Changes in Medicare Premiums, Deductibles, etc., in 2013

Most of the Medicare annual change amounts have been released for 2013, and the good news is that although beneficiaries will be seeing some increases in their premiums, deductibles, etc., these are, on the whole, rather modest.

The Part B deductible for 2013 will be $147, up $7 from $140. This is a small increase to those of you who don’t have a Medigap policy, or whose policy doesn’t pay your Part B deductible.

Because there was a Social Security cost-of-living increase (of 1.7%), Medicare Part B monthly premiums were again permitted to rise, and the standard premium you will pay is $104.90, up $5.

For those of you who have to pay the High Income Part B Premium Surcharge, your monthly surcharge will increase from $2 to $11 per month, depending on your income level. And also remember that your 2013 surcharge will be based on your 2011 income, and this may put you in a higher or lower surcharge bracket, or may put you into or out of having to pay a surcharge.

And the Part B coinsurance rate for outpatient mental health services will decrease from 40% in 2012 to 35% in 2013. (And next year, 2014, it will lower to 20%, the general Part B coinsurance rate, so there will no longer be any disparity.)


The Part A inpatient hospital deductible goes up by $28 in 2013 to $1,184. This is the amount you are responsible for the first 60 days of an inpatient stay. And, of course, the various co-pays for longer hospital stays, and for skilled nursing facility (SNF) stays beyond 20 days, are also affected by this change, but these are modest.

Those relatively few of beneficiaries who pay for Part A will welcome the news that their premiums will actually decrease. The Part A premium for those currently paying $451 a month will decrease $10 a month to $441, and for those paying $248, it will go down $5 to $243 a month.


The Centers for Medicare & Medicaid Services reports that in Part C – Medicare Advantage or Medicare managed care – the premiums have gone down by 7%, on average, for 2013. But always remember that you need to do your homework every year to see if you are in the best plan for you. And also remember that you mostly have only until December 7 to do this, that is, the Annual Election Period or Open Enrollment lasts only until that date. Several exceptions exist to this deadline. One is that if your plan is leaving the Medicare program, you have until February 28. Another is that, if there is a plan with a five-star quality rating where you live (and there may not be one where you are), you can switch to it after Open Enrollment and in any month in 2013 (except December). And this is new in 2013; to facilitate beneficiary enrollment into higher quality plans, a special enrollment period (SEP) will be given to beneficiaries who are enrolled in “low performing” Medicare Advantage and Part D drug plans. By “low performing” is meant any plan which has had an overall star rating of less than three stars for three years in a row. The Centers for Medicare & Medicaid Services (CMS) will send notices to individuals enrolled in these plans informing them of their plan’s low rating and offering them an opportunity to request a special enrollment period to move into a higher quality plan for 2013. They can do this any time after the Open Enrollment and in any month in 2013 (except December). And, finally, if you have been affected by Hurricane Sandy, you can call 1-800-MEDICARE to ask for an extension of the December 7 deadline.


For Part D, again changes are minimal from 2012, but the overall recommended structure has changed some. The deductible is up $5 to $325, but remember that many plans have none or a smaller deductible than this. The next payment band, the 25% Coinsurance Band, covers the next $2,645 of your drugs, and you pay 25% of this, or $661.25, while your plan covers $1,983.75. Your plan may structure this differently. In the “donut hole,” in 2013 you will have to pay only 47.5% of the cost of your brand name drugs, slightly less than the 50% you did in 2012, as manufactures will give a 52.5% discount. And now the government will pay 21% of the cost of your generics, up from 14% in 2012. And, finally, in the Catastrophic (or 5% Insurance) Band, which starts when your drug “expenses” reach $4,750, you will pay a minimum of $2.65 for a generic or $6.60 for a brand name drug, but no more that 5% of its cost, if that is greater than these amounts. (And by “expenses” is meant your deductible, anything you spent in the 25% band and in the donut hole, AND the 52.5% that manufacturers discount on your brand name drugs in the donut hole (but not the 21% the government pays on your generics).

The structure for “Extra Help” or “Low Income Subsidy” beneficiaries is, of course, different, but the increases these beneficiaries will experience are nil to minimal.

And on the whole Part D premiums have increased by only a hair for 2012. But the admonition above with regard to Medicare Advantage plans applies here also – do your homework to make sure you are in the best Part D prescription drug plan for 2013. And the special enrollment periods discussed above (Non-Renewing plans, the 5-Star Quality Rating, Low-Performing plans and Hurricane Sandy) all apply to Part D Plans also.

nd there is good news for those of you who have to pay the High Income Part D Premium Surcharge. Your monthly surcharge will either not increase, or will increase by only 20¢ a month. But remember, as with the High Income Part B Premium Surcharge, your surcharge will be based on your 2011 income, and this may put you into a higher or lower bracket or may put you into or out of having to pay a surcharge.

Medicare Premiums, Deductibles, etc., in 2013

OPPORTUNITIES TO CHANGE YOUR MEDICARE ARRANGEMENTS

Here are the several opportunities which are open or will open for Medicare beneficiaries to enter, leave, and change Medicare Advantage plans (Medicare managed care, also known as Part C) and Medicare Part D prescription drug plans. And, even if a beneficiary doesn’t have Part B, to get it (and even Part A). Some of these opportunities are quite time limited, and you need to use them to make sure you are in the very best Medicare arrangement for you.

The 2013 Annual Election Period (Open Enrollment)

Medicare beneficiaries have received their Medicare & You 2013 booklets, and this signals the beginning of the Open Enrollment period where beneficiaries can make changes which will go into effect on January 1, 2013. (This is sometimes also called the Annual Coordinated Enrollment Period.)

Of extreme importance is that the open enrollment period will begin on Monday, October 15 and run only until Friday, December 7 of 2012 – this is the different and earlier time frame that started last year, so remember, you generally have only until December 7 to make a change to how you get your Medicare and / or which Medicare Advantage and / or Part D Drug plan you use. Remember that you can, beginning October 15:

If you are in Original Medicare, you can join a Medicare Advantage plan. If that plan does not have a Part D benefit, you can join a Part D stand-alone prescription drug plan, or, if you are already are in Medicare Advantage plan, you can stick with it (if it is staying in Medicare) or switch to a different one.

If you are in Original Medicare, and you want to stay in it, you can join a Part D stand-alone prescription drug plan, or, if you are already are in one, you can stick with it (if it is staying in Medicare) or switch to a different one.

If you are in a Medicare Advantage plan, you can go into Original (fee-for-service) Medicare, or a switch to a different Medicare Advantage plan or stay in the plan you have (if your plan is continuing into 2013). If the Medicare Advantage plan you join or stick with has a Part D prescription drug benefit, you will use it for your Part D. If it does not, or if you go into Original Medicare, you can join a stand-alone Part D plan.

So there are lots of options. And you should take the time to seriously consider each of them. The Centers for Medicare & Medicaid Services (CMS) tell us that both Medicare Advantage and drug plan premiums will be, on the whole, holding about steady in 2013 from 2012. But this does not mean that the Medicare Advantage plan or drug plan you are with won’t change its premium. And it may be that there is another Medicare Advantage plan or drug plan available for 2013 that’s a better deal, benefits, premiums, and quality all considered, than what you have now. And for those not in a Medicare Advantage plan or drug plan, this is the time for you to see if joining one or the other is best for you. And although many of the news articles and advertising for plans are directed at seniors, disabled beneficiaries should strongly consider a Medicare Advantage plan, especially considering the generally large Medigap premiums you otherwise might face.

And a couple of quick notes about Medicare Advantage plans. For one, almost all types of these will have out-of-pocket limits. That is, after you reach a certain amount of medical expenses (Part A and B) that you have had to pay yourself, you won’t have to pay anything. (This does NOT apply to Part D.) This catastrophic protection feature became mandatory last year and continues in 2013; this requirement is a safety valve available to you that is not present in Original Medicare. Also, Medicare Advantage plans will not be able to charge you deductibles or co-payments for any preventive services that are free in Original Medicare, that is, they will be free to you also.

And two minor improvements have been made to Part D in 2013. If you hit the donut hole, your plan will now pay 52½ percent of your coinsurance on brand-name drugs (up from 50 percent in 2012), and it will now pay 21 percent of the cost of your generics (up from 14 percent in 2012). So if you are not in Part D, these are reasons to think about joining it now.

So take action to review what’s available to you for 2013. Go onto www.Medicare.gov and go to the “Plan Finder;” (look for “Find health and drug plans.”) If you’re not good with computers, have a child, grandchild or friend help you. Or call 1-800-MEDICARE, or call your State Health Insurance Counseling Program (SHIP); their toll-free number will be on the back of your Medicare & You 2013 booklet.

