A summary of what you need to know.
Note: This applies to anyone on Medicare currently
Medicare Open Enrollment has arrived. The open enrollment period begins October 15 and ends December 7, 2012. This is not only a period where you may enroll for the program, but also switch providers for your comprehensive health and drug coverage.1
Some key dates to remember. This fall and winter, there are three periods in which Medicare beneficiaries can either enroll or disenroll in forms of coverage:
* Now through December 7: Open enrollment period. This is when you can elect to leave Original Medicare (Parts A and B) for a Medicare Advantage Plan (Part C) and change your prescription drug coverage (Part D). You can also elect to get out of a Part C plan and go back to Parts A and B during this period.
* December 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, 2012 and ending November 30, 2013, 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.
* January 1-February 14: Disenrollment period. If you join a Part C plan in late 2012 and want to reverse that decision, you can disenroll from that Medicare Advantage plan in this window of time and go back to Original Medicare with a stand-alone Prescription Drug Plan (Part D).2,3
What should you look for in a Part C or Part D plan? Be sure to take a look at a few key factors.
* While premiums matter, overall plan expenses ultimately matter most; scrutinize the copays, the co-insurance and the yearly deductibles as well. Attractively low premiums might not tell you the whole story about the value of a Medicare Advantage plan.
* How inclusive is the plan network? Assuming the plan has one, does it include the hospitals you would choose and the physicians that now treat you?
* Regarding Part D, how wide-ranging is the prescription drug coverage? Look at the list of approved drugs (the formulary). If the drugs you want or need arenâ€™t listed, you are probably going to have to open your wallet to pay for them. The frustrating thing about formularies is how they change; drugs on this yearâ€™s list may not always be on next yearâ€™s list.
* 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 didnâ€™t receive such a letter in September, contact your plan.4
Premiums are rising. A report from Avalere Health, a prominent healthcare advisory company, advises that some Medicare prescription drug plans will see premiums rise by as much as 23%. The report goes on to state that the jump can be attributed not to the Affordable Care Act, but market dynamics. Regardless of the reason, this turn of events underlines the wisdom in taking the opportunity to review your Medicare plans during the open enrollment period; a better rate could give you a lot more room to move, in terms of your day-to-day finances.5
As you can see, there is nothing simple about Medicare. We hope this sheds some light on the topic. As always, call with any questions or concerns.
Edward J. Kohlhepp, CFPÂ®, ChFC, CLU, CPC, MSPA
Edward J. Kohlhepp, Jr., CFPÂ®, MBA
Please contact us whenever there are any changes to your financial situation, personal situation or investment objectives.
1 â€“ http://health.usnews.com/health-news/news/articles/2012/10/12/medicare-open-enrollment-starts-monday [10/12/12]
2 â€“ http://www.freep.com/article/20121014/FEATURES08/310140046/Medicare-changes-What-you-need-to-know-this-year [10/14/12]
3 - http://www.q1medicare.com/PartD-Important-Dates-To-RememberPartD.php [4/3/12]
4 - http://www.medicare.gov/help-and-resources/mail-about-medicare/plan-annual-notice-of-change.html [10/12/12]
5 - http://www.chicagotribune.com/business/breaking/chi-medicare-drug-premiums-set-to-jump-in-2013-20120925,0,796177.story [9/15/12]