Medicare Part D in 2011

In “Managing Your Medicare” beneficiaries are urged to review their options every year to make sure that they have the best Medicare deal going for them.

But this is especially true as we transition into 2011.

In Part D, we know that the number of available Medicare Prescription Drug plans has been cut back drastically; there will be about a third fewer plans available in 2011 as opposed to 2010. Some see this as good as a deliberate effort was made to not allow any plans that differed only little bit from each other, thus simplifying things for beneficiaries. Others are not so sure, as the decrease is also due to some companies dropping out of Part D, and thus fewer competitive consumer choices are available to beneficiaries. But it’s done.

And you are likely to see a premium increase for 2011 over 2010. There are many different ways to calculate this, and, depending on how it is done, it’s an average of 10% or 15%. But a beneficiary should be more concerned with what particular situation they as an individual are facing. It’s entirely possible that your current plan’s premium will go down.

And finally, as already blogged here, beginning in 2011 there is a big change to how much you have to pay when you are in the “donut hole.” Basically, in 2011, for everyone of you who do NOT get “extra help,” when you hit the donut hole you will get a 50% discount on your name brand drugs, and a 7% discount on your generics. Plus, in addition to this, a number of plans, in fact, more plans in 2011 than 2010, will be offering additional benefits in the donut hole.

What all this says is that you really need to go ahead and make sure you get into the right Part D drug plan for 2011. As we point out in the book (on pages 88-89), this can be done by going on the Medicare website, www.Medicare.gov, and by clicking on “Health Plans” and then “Compare Drug and Health Plans.” You can do this beginning in mid-October, and actually enroll in a different plan beginning November 15 through December 31, effective with January 1, 2011.

And some of you will be automatically switched from your current plan to a different one offered by the same drug plan sponsor. (A “sponsor” is the actual company that offers a plan, but the same company or sponsor may offer several different plans in the same state.) This is because with the cutback in plans, yours will no longer be available, but there is a similar one offered by your sponsor. You should clearly understand that the government has NOT made the best choice for you; it’s merely put you in the closest thing that you had. You definitely need to take action to make sure you get the best deal available to you.

And there is one fly in this ointment. Based on a provision in the Health Care Reform bill, for those of you who are already paying a high income premium surcharge for your Part B benefits, you will also in 2011 be hit with a high income premium surcharge for your Part D benefits. This will increase the cost of your Part D plan by, for a married couple earning more than $170,000 and a single person earning more than $85,000, anywhere from about $150 to $1,000 more per year. I will blog the details of this shortly.

And, for those of you who are in a Medicare Advantage Plan (Part C of Medicare), or are thinking of going into one, I'll blog about what you should be doing as we transition into 2011.