Special Enrollment Period (SEP) for Beneficiaries in Non-Renewing Plans

If your Medicare Advantage plan (Part C) or Part D prescription drug plan decided to terminate its relationship with Medicare, that is, it did not renew its contract with Medicare for 2013, remember that you have a “special enrollment period” (SEP) to enroll in a new Medicare Advantage plan or prescription drug plan. Specifically, beginning on Saturday, December 8 (the day after the end of the Annual Enrollment Period), and continuing to Thursday, February 28, you can choose a Medicare Advantage plan or a Part D prescription drug plan. If you enroll in one on or before December 31, 2012, your enrollment will be effective January 1. If you enroll any day in January 2013, your enrollment will be effective February 1. If you enroll any day in February 2013, it will be effective March 1.

But the best strategy is to either enroll during the regular Open Enrollment period, or using this special enrollment period during December. This way, you will be continuously covered, and you can start burning through any annual deductible(s) you may be subject to beginning January 1. So get going and make your choice. If you are enrolling in a new Medicare Advantage plan, be sure to talk to your physician(s) and other heath care providers to see if they will “take” your plan before you enroll.

And there is a restriction on this. If you are in a stand-alone Part D drug plan, you can only join another such plan or a Medicare Advantage plan with drug coverage.

And if you are in a Medicare Advantage plan, and decide that you want to go back to Original Medicare, you can join a stand-alone Part D drug plan. And if you don’t enroll in a Medicare Advantage plan, you will automatically be put back into Original Medicare on January 1, 2013. And if you are 65 or older, you will have a right to purchase a Medigap policy (Medicare Supplement policy). Specifically, you will have the right to buy a policy A, B, C, F, F-High, K or L. But your opportunity to exercise this right to a “guaranteed issue” to such a policy only exists from November 4 until March 4. (Your state may have more expansive rules about your Medigap opportunities.)

The 2013 Special Enrollment Period (SEP) for 5-Star Plans

As soon as the Annual Coordinated Enrollment Period ends, a special enrollment period (SEP) will open on December 8 and will be continuously open from then and throughout 2013. This will allow a Medicare beneficiary to sign up for a 5-Star Medicare Advantage and / or a 5-Star Part D drug plan.

Medicare assigns quality ratings to all Medicare Advantage plans and Part D drug plans. These ratings, which are shown in the Plan Finder on www.Medicare.gov, are based on a number of factors, but the highest ranked plans, those with five stars, are considered the best. In order to reward these outfits for striving to serve beneficiaries most effectively, a beneficiary can enroll in a 5-Star Medicare Advantage and / or a 5-Star Part D drug plan whether they are in Original Medicare or are already in a Medicare Advantage and / or a Part D drug plan. A beneficiary can enroll beginning on December 8 and any day thereafter, and their enrollment will be effective with the first day of the month following their enrollment. A beneficiary can do this only once for an enrollment effective in 2013.

Note that achieving this rating is not easy, so it well may be that you won’t have a 5-Star option available to you. And, s always, if you are enrolling in a new Medicare Advantage plan, be sure to talk to your physician(s) and other heath care providers to see if they will “take” your plan before you enroll.

The 2013 Annual Medicare Advantage Disenrollment Period (MADP)

In 2013 the Annual Medicare Advantage Disenrollment Period will run only from Tuesday, January 1 to Thursday, February 14. The changes you can make during this short, 45 day period are these:

You may leave your Medicare Advantage (Part C) plan with Part D prescription drug coverage (an MA-PD plan) and go to Original (fee-for-service) Medicare and, if you wish, join a stand-alone Part D prescription drug plan (PDP). The change to Original Medicare will be effective the first day of month following the date you disenroll from your Medicare Advantage plan. (It will be either February 1 or March 1, 2013.) If you enroll in a Part D drug plan, your enrollment will be effective on first day of month following the date the plan gets your enrollment request. (Again, it will be either February 1 or March 1, 2013.)

And you do this either by:

Disenrolling from your Medicare Advantage plan. This will put you in Original Medicare without any Part D drug coverage.

Or by enrolling in a stand-alone Part D drug plan. This will automatically
disenroll you from your Medicare Advantage plan and put you into Original Medicare and enroll you in the Part D drug plan.

And you may disenroll from your Medicare Advantage plan and later enroll in a stand-alone Part D drug plan, as long as you enroll by February 14, 2013.

And, if you are in a Medicare Private Fee-for-Service (PFFS) Medicare Advantage plan that does not have Part D prescription drug coverage, and in a stand-alone Part D prescription drug plan (a PDP), you may change to Original Medicare, but you must keep your current Part D prescription drug plan. Your change to Original Medicare will be effective first day of month following the date you disenroll from your Medicare Advantage plan. (It will be either February 1 or March 1, 2013.)

You may NOT join a Medicare Advantage plan nor switch from one Medicare Advantage plan to another. And, of course, there is always an exception in Medicare: if you are in a Medicare Advantage Medical Savings Account plan (MSA), you can’t drop it at this time.

So, in effect, during this Annual Disenrollment Period, a beneficiary in Medicare Advantage (Part C) who does not like their plan and is willing to go back to Original Medicare (“fee-for-service” Medicare, also known as “plain vanilla” Medicare) may do so. And if a beneficiary has prescription drug coverage with their plan, they can just drop it or they can join a stand-alone Part D drug plan. But remember that all of these Part D plans charge a premium (and not every Medicare Advantage plan does, even if it has drug coverage), you need to think of that. And, of course, if you need or want a Medigap insurance policy (Medicare supplement) to go with your Original Medicare, you better be sure you can get one (and price it to see if you can afford it) before you jump back into Original Medicare.

Special Enrollment Period for Beneficiaries in Low Performing Plans

This is new in 2013. To facilitate beneficiary enrollment into higher quality plans, a special enrollment period (SEP) will be given to beneficiaries who are enrolled in “low performing” Medicare Advantage and Part D drug plans. By “low performing” is meant any plan which has had an overall star rating of less than three stars for three years in a row. (You can tell if a plan is a low performer as it will have a low performer icon in the Medicare Plan Finder.  It looks like a red triangle with an exclamation point in it.) Specifically, the Centers for Medicare & Medicaid Services (CMS) will send notices to individuals enrolled in these plans informing them of their plan’s low rating and offering them an opportunity to request a special enrollment period (SEP) to move into a higher quality plan for 2013. Beneficiaries can take advantage of this opportunity any time after the Annual Election Period (Open Enrollment), that is, beginning with December 8, 2012 and going through November 30, 2013.

These requests must be made directly to 1-800-MEDICARE and not to either your current plan or the plan you wish to join. The beneficiary will have to enroll in a plan which currently has a rating of three or more stars. The change will be effective the first of the month following the month in which the enrollment request is made. And again, if you are enrolling in a new Medicare Advantage plan, be sure to talk to your physician(s) and other heath care providers to see if they will “take” your plan before you enroll.

Part B General Enrollment Period with an Initial Enrollment Period

And we must not forget, for those of you who are not enrolled in Medicare Part B, that every year you have the opportunity to sign up for it between January 1 and March 31 of that year. So you can do this beginning Tuesday, January 1 and ending with Sunday, March 31, 2013. You can call Social Security to do this, but remember that their toll-free line (1-800-772-1213) is not fully available on weekends. If you enroll, you will get Part B on July 1, 2013. (For those extremely few of you who don’t have Part A, and wish to buy premium Part A, you can do so in these same timeframes. If you don’t have Part B, you will have to sign up for it, too.)

And what’s very important here is that, if you will now have both Parts A and B effective with July 1, you now may join a Medicare Advantage plan and / or a Medicare Prescription Drug plan. And if you will now have just Part B effective with July 1, you can join a Medicare Prescription Drug plan. But you have only between Monday, April 1 and Sunday, June 30, 2013 to do so. Note that these dates follow and do not coincide with the dates you have to enroll in Part B, and you have to enroll before you actually get your Part B on July 1.

And if your sign up for Part B, go ahead and start making your appointments no earlier than July 1 for the many preventative services you will now be able to get for free; as well as for the counseling and educational services which apply to you (some of which are not free). Don’t wait until July 1 to start making these. This is both because it may take some time for you to get an appointment, and because, now that you have Part B, you need to use it to take the very best care of your health you possibly can.

Notices to Low Income Subsidy (LIS) “Extra Help” Beneficiaries

Beginning this month (October 2012) the Centers for Medicare & Medicaid Services (CMS) will send out a variety notices to those Medicare beneficiaries that have the Low Income Subsidy (Extra Help) about changes that affect them.

One such notice is the “Change in Extra Help Co-payment” notification letter. This letter, mailed early in the month, is on orange paper, and informs beneficiaries who have the Low Income Subsidy, and who will continue to have it in 2013, that their co-payment level will change beginning January 1, 2013, and what the new level (up or down) will be. (This is CMS Product No. 11199.)


The following affect those Low Income Subsidy beneficiaries who are in stand-alone drug plans (PDPs).

In late October CMS will send letters on blue paper to those beneficiaries that it has reassigned to a new drug plan in 2013. Two different events cause these reassignments.

