Sunday, August 26, 2012

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.



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