
This edition’s Closer Look segment explains how Medicare determines Part B premiums and how knowing the rules and exceptions may result in a lower premium.
A Closer Look: Medicare Part B Premiums
As mentioned in my opening letter, not everyone is paying the same amount for their Medicare Part B premium. Although the majority of Medicare beneficiaries pay the standard premium amount ($104.90 – $121.80), others pay more. The premium amount is not determined by age, health, or where you live, but by your income in a given year.
Since 2007, higher income beneficiaries have been paying higher premiums (called Income Related Monthly Adjustment Amount or IRMAA) to cover a greater percentage of Part B costs. To make premium determinations, Social Security obtains income data from the IRS. This data is typically income stated on your tax return from two years prior. Social Security uses your Modified Adjusted Gross Income (MAGI) to determine if your Part B premium will be subject to IRMAA. The IRS website, Modified Adjusted Gross Income Computation, provides a calculator for determining your MAGI.
Note: MAGI is generally your Adjusted Gross Income plus tax-exempt interest income.
If your Part B premium is subject to IRMAA, Social Security will mail a series of notices, the last being an Initial Determination Notice. The final notice is sent toward the end of each year for the next calendar year to inform the beneficiary of an income-related adjustment to their premium. The notice states a determination has been made for premium adjustment and includes the premium amount to be charged, as well as your appeal rights and instructions for filing an appeal. An inaccurate tax return, filing error or certain qualified “life events” such as a divorce, death of a spouse, loss of work or pension that reduces income, can qualify for an exemption.
If you disagree with Social Security’s determination, you can call Social Security at 1-800-772-1213 to request reconsideration. Often they’ll ask for a Life-Changing Event form plus documentation to support any decrease in income such as a more recent tax return, divorce decree, proof of new income, or letter of job loss. Taking the completed form and documentation to your local Social Security office can save you some time. The reconsideration, or appeal, can result in a reduction or possible elimination of a higher premium adjustment being levied. Other life events such as selling a home or a spike in investment income may not qualify for an exception. The Medicare Part B determination is performed annually so you can pay more or less from one year to the next. It is important to look for these notices each year! For more information:
2016 IRMAA Income Chart for Part B Premiums
Step-by-Step Guide for Appealing a Higher Part B Premium
Note: Higher income seniors can also pay an adjustment amount (using the same income parameters for Part B premiums) for Medicare Part D, the prescription drug program. This is not addressed above because unlike Medicare Part B, Medicare Part D is a voluntary program and no premium adjustment is applied if one does not enroll in a drug plan. For general rules for Medicare premiums for higher-income seniors, please read the latest guide from Social Security, Rules for Higher-Income Beneficiaries.
The Question Column: Covered Services
Q: Does Medicare cover Acupuncture and Chiropractic services?
A: Medicare does not cover acupuncture. Under Original Medicare, you will pay 100% of the cost for acupuncture treatment.
Medicare does cover medically necessary chiropractic services. Medicare Part B covers 80% of the cost for “manipulation of the spine” if medically necessary (to correct a subluxation) after the Part B deductible is met. No x-ray is required to diagnose the subluxation and there is no cap on the number of medically necessary visits to a chiropractor.
Note: a Medicare Supplement may cover the Medicare beneficiary’s share of costs. For example, Medicare Supplement Plan F will cover the Part B deductible and 20% coinsurance for Medicare approved chiropractic treatment.
Travel season is upon us and never before do I recall so many friends and family with plans to travel abroad. Traveling to distant countries doesn’t seem to be such a big deal as it was in the past.
Much of the youth of this country certainly have no qualms about it. My youngest daughter just completed a gap year program that took her to six countries in four continents.
Seniors have also embraced the opportunity to travel internationally with programs such as Grand Circle and Road Scholar making it easy to find adventures abroad. In fact, several of my senior clients have residences in other countries and live abroad much of the year while still others are planning to move abroad permanently for the experience and cost of living purposes.
But how far will your domestic health insurance reach outside the US? The US government has made it clear; you are on your own when paying for the cost of care outside the US. In our new healthcare reform law, coverage abroad is not included in the list of mandated benefits and Medicare does not cover you while traveling outside the US and its territories.
Most Medicare Supplements, plans that fill in the gaps in Medicare, provide foreign travel emergency coverage with a $50,000 lifetime benefit maximum. This usually does not include assistance services to help coordinate care or medical evacuation, and reimbursement is only made after translated receipts are submitted upon return. It took a Medicare Supplement carrier over ninety days of clumsy processing to reimburse a client with a recent foreign travel claim. These claims are not as systematic as domestic claims and require more handling, and domestic carriers aren’t as efficient with their processing.