First. If a Low Income Subsidy beneficiary’s current drug plan is leaving the Medicare program in 2013, CMS’s “Reassignment Notice – Plan Termination” notification, which is printed on blue paper, will tell them this, and will also tell them which plan they have been reassigned to. While they have already been informed by their plan that it will terminate, this is the first notice they receive telling them what their new plan will be. They are also told that they can join a different plan if they wish. These beneficiaries should indeed use the Plan Finder to make sure that the plan they have been reassigned to is the best one for their individual circumstances, which mostly depend on which prescriptions they routinely take. (This is CMS Product No. 11208.)

Second. If a full subsidy Low Income Subsidy beneficiary’s current drug plan is raising its monthly premium to an amount over the benchmark premium amount, and they were automatically enrolled in their current plan by CMS, they will receive a “Reassignment Notice – Premium Increase” notification letter. It is also printed on blue paper, and will tell them that, on January 1, 2013, they will automatically be reassigned to a plan whose premium is at or below the benchmark, and which plan this is. They are also given the option of calling their current plan if they wish to stick with it and pay the premium difference. Finally, they are reminded that as a Low Income Subsidy beneficiary they may change their plan at any time. This notice also includes a list of all plans in their state with premiums at or below the benchmark. These beneficiaries should also use the Plan Finder to make sure that the plan they have been reassigned to is the best one for their individual circumstances, which, again, mostly depend on which prescriptions they routinely take. (This is CMS Product No. 11209.)

Finally, in early November, CMS will send out a notification to those Low Income Subsidy beneficiaries who chose a drug plan on their own, and whose plan is raising the premium over the 2013 benchmark amount, that they will now have to pay a portion of their monthly Part D premium. This “LIS Choosers Notice” is printed on tan paper. These beneficiaries should also use the Plan Finder to determine if the plan they are in continues to be the best one for their individual circumstances, which, again, mostly depend on which prescriptions they routinely take, but in this case will also depend on their new premium liability. (This is CMS Product No. 11267.)

And something new this year: In December those Low Income Subsidy beneficiaries who were reassigned (either because their drug plan left the program or their plan’s premium went over the benchmark) will be sent a letter called the “Reassign Formulary Notice” printed on blue paper. It will tell them which the drugs they have been taking are on their new plan’s formulary, that is, the plan they were reassigned to. This will give them a good idea of how well the new plan’s formulary covers the drugs they take.

Two items of interest. One is that the drug information is from the period January 1 to August 31, 2012, so if the beneficiary has added or dropped prescriptions since then, this information will be a bit out-of-date. (Up to 30 drugs will be displayed.) The other is the letter will also tell the beneficiary whether or not their new plan has any rules which apply to the specific drugs they take, for example, prior authorization. The beneficiary is also told that they can change plans and even do this after the annual enrollment period has ended as Low Income Subsidy beneficiaries can do so at any time. In light of this information, if the beneficiary has any concerns, they should use the Plan Finder to see if another plan would work better than the one they have been reassigned to. (The letter will have a list of all the plans with premiums below the benchmark available to the beneficiary. These letters are CMS Product No. 11475 (for reassignments) and 11496 (for terminations).)


And the following applies to those Low Income Subsidy beneficiaries whose will continue to be eligible for the subsidy in 2013 and who are in a Medicare Advantage Plan which is non-renewing or undergoing a service area reduction, and who are being reassigned to a stand-alone drug plan (PDP). (See my posting of October 26 for more details on these reassignments.) They will, in late October or early November, be sent an “MA Reassignment Notice.” This notification, printed on blue paper, will tell them about the reassignment and identify their new drug plan. It will also tell them they have the option of joining a Medicare Advantage Plan (with or without drug coverage) or of changing to a different stand-alone drug plan. This notice also includes a list of all stand-alone drug plans in their state with premiums at or below the benchmark. Beneficiaries who receive this need to carefully think about joining a Medicare Advantage Plan if they have had success with this approach, especially because with their low incomes they may not be able to afford a Medicare Supplement policy (Medigap). And they can use the Plan Finder to find a Medicare Advantage Plan, using the specific prescriptions they currently take. And if they opt for Original Medicare (that is, they do not enroll in a Medicare Advantage Plan), they can use the Plan Finder to locate the best stand-alone drug plan for them. (This notice is CMS product No. 11443.)

These beneficiaries will also be sent a letter (the "Reassign Formulary Notice," on blue paper, in December) telling them which the drugs they have been are taking are on their new plan’s formulary, that is, the plan they were reassigned to. See the paragraph beginning “Two items of interest:,” above, for other details on this letter.

Prior Authorization of Power Mobility Devices (PMDs) Demonstration

Beneficiaries in Original Medicare (also known as fee-for-service Medicare) and living in the states of California, Florida, Illinois, Michigan, New York, North Carolina and Texas have been, beginning with September 1, 2012, included in a “demonstration project” which is designed to curb the fraudulent supplying of power mobility devices. A demonstration project is a temporary effort in which Medicare can try new and different but limited approaches to the Medicare program, such as delivering care in new ways, testing different reimbursement methodologies, seeing if a new type of Medicare Advantage Plan will work, and so forth.

The devices involved in this demonstration include almost all power wheelchairs and power operated vehicles such as scooters. Medicare believes that in some areas of the country these types of items are at times improperly or fraudulently supplied. So if you are an Original Medicare beneficiary and live in one of these seven states, and are thinking of acquiring one of these devices, read on. (And by “live in,” we mean that your residence address on the Social Security Administration (SSA) records is in one of these states. Medicare does not keep up on your residence address, but uses SSA’s records. You can check on your SSA address or change it by calling 1-800-772-1213. Railroad (RRB) beneficiaries should call 1-877-772-5772).

Under this demonstration, physicians or practitioners who prescribe these devices or the suppliers of these devices may submit a prior authorization request to the appropriate Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) requesting prior authorization of the equipment. (These “DMEMACs“ are the companies Medicare contracts with to process Medicare DME claims.) Prior authorization, sometimes known as “prior approval” or “pre-certification,” exists in many other public and private health care programs, and is not uncommon in some Medicare Advantage Plans, but is almost unheard of in Original Medicare. And whether or not they submit the prior authorization, your physician or practitioner will have to have a face-to-face examination of you, and they can even get some reimbursement from Medicare for submitting the prior authorization request paperwork.

If such a prior authorization request is submitted, the contractor will try to make a decision on the request within 10 business days. And if you have an unusual but extremely urgent need for the equipment, your physician or practitioner can ask for a 48-hour decision.

If the prior request is approved, and the supplier delivers the equipment to the beneficiary, the contractor will approve and pay the claim at the normal reimbursement amount. If the request is not approved, it can be resubmitted with additional information, but cannot be formally appealed.

If the request is not approved, the supplier can deliver the equipment to the beneficiary and submit a claim. These claims will all be formally denied, and all the normal appeal rights will kick in.

If, on the other hand, the supplier submits a claim for such a device without first seeking prior authorization, the contractor will suspend the claim and send a request to the supplier asking for information to show whether or not it should be covered. If this information is not submitted, or if it shows the device is not medically necessary, the claim will be formally denied. In this case the beneficiary’s normal appeal rights will kick in. If the information is submitted and it shows the device is necessary, the claim will be approved BUT PAID AT 25 PERCENT LESS than the normal approved amount if it is submitted by a “non-competitive bid supplier.”

(This 25% reduction provision does not go into effect until December 1, 2012. And not to get overly detailed, but Medicare is also running a different demonstration project in a number of metropolitan areas, including some in Florida, North Carolina and Texas, which generally require beneficiaries to use those suppliers who have won the competitive right to supply Medicare beneficiaries with certain items of durable medical equipment and supplies. Certain power mobility devices are included, so there is some overlap. If you reside in one of the three states just mentioned, you can call 1-800-MEDICARE to find out if you are in one of the metropolitan areas where the competitive bid supplier demonstration is running.)

Beneficiaries should be aware that if either the prior authorization is not given, or the physician, practitioner or supplier does not seek this, and the supplier asks the beneficiary to sign an Advance Beneficiary Notice (ABN) indicating that the item is not covered, the beneficiary will be liable for the cost of the item. And while the beneficiary may ask for delivery of the item and then appeal the denial, beneficiaries should be aware that unless they win the appeal, they will be fully liable for the cost of the item.

As demonstrations are limited, this prior authorization demonstration will expire on September 1, 2015.

Reassignment of Low Income Subsidy (LIS) (Extra Help) Beneficiaries for 2013

Beginning in October the Centers for Medicare & Medicaid Services will begin their annual reassignment of Low Income Subsidy (LIS) (Extra Help) beneficiaries.

CMS will reassign those Low Income Subsidy beneficiaries who are in a stand-alone Part D drug plan (PDP) and (1) whose plan will be leaving the Medicare program in 2013, or (2) whose plan will begin charging a monthly premium which is higher than the benchmark premium for the beneficiary’s state. (A “benchmark premium” is the highest amount that Medicare will allow for a Part D premium for a Low Income Subsidy beneficiary. These are more fully explained in my previous posting, which also lists the benchmark premiums for each state for 2013.)

CMS will also begin reassigning Low Income Subsidy beneficiaries who are in a Medicare Advantage – Prescription Drug Plan (MA-PD) or a Medicare Advantage only Plan (MA-only) and whose Plan is either leaving the Medicare program altogether, or is reducing its service area so the beneficiary can no longer be enrolled. Very importantly, these beneficiaries will be NOT be reassigned to another Medicare Advantage Plan, but will be reassigned to a stand-alone Part D drug plan (PDP) and put into Original (fee-for-service) Medicare. Because many of these beneficiaries have no other health insurance, they may need to keep the protections of being in a Medicare Advantage Plan and to take action to enroll in one effective with January 2013.

And, of course, Medicare will not reassign any beneficiary who will be loosing their Low Income Subsidy in 2013. These beneficiaries must remember that they will no longer be able to switch their drug plans each month, which Low Income Subsidy beneficiaries are permitted to do, and need to make sure, during the annual open enrollment, that the plan they are in is the best one for them.

Some additional details about these reassignments will be helpful.

With regard to the reassignment of Low Income Subsidy beneficiaries who are in a stand-alone Part D drug plan (PDP), please note that in some instances Part D plans are allowed to voluntarily waive a difference between the benchmark premium and their premium, where this difference is small. ($2.00 or less; the so-called “de minimis” rule.) In these cases, CMS will not reassign the beneficiary. Therefore, you may see instances where a Low Income Subsidy beneficiary’s stand-alone Part D drug plan’s premium is slightly higher than the benchmark, but the beneficiary is NOT reassigned.

In addition, CMS will not reassign a beneficiary if the beneficiary chose to be in their stand-alone plan, even though its premium will be above benchmark in 2013. The thinking here is that the beneficiary took specific action to join the plan, and this decision should be respected. This, of course, applies only where their plan is continuing into 2013; if the plan is terminating, CMS will reassign the beneficiary.


And with regard to the reassignment of Low Income Subsidy beneficiaries who are in a Medicare Advantage Plan which is not renewing its Medicare contract or undergoing a service area reduction, CMS will reassign these beneficiaries into a stand-alone drug plan (PDP). There are two exceptions to this: (1) If the beneficiary is in a Private Fee for Service (PFFS) Medicare Advantage Plan that does not have drug coverage (MA-only), and is also in a stand-alone drug plan (PDP), the beneficiary will not be reassigned. (2) If the beneficiary is in an employer sponsored MA-only or MA-PD plan, the beneficiary will not be reassigned.

And just to be clear, these Medicare Advantage Plan reassignments are made only if the Plan not renewing its Medicare contract or undergoing a service area reduction, and NOT because the Plan’s premium for its drug benefit will exceed the Low Income Subsidy benchmark in 2013.

And, as indicated above, these Medicare Advantage Plan beneficiaries who are reassigned will be put into a stand-alone drug plan (PDP) and Original (fee-for-service) Medicare. If they wish, they may enroll in a Medicare Advantage Plan with drug coverage (MA-PD). (If they do this, of course, their reassignment to a stand-alone plan is voided.) Or they may they enroll in a Medicare Advantage only Plan (MA-only) without drug coverage; if they do so, they will remain in the stand-alone drug plan (PDP) they were reassigned to, unless they choose a different stand-alone plan.


Notices:  Both Plans and CMS have a role in notifying Low Income Subsidy beneficiaries affected by the reassignment process. But for right now, the end of September and the beginning of October, notices will go out from Plans that are not renewing their contracts with CMS or which (in the case of Medicare Advantage Plans) are reducing their service area. In addition, for those that are staying, they will be sending out the Annual Notice of Coverage, and, as appropriate, warning Low Income Subsidy beneficiaries that their premium will exceed the benchmark in 2013. And late in October CMS will begin sending out more specific notices to affected beneficiaries, but I will blog about that in a week or two.

The 2013 Part D Benefit Structure Small but Helpful Changes from 2012

After I posted the last blog about getting ready for Part D I realized I hadn’t blogged about the changes to the Part D benefit structure for 2013. Although it’s very close to this year’s structure, the good news is that, if you go into the donut hole, Part D will pay a tiny chunk more for your brand name drugs than in 2012, and, likewise, an even larger chunk more for your generics. On the other hand, there are slight increases in the annual deductible, the initial coverage limit, etc. My guess is, given that premiums will be about what they were in 2012, and the structure is a whisker more favorable for beneficiaries in 2013, that most will be paying about what they were in 2012, or a just a bit less.

And you should also know that there will be some expansion of the Part D drug formularies in 2013. This is because statutory changes now provide that Part D plans will now have to cover benzodiazepines, as well as barbiturates for people with epilepsy, certain types of cancer and chronic mental health conditions. And, in addition, as can happen when formularies are changed, new generics, some of which are alternatives to brand named medicines, have been put in a number of plans’ formularies.

In 2013 the four bands of the recommended benefit structure are as follows: (Remember, of course, that your plan’s structure, or that of any plan that you are considering, may look very close to this or not at all like it, because plans are allowed to vary from this as long as their structure is “actuarially equivalent” to it.)

Annual Deductible Band: From $0 to $325

The recommended deductible is $325, up $5 from 2012. The beneficiary is responsible to pay all of this out-of-pocket. Of course, many if not most plans will have a smaller or no deductible.

25% Coinsurance Band: From $325 to $2,970

After the deductible is satisfied, the next $2,645 of drug costs falls into this band. (In 2012, this figure was $2,610.) The plan will pay 75% of the cost of a drug, and the beneficiary, 25%. The beneficiary will remain in this band until the plan has paid a total of a $1,983.75 and the beneficiary, $661.25.

At this point, the beneficiary has spent $986.25 ($325.00 plus $661.25) and the plan, $1,983.75, for a total of $2,970. (You may see this figure referred to as the “initial coverage limit;” it was $2,930 in 2012.) The beneficiary now goes into the “donut hole.”

Donut Hole Band: From $2,970 to “Drug Expenses” of $4,750

Once in the donut hole, also known as the “coverage gap:”

For brand name drugs, the plan will pay 52.5% of the cost of a drug, and the beneficiary, 47.5%. (These figures were 50% - 50% in 2012, so in 2013 the beneficiary gets a slightly better deal here.)

For generic drugs, the government will pay 21% and the beneficiary, 79%. (In 2012 the government paid 14% and the beneficiary, 86%, so again, the beneficiary gets a better deal.)

The beneficiary will remain in the donut hole until their “drug expenses” total $4,750 (this was $4,700 in 2012). By “drug expenses” we mean anything spent to meet the deductible, anything spent in the 25% band, and whatever the beneficiary spends in the donut hole plus the 50% their plan pays for their brand name drugs in the donut hole (but not the extra 2.5% being added this year, nor anything spent by the government on their generics.)

[It never fails to amaze me how complicated Medicare can become, so a bit of explanation may be required, but disregard this if you already have had enough detail! Of the 52.5% Part D will pay on a Medicare beneficiary’s brand name drugs in the donut hole, 50% is really paid by the drug manufacturer and the additional 2.5% for 2013 is paid by your Part D plan, and you get “credit” only for the 50%, not the 2.5%. If you ask me why, I can only say, like Janet Reno, “It’s the law.” And you don’t get credit on the discount you get for generics (it was this way in 2012, too) as technically this is paid not by the plan nor by the manufacturer, but by the government.]

And while it will be different for each beneficiary, I estimate that in general you will actually pay somewhat over $2,000 of your own money on your Part D drugs before you get out of the donut hole and into the next band.

Catastrophic Band: From $4,750 Up

And once a beneficiary’s “drug expenses” reach $4,750 (this was $4,700 in 2012), the beneficiary goes into the Catastrophic Band, where the beneficiary pays 5% of the cost of a drug, and the plan, 95%. This is sometimes called the “5% Band” for obvious reasons.  There are no upper limits to this band.

And be advised that there have been tiny changes made to the minimum amount you must pay in this Catastrophic Band. The minimum you must pay on a generic or preferred multi-source drug is $2.65 (up a nickel from 2012), and, for other drugs (typically a brand-name), $6.60, (up a dime from 2012).

New Prepayment Review of and Preapproval Process for “Over-Limit” Outpatient Therapy Services

[NOTE: See the blog of 1-8-13 for how all this works in 2013.]

If you have had outpatient physical, speech language, and / or occupational therapy services covered by Medicare this calendar year, and Medicare has approved $1,700 or more for this type of care by August 31, you may get a notice from Medicare telling you that limits or caps are bring imposed on outpatient therapy for the remainder of the year. (You may get this even if you are no longer actually getting therapy.)

What’s this all about?

Beneficiaries who are or will be receiving outpatient physical, speech language, and / or occupational therapy from October 1 to December 31, 2012 need to be aware of a new requirement being imposed on therapy providers beginning October 1. This new requirement was mandated by a recent statute. Interestingly, the law specifically granted the government, in this case the Centers for Medicare & Medicaid Services (CMS), the authority to enforce the provisions without going through the normal process of publishing regulations and seeking public comment.