With the increase in travel, awareness of the lack of coverage from domestic plan sources, and steady news stories of violence and virus outbreaks, the purchase of travel insurance has grown consistently from year-to-year. A report from UStiA, a not for profit travel association, reported that $2.2 billion was spent on travel-related insurance products in 2014, a jump of 17.5% from 2012!
With this demand, the market has responded with a plethora of products. This, in turn, has brought us competitive pricing, an improvement in coverage, and innovation in areas of assistance and technology. Having sold travel insurance for 25 years, I can attest to these improvements.
In my Q&A section below I highlight a product line from a carrier we recommend for travel insurance.
A Closer Look: Hospice Care Benefit
In 1986, Congress added hospice care as a permanent benefit to the Medicare program and it remains today one of the most generous Medicare benefits available. Medicare Part A covers 100% of hospice care, for the most part, but it’s important to know what benefits are included as well as those that are not covered.
In general, hospice care provides support to patients and their loved ones during the advanced stages of a terminal illness. It focuses on comfort and quality of life, rather than a cure.
You qualify for the hospice care benefit if you have Medicare Part A and meet all of the following conditions:
- Your hospice doctor and your regular doctor (if you have one) certify that you’re terminally ill with a life expectancy of 6 months or less. Note: If you live longer than 6 months, you can still get hospice care, as long as the hospice medical director or otherhospice doctor recertifies that you’re terminally ill (with a life expectancy of 6 months or less).
- You accept palliative care for comfort instead of care to cure your illness.
- You sign a statement choosing hospice care instead of other Medicare-covered treatments for your terminal illness and related conditions.
If you qualify for hospice care, you and your family will work with your hospice team to set up a plan of care that meets your needs. If your health improves or your illness goes into remission, you may no longer need hospice care and have the right to stop hospice care at any time.
Other key points to know about Medicare’s hospice coverage:
- The hospice provider you choose must be Medicare-approved. To find a hospice center in your area, use the search tool from the National Hospice & Palliative Care Organization. (Be sure to ask if they are Medicare-approved).
- You may need to pay a copayment of no more than $5 for each prescription drug and other similar products for pain relief and symptom control while you’re at home. In the rare case your drug isn’t covered by the hospice benefit, your hospice provider should contact your Medicare drug plan to see if it’s covered under Part D.
- You may need to pay 5% of the Medicare-approved amount for inpatient respite care, which is temporary care provided in a nursing home or other inpatient facility. (So that a family/friend caregiver can have time off).
- Medicare doesn’t cover room and board when you get hospice care in your home or another facility where you live, such as a nursing home.
- You must pay the deductible and coinsurance amounts for all Medicare-covered services to treat health problems that aren’t part of your terminal illness and related conditions. (A Medicare Supplement plan can cover deductibles and coinsurance).
- You also must continue to pay Medicare premiums, if necessary.
Here are other websites that provide more information and resources on the subject:
California Hospice and Palliative Care Association
Hospice by the Bay
Hospice Foundation of America
The Question Column: Travel Insurance
Q: What is travel insurance and can you recommend the best plan?
A: A travel health insurance plan provides coverage for medical benefits and emergency evacuation in the case of a sudden illness or injury while traveling abroad.
In addition to these benefits, a good travel insurance company will provide the following services:
- Easy and free access to their 24/7 phone, web, and mobile customer support.
- Prompt access to trusted doctors and hospitals.
- Facilitating medical treatment by arranging communication with US-based physicians.
- Arranging quality local hospital care if traveler is unfit to fly.
- Coordinating with hospital and medical staff for medical evacuation transportation.
- Working with out-of-country hospital and medical finance offices to arrange guarantee of payment for treatment.
- A clear and manageable claims process so claims are paid direct or reimbursement is made in a timely manner.
We recommend GeoBlue, a travel insurance company headquartered in Radnor, PA. GeoBlue is unique because they offer all of these services, and more. And, they handle all claims, billing, and evacuation services in-house (instead of through a third-party administrator).
In addition, GeoBlue offers cutting-edge destination services to help you plan a safe trip.These services include safety alerts, country profiles, and prescription translation, to name a few. They have an extensive network of pre-screened providers and hospitals around the world to ensure your safety and save you time. Their Smartphone app delivers these services as well as GPS maps to make access to their proprietary provider network simple and efficient.
GeoBlue offers many travel insurance options to fit your needs, including:
- Competitively priced single trip insurance for those traveling from 1 to180 days.
- A cost-effective, multi-trip plan covering all trips taken within a twelve-month period (less than 70 days duration per trip). We highly recommend this annual plan for those who travel internationally more than one time per year.
- Trip cancellation and interruption insurance to protect your financial investment.
- Longer-term insurance for those working, traveling or studying abroad six months or longer.
To learn more, visit our Travel Insurance Website. Here you can review plan details and benefit options, get a free quote, and enroll in any of GeoBlue’s travel insurance plan options.