Currently there is a statutory limit, or cap, on the dollar amount of outpatient therapy services a beneficiary can receive in a year. This limit has been in place for some years, and although the dollar amount changes each year, in 2012 the limit is $1,880 for physical and speech therapy combined, and a separate limit of $1,880 for occupational therapy. But for several
years Congress has allowed exceptions to these limits, by permitting therapists, when these caps are exceeded, to certify that the additional, over-limit therapy services they are providing are medically necessary for the beneficiary.

The new provision in the law requires Medicare Administrative Contractors (MACs), which are the companies that Centers for Medicare & Medicaid Services contracts with to review and process Medicare claims, to individually review all therapy claims that exceed a limit of $3,700 for a beneficiary. This limit is, as are the statutory limits, imposed on physical and speech therapy services combined, and, separately, on occupational therapy. So there are two, separate $3,700 caps. In addition, this provision requires that the review must be made before the MAC processes and pays the claim.

Because these reviews would hold up payments of appropriate claims, Centers for Medicare & Medicaid Services is also permitting therapy providers to request, from the Medicare Administrative Contractors, preapproval of any therapy services they render to a beneficiary. In this way, when they have actually performed the therapy and submit a claim, the medical necessity of the services had already been approved, and the claim can go right to payment. And rather than preapprove each and every therapy session, therapists must request the preapproval of blocks or chunks of 20 therapy days at a time.

This should concern beneficiaries, but only to a limited extent. These limits do not apply to beneficiaries in Medicare Advantage (Part C), but only to those in Original (fee-for-service) Medicare. And they are only for outpatient therapy, not for therapy you may get in as an inpatient during a Medicare covered hospital or Skilled Nursing Facility (SNF) stay. Nor does it apply to therapy you get under a home health plan of care. And, finally, it does not apply to therapy you get as an outpatient of a so-called “critical care hospital,” typically these are in rural areas; but contrary to what you may have heard, as this is new in 2012, it does apply to outpatient therapy you receive in all other hospitals.

But if these exceptions don’t apply, and you have gotten a lot of therapy this calendar year, you may get a voluntary Advance Beneficiary Notice (ABN) from your therapy provider that your services may not be covered. And whether you get one or not, beneficiaries need to understand that Centers for Medicare & Medicaid Services is taking the position that if you receive therapy over and above the statutory $1,880 limit and it is not medically necessary, you are not protected by the limitation-of-liability provision as the care is statutorily excluded, like eyeglasses or dental care. Normally, if a beneficiary gets a service that is not medically necessary, even when Medicare denies the claim, the beneficiary does not have to pay the provider for the care as it is assumed the beneficiary had no way of knowing that the care was not covered, unless of course they got an Advanced Beneficiary Notice saying that it wasn’t. So that’s why you may get one from your therapist, even if in this case they are not required to give it to you. But if you do get one, or if you think your therapy may exceed the $3,700 cap, you may wish to defer your therapy and ask that your therapist get preapproval from Medicare for your therapy. The Medicare Administrative Contractors have to OK or deny a preapproval request in 10 working days, or it is automatically approved, so the decision should not be too long in coming, and you may prefer waiting a bit to make sure whether or not you’ll be liable for the therapy services.

And there are a few more quirks. One is that as part of its implementation strategy, Medicare will be phasing the new requirement in gradually. So on October 1 not all therapists will come under this, but only about a third, and then the next third on November 1, and the final third on December 1. So it’s possible that this will keep you from falling into it. The other is that this whole thing is scheduled to go away December 31, 2012, so unless Congress passes new legislation concerning this, you can forget about it in 2013!

Get Ready Now for Medicare Open Enrollment Part D Changes

It’s less than two months to Medicare Open Enrollment, so it’s time for you to get familiar with what will change in 2013 and what you need to do now to prepare for it. This blog concerns Part D; I’ll blog shortly about Part D Extra Help, and then about Part C – Medicare Advantage, so you’ll have the whole story.

Of extreme importance is that the Annual Election Period (the open enrollment period) will begin on Monday, October 15 and will run only until Friday, December 7 of 2012. (Recall that these dates changed last year.) So if you want to change your plan, you will have to do so in this time frame. If you do change, it will be effective on Tuesday, January 1, 2013.

One thing that you ought to do now to prepare for this is to make sure that to the extent possible you are on the right drugs and dosages. So, for example, if you were planning to visit your physician to check on a condition you have, or if you are scheduled for a lab test to determine if a drug you are taking is working properly, you should be sure to do these now, so if you have to change your prescriptions in any way, you will know this before you go to determine which Part D plan is best for you in the coming year. Or, if you are eligible for the annual wellness visit, do that now, so if anything comes up, and you are put on a new medicine, you will know what it is.

And be sure to update your personal list of drugs you take so it’s completely up-to-date. While this list is critical in using Medicare’s plan finder to get you the best drug plan, you should always have such a list with you so you can show it to any health professional when you visit them, or if you have a medical emergency.

Steady Part D Premiums

The actuaries at the Centers for Medicare & Medicaid Services (CMS) recently released information about some of the costs that beneficiaries will experience in Part D of the Medicare program in 2013. The good news is that the monthly premiums for Part D plans will remain pretty much what they are this year. And while advocacy groups warn you that this does NOT mean that your plan’s premium will not go up, what it does mean is that you probably will be able to find a drug plan for 2013 that will cost about what you are now paying in premiums. Just remember that every year you should take advantage of the annual open enrollment period to search for the best Part D deal you can get – taking into consideration not only your monthly premiums, but also deductibles, co-payments, the plan’s formulary, and the restrictions it places on individual drugs in its formulary.

Discounts in the “Donut Hole”

More good news. In 2013 the discounts you will get if you go into the “donut hole” will increase on both brand name and generic drugs. Specifically, the discount on brand name drugs will increase slightly to 52.5% (from 50% in 2012) and, for generic drugs, to 21% (from 14% in 2012). So, in effect, the donut hole will close a little more in 2013.

[And you might want to skip this because it’s a little technical, but if you do go into the donut hole, only part of the discount you will get on your drugs will count toward your so-called “True Out-of-Pocket” costs (sometimes abbreviated as “TrOOP”) as you head toward the so-called "Catastrophic Band" of the Part D benefit, where Medicare will pay 95% of your drug costs. Specifically, the additional 2.5% discount you will get in 2013 on your brand name drugs will NOT count toward your TrOOP, but, as in 2012, the 50% discount will. And the 21% discount on your generic medications will NOT count toward TrOOP, just as the 14% discount in 2012 does NOT count toward it.]

Some other information the actuaries released include what the monthly premium late enrollment penalty will be. This usually changes each year, and generally applies to those beneficiaries who did not sign up at their first opportunity to get Part D. (If they had “credible coverage” it does not apply, nor does it apply to those beneficiaries who get “Extra Help.”) The penalty in 2013 will be $0.3117 for each month that you could have had Part D coverage but did not. This is only very slightly higher than the current 2012 penalty of $0.3108. These penalties are applied to your plan’s monthly premium amount and are collected with your premium.

High-Income Surcharge

The number-crunchers also have calculated the so-called high “income related Medicare adjustment amounts,” also known by their acronym “IRMAA,” and which I have always called the Part D premium surcharges. Again, if you are subject to this, the amounts will increase only slightly in 2013. More specifically, you will be subject to this if your 2011 adjusted gross income plus your tax-free interest exceeds $170,000 for a couple filing jointly or $85,000 for an individual or a married person filing separately. (Your adjusted gross income plus your tax-free interest is called your “Modified Adjusted Gross Income,” or MAGI.) Be aware that the health care reform legislation de-indexed these amounts (They used to rise with inflation.), so it’s possible that if your income in 2011 was higher than in 2010, you will first be subject to this in 2013. (And remember that if you are subject to these for Part D, you will also be subject to the much higher Part B surcharge, if you have Part B. The Part B premium amounts and surcharges have not yet been announced for 2013.)

The actual amounts that will be in effect for 2013 are:

FOR COUPLES FILING JOINTLY:

If your 2011 joint income was over $170,000 and less than or equal to $214,000, your monthly surcharge is $11.60, the same as 2012.

If your 2011 joint income was over $214,000 and less than or equal to $320,000, your monthly surcharge is $29.90, the same as 2012.

If your 2011 joint income was over $320,000 and less than or equal to $428,000, your monthly surcharge is $48.30, up only 20¢ from 2012.

If your 2011 joint income was over $428,000, your monthly surcharge is $66.60, up only 20¢ from 2012.

(Remember that these are the rates for each beneficiary with Part D, so if you and your spouse are both enrolled in it, you each have to pay this monthly surcharge.)

FOR MARRIED PERSONS FILING SEPARATELY:

If your 2011 income was over $85,000 and less than or equal to $129,000, your monthly surcharge is $48.30, up only 20¢ from 2012.

If your 2011 income was over $129,000, your monthly surcharge is $66.60, up only 20¢ from 2012.

FOR INDIVIDUALS:

If your 2011 income was over $85,000 and less than or equal to $107,000, your monthly surcharge is $11.60, the same as 2012.

If your 2011 income was over $107,000 and less than or equal to $160,000, your monthly surcharge is $29.90, the same as 2012.

If your 2011 income was over $160,000 and less than or equal to $214,000, your monthly surcharge is $48.30, up only 20¢ from 2012.

If your 2011 income was over $214,000, your monthly surcharge is $66.60, up only 20¢ from 2012.

These surcharges are not collected by your drug plan, but by the Government, and you get them deducted from your Social Security, Railroad Retirement, or Federal Civil Service monthly payment; otherwise Medicare will bill you quarterly for them.

Enrollment Periods

Medicare beneficiaries will be receiving their Medicare & You 2013 booklets in the mail in early October. Again, this signals that the open enrollment period will soon begin, on October 15, and will end with December 7.

And, as happened last year, a 5-Star Special Enrollment Period (SEP) will open on Saturday, December 8 and will be continuously open from then and throughout 2013. This will allow a Medicare beneficiary to sign up for a 5-Star Medicare Advantage and / or a 5-Star Part D drug plan. A beneficiary can enroll in a 5-Star Medicare Advantage and / or a 5-Star Part D drug plan whether they are in Original Medicare or are already in a Medicare Advantage and / or a Part D drug plan. A beneficiary can enroll beginning on December 8, 2012 and any day thereafter, and their enrollment will be effective with the first day of the month following their enrollment. Also, a beneficiary enrolled in a plan with a 5-star overall rating may also switch to a different plan with a 5-star overall rating. A beneficiary can use this Special Enrollment Period only once for an enrollment effective in 2013. Note that achieving this rating is not easy, so it may be that you won’t have a 5-Star option available to you in your area.

Warning: A beneficiary in an Medicare Advantage only plan or in a Medicare Advantage plan with Part D coverage who switches to a stand-alone Part D prescription drug plan (PDP) with a 5-star overall rating will lose Medicare Advantage coverage and will revert to Original Medicare for basic medical coverage.

Incomplete Preventive Services Email from Medicare

I recently (mid-July) got an “Important Message” email from the Centers for Medicare & Medicaid Services (CMS) which had the months from July 2012 to June 2013 blocked out along with a reminder that my annual wellness visit could be scheduled for September. This is a handy prompt and it was accurate in that this was one year after my last such check-up. But it is also quite incomplete. This is because men my age (65 and up) are also eligible for annual colorectal cancer screening, prostrate cancer screening, HIV screening and, of course, the annual flu shot, not to mention many other services if you are pre-diabetic, etc. (All these available for 2012 are on my section on Self-Counsel Press’s website.)

I have noticed in the past that MyMedicare.gov (where you sign into your personal account) has never had info about preventive services totally correct, and their excuse seems a little lame. But it’s a bit more accurate than the email, because it did note that I’m due for a prostrate test. (Perhaps the email can only handle one service per month?) So when you get your email, use it not as a comprehensive list, but as a reminder to line up and get all the preventive, screening and educational services you are eligible for.

FLORIDA MEDIGAP POLICIES AVAILABLE IN 2012

by George Jacobs, author of Managing Your Medicare, published by Self-Counsel Press


I am doing an extensive analysis of the Medigap (Medicare supplement) policies currently available to Medicare beneficiaries. This is because the structure of new policies available to beneficiaries changed in June of 2010, and by now there is enough information to give some guidance on both the availability and prices of the newly structured policies.

There is no need to go into explaining the new structure; this is all spelled out in Managing Your Medicare, on page 157. But what I have available here is information for those age 65, which is when most beneficiaries get a Medigap policy, on the number of regular (or fee-for-service) policies available, the lowest priced one available, the highest priced one available, and the average price. This information is given first for females, and then for males, as the prices usually differ. Even better, this information is given for each policy type. Also, there is a quick comparison of the average price of each policy type to type “A”, the “basic” policy, so you can easily determine roughly how much more or less the policy type you are looking at compares to the basic one, or indeed, to any other policy type. All this is harder to explain than it is to show. In addition, I repeat similar information for SELECT or network Medigap policies. Recall that these Medigap policies require you to go to physicians and providers which are in the Medigap insurance company’s network of providers for complete payment; on the other hand, they may be a little cheaper than regular policies. (With a regular or fee-for-service policy, you can go to any doctor, hospital or provider who will accept it, and almost all do.)

You should understand that I have drawn information for the prices in Hillsboro County as this is somewhat representative of the state of Florida as a whole. Prices are substantially higher if you live in the Miami area; if you live in Walton County they are the same or a bit less. All this information, which was up-to-date in January of 2012, comes from the Florida Office of Insurance Regulation website, www.floir.com, which has more detailed information on these policies.

It is interesting to note that the prices for males tend to be just a little more expensive than those for females, but many companies sell their policies for the same price, and, almost without exception, the lowest price available for each policy type for a female is also available to a male. And, in general, if you are above age 65, note that the prices for policies will be about 15% higher at age 70, and about 33% higher at age 75.

Again, remember that for each policy type, the benefits are exactly the same no matter who sells it, and you should aggressively look for the best price. But remember that the prices may vary because the policies are priced or “rated” with different methodologies. (The “attained-age” policies go up in price as you age, but may be the least costly to begin with. “Issue-age” policies do not go up because you age, but their premiums may increase, as will attained-age policies, for medical technology and inflation. “Community-rated” policies are sold at the same price throughout a given area, and may be the most expensive, but are often available even to those that don’t have a guaranteed issue right. Always check with an insurance company to find out how a policy you are interested in is rated, and be aware of the implications. These terms are more extensively covered in Managing Your Medicare.) It is interesting to note, that for beneficiaries age 65, there are not huge differences in Florida in the prices of Medigap policies as there are in many other states, but prices do vary substantially. Please understand that the prices shown here and what you are quoted will vary somewhat because of how and how often you pay your premium, whether you smoke, where you live in Florida, etc., etc., so use these as guides rather than exact “matches.” The dollar amounts shown below are the annual cost of the policies. And note that in some cases a policy is available only to members of a particular group.

Florida Medigap Policies Females, Age 65

Policy A:
The lowest price available is $1,331, the highest is $1,956, and the average is $1,699.
This is the “basic” policy. 27 different policies are available. No SELECT “A” policies are available.

Policy B:
The lowest price available is $1,764, the highest is $2,604, and the average is $2,072.
On the whole, these cost about 22% more than Policy A. 19 different policies are available.
One SELECT policy ($1,517) is also available.

Policy C:
The lowest price available is $2,046, the highest is $2,717, and the average is $2,375.
On the whole, these cost about 40% more than Policy A. 19 different policies are available.
Four SELECT policies are also available; the lowest price is $1,635, the highest is $2,451.
These are popular.

Policy D:
The lowest price available is $1,917, the highest is $2,484, and the average is $2,178.
On the whole, these cost about 28% more than Policy A. 14 different policies are available.
Three SELECT policies are also available; the lowest price is $1,634, the highest is $2,188.

Policy F:
The lowest price available is $2,058, the highest is $2,896, and the average is $2,414.
On the whole, these cost about 42% more than Policy A. 27 different policies are available.
Five SELECT policies are also available; the lowest price is $1,647, the highest is $2,458.
These cover all Medigap benefits and are popular.

Policy F – High Deductible:
The lowest price available is $624, the highest is $1,082, and the average is $865.
On the whole, these cost about 49% less than Policy A. 10 different policies are available.  Remember that you pay the first $2,070 of your medical expenses in 2012 before it kicks in.
No SELECT “F – High Deductible” policies are available.

Policy G:
The lowest price available is $1,929, the highest is $2,493, and the average is $2,190.
On the whole, these cost about 29% more than Policy A. 16 different policies are available.
Two SELECT policies are also available; the lower price is $1,767, the higher is $2,105.

Policy K:
The lowest price available is $816, the highest is $1,303, and the average is $1,103.
On the whole, these cost about 35% less than Policy A. 4 different policies are available.  This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.

No SELECT “K” policies are available.
Policy L:
The lowest price available is $1,227, the highest is $1,923, and the average is $1,627.
 the whole, these cost about 4% less than Policy A. 6 different policies are available.  This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.

No SELECT “L” policies are available.
Policy M:
The lowest price available is $1,823, the highest is $2, 216, and the average is $2,021.
On the whole, these cost about 19% more than Policy A. 7 different policies are available.
One SELECT policy ($1,624) is also available.
This policy is very new.

Policy N:
The lowest price available is $1,485, the highest is $2,325, and the average is $1,895.
On the whole, these cost 12% more than Policy A. 15 different policies are available.
No SELECT “N” policies are available.
This policy is very new.

Florida Medigap Policies Males, Age 65

Policy A:
The lowest price available is $1,331, the highest is $2,213, and the average is $1,827.
This is the “basic” policy. 27 different policies are available.
No SELECT “A” policies are available.

Policy B:
The lowest price available is $1,764, the highest is $2,996, and the average is $2,214.
On the whole, these cost about 21% more than Policy A. 19 different policies are available.
One SELECT policy ($1,517) is also available.

Policy C:
The lowest price available is $2,046, the highest is $3,124, and the average is $2,515.
On the whole, these cost about 38% more than Policy A. 19 different policies are available.
Four SELECT policies are also available; the lowest price is $1,635, the highest is $2,640.
These are popular.

Policy D:
The lowest price available is $1,917, the highest is $2,858, and the average is $2,323.
On the whole, these cost about 27% more than Policy A. 14 different policies are available.
Three SELECT policies are also available; the lowest price is $1,634, the highest is $2,357.

Policy F:
The lowest price available is $2,058, the highest is $3,333, and the average is $2,590.
On the whole, these cost about 42% more than Policy A. 27 different policies are available.
Five SELECT policies are also available; the lowest price is $1,647, the highest is $2,647.
These cover all Medigap benefits and are popular.

Policy F – High Deductible:
The lowest price available is $717, the highest is $1,244, and the average is $975.
On the whole, these cost about 47% less than Policy A. 10 different policies are available.  Remember that you pay the first $2,070 of your medical expenses in 2012 before it kicks in.
No SELECT “F – High Deductible” policies are available.

Policy G:
The lowest price available is $1,929, the highest is $2,869, and the average is $2,378.
On the whole, these cost about 30% more than Policy A. 16 different policies are available.
Two SELECT policies are also available; the lower price is $2,031, the higher is $2,392.

Policy K:
The lowest price available is $816, the highest is $1,499, and the average is $1,173.
On the whole, these cost about 36% less than Policy A. 4 different policies are available.  This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.

No SELECT “K” policies are available.
Policy L:
The lowest price available is $1,227, the highest is $1,211, and the average is $1,721.
On the whole, these cost about 6% less than Policy A. 6 different policies are available.  This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.

No SELECT “L” policies are available.

Policy M:
The lowest price available is $1,823, the highest is $2, 548, and the average is $2,239.
On the whole, these cost about 23% more than Policy A. 7 different policies are available.
One SELECT policy is available; it costs $1,624.
This policy is very new.

Policy N:
The lowest price available is $1,485, the highest is $2,676, and the average is $2,089.
On the whole, these cost 14% more than Policy A. 15 different policies are available.
No SELECT “N” policies are available.
This policy is very new.

ALABAMA MEDIGAP POLICIES AVAILABLE IN 2012

by George Jacobs, author of Managing Your Medicare, published by Self-Counsel Press


I have done an extensive analysis of the Medigap (Medicare supplement) policies currently available to Medicare beneficiaries. This is because the structure of new policies available to beneficiaries changed in June 2010, and by now there is enough information to give some guidance on both the availability and prices of the newly structured policies.

There is no need to go into explaining the new structure; this is all spelled out in Managing Your Medicare, on page 157. But what I have available here is information, for those age 65, which is when most beneficiaries get a Medigap policy, on the number of policies available, the lowest priced one available, the highest priced one available, and the average price. Even better, this information is given for each policy type. There is also a quick comparison of the average price of each policy type to type “A”, the “basic” policy, so you can easily determine roughly how much more or less the policy type you are looking at compares to the basic one, or indeed, to any other policy type. I also include some very brief information as to what these will cost for a beneficiary age 70. All this is harder to explain than it is to show.

A word of caution, though. This data was collected from the Alabama Department of Insurance website, www.aldoi.gov/PDF/Consumers/MedSupCompanies.pdf. Unlike many state’s similar websites, this one gives the information in a composite manner, and, for example, does not separate non-smoking (or non-tobacco use) rates from smokers’ rates, or male rates from female rates, or rates in one of the areas in the state from another (although it does separate by age). Rather, it gives only the very lowest price of each company’s policy type. So you will likely pay more, perhaps much more, than the information shows.

Again, remember that for each policy type, the benefits are exactly the same no matter who sells it, and you should aggressively look for the best price. But you will note significant differences in prices for the same policy type; and some of this may be due to restrictions, for example, a policy may not cover a pre-existing condition for a period of time, in other cases because the policies are priced or “rated” with different methodologies. (The “attained-age” policies go up in price as you age, but may be the least costly to begin with. “Issue-age” policies do not go up because you age, but their premiums may increase, as will attained-age policies, for medical technology and inflation. “Community-rated” policies are sold at the same price throughout a given area, and may be the most expensive, but are often available even to those that don’t have a guaranteed issue right. Always check with an insurance company to find out how a policy you are interested in is rated, and be aware of the implications. These terms are more extensively covered in Managing Your Medicare.) But a good deal of the variation appears just to be different prices for the same benefits. And, remember you will almost certainly pay more than the amounts shown; the dollar amounts below are the rounded monthly cost of the policies.

Medigap Policies –– Age 65

(NOTE: The prices for these run about 20% more for a beneficiary age 70.)

Policy A:
The lowest minimum price available is $77, the highest is $126, and the average is $93.
This is the “basic” policy. Some 20 different companies offer these.

Policy B:
The lowest minimum price available is $87, the highest is $152, and the average is $119.
On the whole, these cost about 28% more than Policy A. 11 different companies offer these.

Policy C:
The lowest minimum price available is $108, the highest is $158, and the average is $135.
On the whole, these cost about 45% more than Policy A. 11 different companies offer these.  These are popular.

Policy D:
The lowest minimum price available is $93, the highest is $144, and the average is $117.
On the whole, these cost about 25% more than Policy A. 3 different companies offer these.

Policy F:
The lowest minimum price available is $109, the highest is $165 and the average is $135.
On the whole, these cost about 44% more than Policy A. 17 different companies offer these.  These cover all Medigap benefits and are popular.

Policy F – High Deductible:
The lowest minimum price available is $35 the highest is $53, and the average is $44.
On the whole, these cost about 53% less than Policy A. 7 different companies offer these. Remember that you pay the first $2,070 of your medical expenses in 2012 before it kicks in.

Policy G:
The lowest minimum price available is $94, the highest is $145, and the average is $108.
On the whole, these cost about 16% more than Policy A. 9 different companies offer these.

Policy K:
The lowest minimum price available is $56, the highest is $80, and the average is $63.
On the whole, these cost about 32% less than Policy A. 7 different companies offer these.  This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660

Policy L:
The lowest minimum price available is $84, the highest is $112, and the average is $93.
On the whole, these cost about the same as Policy A. 5 different companies offer these.  This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.

Policy M:
The lowest minimum price available is $89, the highest is $112, and the average is $101.
On the whole, these cost about 8% more than Policy A. 3 different companies offer these.  This policy is very new.

Policy N:
The lowest minimum price available is $77, the highest is $130, and the average is $98.
On the whole, these cost about 5% more than Policy A. 11 different companies offer these.  This policy is very new.

If you email me at gjacobs23@windstream.net I will send you an Excel file which provides more information.

CALIFORNIA MEDIGAP POLICIES AVAILABLE IN 2012

by George Jacobs, author of Managing Your Medicare, published by Self-Counsel Press

I have done an extensive analysis of the Medigap (Medicare supplement) policies currently available to Medicare beneficiaries. This is because the structure of new policies available to beneficiaries changed in June 2010, and by now there is enough information to give some guidance on both the availability and prices of the newly structured policies.

There is no need to go into explaining the new structure; this is all spelled out in Managing Your Medicare, on page 157. But what I have available here is information, for those age 65, which is when most beneficiaries get a Medigap policy, on the number of policies available, the lowest priced one available, the highest priced one available, and the average price. Even better, this information is given for each policy type. There is also a quick comparison of the average price of each policy type to type “A”, the “basic” policy, so you can easily determine roughly how much more or less the policy type you are looking at compares to the basic one, or indeed, to any other policy type. All this is harder to explain than it is to show. Finally, you may wish to know that if you first purchase a policy at age 70, the price will run about 20 percent higher than these age 65 policies; and, if at age 75, about 45 percent higher. (Does not apply to community-rated policies.)

A word of caution, though. This data is for Los Angeles County, by far the most populous in the state. If you live in another county, your rates are most likely lower, but in some they are actually higher. But this data will give you an excellent feel for availability and relative pricing of Medigap policies for the entire Golden State. This data was collected from the California Department of Insurance website, www.insurance.ca.gov, in February, 2012. I’ve checked their information against some insurance company websites, and it appears very accurate.

Again, remember that for each policy type, the benefits are exactly the same no matter who sells it, and you should aggressively look for the best price. But you will note significant differences in prices for the same policy type; in almost all cases by a factor of 2, and in some cases, even more! Some of this may be due to differences in whether a waiting period applies to a pre-existing condition, and if so, how long it is; in other cases because the policies are priced or “rated” with different methodologies. (The “attained-age” policies go up in price as you age, but may be the least costly to begin with. “Issue-age” policies do not go up because you age, but their premiums may increase, as will attained-age policies, for medical technology and inflation. “Community-rated” policies are sold at the same price throughout a given area, and may be the most expensive, but are often available even to those that don’t have a guaranteed issue right. Always check with an insurance company to find out how a policy you are interested in is rated, and be aware of the implications. These terms are more extensively covered in Managing Your Medicare.) But a good deal of the variation appears just to be different prices for the same benefits. Remember also that you may be quoted a somewhat different price than I show; for example, it may be more if you smoke, or you may qualify for a discount if you sign up for auto-pay. The dollar amounts shown below are the annual cost of the policies.

Medigap Policies – Age 65 – LA County, California

Policy A:
The lowest price available is $1,042, the highest is $2,301, and the average is $1,484.
This is the “basic” policy. Some 28 different policies are offered.

Policy B:

The lowest price available is $1,430, the highest is $2,618, and the average is $1,832.
On the whole, these cost about 23% more than Policy A. 17 different policies are offered.

Policy C:
The lowest price available is $1,693, the highest is $3,012, and the average is $2,065.
On the whole, these cost about 39% more than Policy A. 16 different policies are offered.  These are popular.

Policy D:
The lowest price available is $1,524, the highest is $2,430, and the average is $1,939.
On the whole, these cost about 31% more than Policy A. 9 different policies are offered.

Policy F:
The lowest price available is $1,644, the highest is $3,309, and the average is $2,141.
On the whole, these cost about 44% more than Policy A. 28 different policies are offered.  These cover all Medigap benefits and are popular.

Policy F – High Deductible:
The lowest price available is $395, the highest is $1,433, and the average is $776.
On the whole, these cost about 48% less than Policy A. 6 different policies are offered.  The deductible in 2012 is $2,070.

Policy G:
The lowest price available is $1,461, the highest is $3,186, and the average is $2,080.
On the whole, these cost about 40% more than Policy A. 15 different policies are offered.

Policy K:
The lowest price available is $611, the highest is $1,203, and the average is $901.
On the whole, these cost about 39% less than Policy A. 6 different policies are offered.  This is the 50% catastrophic policy. The catastrophic level for this policy in 2012 is $4,660.

Policy L:
The lowest price available is $987, the highest is $1,750, and the average is $1,371.
On the whole, these cost about 8% less than Policy A. 8 different policies are offered.  This is the 75% catastrophic policy. The catastrophic level for this policy in 2012 is $2,330.

Policy M:
The lowest price available is $1,239, the highest is $2,195, and the average is $1,685.
On the whole, these cost about 14% more than Policy A. 7 different policies are offered.  This policy is very new.

Policy N:
The lowest price available is $911, the highest is $2,100, and the average is $1,475.
On the whole, these cost about 2% less than Policy A. 15 different policies are offered.  This policy is very new.

TEXAS MEDIGAP POLICIES AVAILABLE IN 2012

by George Jacobs, author of Managing Your Medicare, published by Self-Counsel Press


I have done an extensive analysis of the Medigap (Medicare supplement) policies currently available to Medicare beneficiaries. This is because the structure of new policies available to beneficiaries changed in June 2010, and by now there is enough information to give some guidance on both the availability and prices of the newly structured policies.

There is no need to go into explaining the new structure; this is all spelled out in Managing Your Medicare, on page 157. But what I have available here is information, for those age 65, which is when most beneficiaries get a Medigap policy, on the number of policies available, the lowest priced one available, the highest priced one available, and the average price. Even better, this information is given for each policy type. There is also, for standard policies, a quick comparison of the average price of each policy type to type “A”, the “basic” policy, so you can easily determine roughly how much more or less the policy type you are looking at compares to the basic one, or indeed, to any other policy type. I also include some very brief information as to what these will cost for a beneficiary age 70 and 75. All this is harder to explain than it is to show.

A word of caution, though. This data was collected from the Texas Department of Insurance website, www.tdi.texas.gov, in February, 2012. It gives, for each company, and for each policy type, the lowest and highest price, and you will be quoted a price within that bracket. Some of the factors which vary the price include where you live in Texas, your sex, whether or not you use tobacco, whether the policy is “guaranteed issue,” etc. And you may get a discount, for example, if you use auto-pay to pay your premiums.

Some Medigap policies are “attained-age rated,” some are “issue-age rated” and some are “community rated.” The attained-age policies go up in price as you age, but may be the least costly to begin with, and it appears that this type policy is common in Texas. Issue-age policies do not go up because you age, but their premiums may increase, as will attained-age policies, for medical technology and inflation. Community-rated policies are sold at the same price throughout a given area, and may be the most expensive, but are often available even to those that don’t have a guaranteed issue right. Always check with an insurance company to find out how a policy you are interested in is rated, and be aware of the implications.

With this in mind, remember that each type policy sold had the exact same benefits no matter who sells it, and you should aggressively look for the best price. You will note significant differences in prices for the same policy type; in almost all cases by a factor of 3, and in some cases, even more! The dollar amounts shown below are the annual cost of the policies. First we show all the information on standard or fee-for-service policies, and then, the information on SELECT or network policies.

Finally, you may wish to know that if you first purchase a policy at age 70, the price will run about 20 percent higher than these age 65 policies; and, if at age 75, about 45 percent higher.

Standard or “Fee-for-Service” Medigap Policies – Age 65 – Texas

Policy A:
The lowest price available is $817, the highest is $2,932, and the average is $1,445.
This is the “basic” policy. Some 48 different policies are available.

Policy B:
The lowest price available is $1,017, the highest is $3,339, and the average is $1,765.
On the whole, these cost about 22% more than Policy A. 22 different policies are available.

Policy C:
The lowest price available is $1,200, the highest is $3,796, and the average is $1,951.
On the whole, these cost about 35% more than Policy A. 26 different policies are available.  These are popular.

Policy D:
The lowest price available is $1,029, the highest is $2,948, and the average is $1,706.
On the whole, these cost about 18% more than Policy A. 13 different policies are available.

Policy F:
The lowest price available is $1,011, the highest is $3,629, and the average is $1,919.
On the whole, these cost about 33% more than Policy A. 41 different policies are available.  These cover all Medigap benefits and are popular.

Policy F – High Deductible:
The lowest price available is $278, the highest is $1,263, and the average is $657.
On the whole, these cost about 55% less than Policy A. 17 different policies are available.  The deductible in 2012 is $2,070.

Policy G:
The lowest price available is $1,045, the highest is $2,962, and the average is $1,664.
On the whole, these cost about 15% more than Policy A. 29 different policies are available.


Policy K:
The lowest price available is $574, the highest is $1,706, and the average is $961.
On the whole, these cost about 33% less than Policy A. 12 different policies are available.  This is the 50% catastrophic policy.  The catastrophic level for this policy in 2012 is $4,660.


Policy L:
The lowest price available is $922, the highest is $2,400, and the average is $1,436.
On the whole, these cost about the same as Policy A. 9 different policies are available.  This is the 75% catastrophic policy.  The catastrophic level for this policy in 2012 is $2,330.

Policy M:
The lowest price available is $962, the highest is $2,430, and the average is $1,458.
On the whole, these cost about the same as Policy A. 9 different policies are available.  This policy is very new.

Policy N:
The lowest price available is $828, the highest is $2,885, and the average is $1,338.
On the whole, these cost about 7% less than Policy A. 32 different policies are available.  This policy is very new.

SELECT or Network Medigap Policies – Age 65 – Texas

These policies require you to go to physicians and providers which are in your Medigap insurer’s network for your insurer’s full payment. (As only one basic policy is offered, we don’t do price comparisons to it here.)

Policy A:
The lowest price available is $1,487, the highest is $1,693, and the average is $1,590.
This is the “basic” policy. Only 1 policy is available.


Policy B:
The lowest price available is $951, the highest is $1,723, and the average is $1,382.
4 different policies are available.

Policy C:
The lowest price available is $1,022, the highest is $2,230, and the average is $1,564.
6 different policies are available.

Policy D:
The lowest price available is $840, the highest is $1,745, and the average is $1,277.
6 different policies are available.


Policy F:
The lowest price available is $1,047, the highest is $3,368, and the average is $1,638.
12 different policies are available. These cover all Medigap benefits and are popular.


Policy F – High Deductible:
The lowest price available is $480, the highest is $797, and the average is $632.
2 different policies are available.  The deductible in 2012 is $2,070.


Policy G:
The lowest price available is $856, the highest is $1,780, and the average is $1,366.
8 different policies are available.


Policy K:
The lowest price available is $612, the highest is $960, and the average is $799.
2 different policies are available. This is the 50% catastrophic policy.  The catastrophic level for this policy in 2012 is $4,660.

Policy L:
The lowest price available is $1,104, the highest is $1,356, and the average is $1,230.
Only 1 policy is available. This is the 75% catastrophic policy.  The catastrophic level for this policy in 2012 is $2,330.

Policy M:
The lowest price available is $923, the highest is $1,534, and the average is $1,216.
2 different policies are available. This policy is very new.


Policy N:
The lowest price available is $722, the highest is $1,459, and the average is $1,089.
7 different policies are available. This policy is very new.