Saturday, November 9, 2013

Changes in Medicare Deductibles, Premiums, etc. for 2014 - Parts B, A, C, D

Part B

Most of the Medicare annual change amounts have been released for 2014, and the good news is that the Part B premium and deductible will not change.  That is, the Part B monthly premium will stay at $140.90, and the annual deductible at $147.  This is particularly nice for beneficiaries as your Social Security cost-of-living increase will only be 1.5%, but none of this rather modest increase will be eaten up by any rise in your Part B premium.

For those of you who have to pay a High Income Part B Premium Surcharge, your monthly surcharge will not change.  And while only about 5% of beneficiaries must pay these surcharges, remember that the base income amounts (the so-called modified adjusted gross income, or MAGI) which determine if you are subject to this stay the same from year to year, so some few of you who don’t pay this in 2013 may have to in 2014.  (If so, you should have been informed of this by the Social Security Administration by now.)  And also remember that your 2014 surcharge will be based on your 2012 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 at all.  (Again, you should have been informed of this by Social Security by now.)

And the Part B coinsurance rate for outpatient mental health services will decrease to 20% in 2014.  That is, the coinsurance for these services will, beginning in 2014, be the same as for the other Part B services subject to coinsurance.  So in this respect will now be parity between all Part B services – mental or physical – for the first time since the program began.

Part A

The Part A inpatient hospital deductible goes up by $32 in 2014 to $1,216. This is the amount you are responsible for the first 60 days of an inpatient stay.  And, of course, the various other Part A co-pays have modest increases.  For longer hospital stays (from 61 to 90 days), the daily co-pay will be $304 (up $8); for even longer hospital stays (over 90 days), the daily co-pay will be $608 (up $16); and the daily co-pay for long skilled nursing facility (SNF) stays (from 21 to 100 days) will be $152 (up $4).

Those relatively very few of beneficiaries who pay for their Part A will welcome the news that their monthly premiums will again decrease in 2014.  The Part A premium for those currently paying $441 a month will decrease $15 a month to $426, and for those paying $243, it will go down $9 to $234 a month.

Part C

The Centers for Medicare & Medicaid Services reports that in Part C – Medicare Advantage or Medicare managed care – the premiums have gone up, on average, about 5% for 2014, or about $1.60 a month, quite modest.  But your current plan’s may have changed more, and always remember that you need to do your homework every year to see if you are in the best plan for you.  Or, if you are in Original Medicare, you may wish to consider joining a Medicare Advantage plan.  (For example, a lot of work has been done to improve Special Needs Plans, and to develop plans that work for dual Medicare-Medicaid beneficiaries.)  Remember that you mostly have only until Saturday, December 7, 2013 to join or change plans, 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; if so, this will occur effective with Wednesday, January 1, 2014.  In addition to the Annual Open Enrollment Period, you also have from the day after it ends, that is, Sunday, December 8, until Friday, February 28, 2014 to change.  But don’t wait; if you change during the Annual Open Enrollment, or after it ends but in December 2013, you will be in your new plan January 1, 2014, and so will not have a gap in Medicare Advantage coverage.  (Recall that if your plan leaves, you will be put into Original Medicare January 1, 2014 if you don’t opt for a Medicare Advantage plan.)  But if you enroll in a plan in January, you will be put into it effective February 1, 2014; if you enroll in February, you will be enrolled effective March 1, 2014.)

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 in 2013 and in any month in 2014 (except December). You will be enrolled in your new plan on the first of the month following the month in which you enroll.  But, if you have your Part D drug coverage with your current Medicare Advantage plan, and switch to a 5-star one which does not have Part D drug coverage, you will lose your drug coverage, and will not be able to get it back until January 1, 2015.

Finally, and Medicare doesn’t generally “advertise” this (for example, it’s not explained in the Medicare and You booklet), but beneficiaries who are enrolled in “low performing” Medicare Advantage plans will be given the opportunity to enroll in higher quality 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) sent notices in October 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 2014.  They can do this any time after the Open Enrollment and in any month in 2014 (except December).  And they can only make this enrollment by calling the 1-800-MEDICARE number.  But, if you have your Part D drug coverage with your current Medicare Advantage plan, and switch to a better one which does not have Part D drug coverage, you will lose your drug coverage, and will not be able to get it back until January 1, 2015.

And for those of you who want to disenroll from a Medicare Advantage plan, you may drop your plan and go back to Original Medicare anytime between Wednesday, January 1 and Tuesday, February 14, 2014.  If you do this, you can also join a Part D standalone plan if you had your Part D drug coverage with your Medicare Advantage plan, or if you had no Part D coverage at all.  (If you have your drug coverage with a Part D standalone plan instead of your Medicare Advantage plan, you cannot change your Part D plan.)

Part D

For Part D in 2014, again changes are minimal from 2013.  On the whole Part D premiums have increased by only a hair from 2013 (although your current plan may be increasing its significantly). And, in general, beneficiaries will pay less for their drugs in 2014.  As usual, the overall recommended structure has changed somewhat. The recommended deductible is $310, but remember that many plans have none or a smaller deductible than this. The next payment band, the 25% Coinsurance Band, covers the next $2,540 of your drugs, and you pay 25% of this, or $635, while your plan covers $1,905.  Your plan may structure this differently.  In the “donut hole,” also known as the “coverage gap,” in 2014 for brand name drugs, the plan will pay 52.5% of the cost of a drug, and you, the beneficiary, 47.5%. (These figures were the same in 2013.)  And for generic drugs, the government will pay 28% and, you, the beneficiary, 72%. (In 2013 the government paid 21% and the beneficiary, 79%, so you get a better deal.)  The beneficiary will remain in the donut hole until their “drug expenses” total $4,550.  And, finally, in the Catastrophic (or 5% Insurance) Band, which starts when your drug “expenses” reach $4,550, you will pay a minimum of $2.55 for a generic or $6.35 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 28% the government pays on your generics).  Unless otherwise noted, all the amounts for 2014 are lower than the 3013 amounts; this is laid out in greater detail in my posting of October 3.

The structure for “Extra Help” or “Low Income Subsidy” beneficiaries is, of course, different, but these beneficiaries will experience slight decreases in their liabilities.

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 2014.  A recent Kaiser Family Foundation study showed that beneficiaries are reluctant to change their Part D plans and, as a result, the vast majority of them pay more for their drugs that they could.  And the special enrollment periods discussed above (Non-Renewing plans, the 5-Star Quality Rating, and Low-Performing plans) all apply to Part D plans also; the special disenrollment period does not.

And for those of you who have to pay the High Income Part D Premium Surcharge, your monthly surcharge will increase, but quite modestly, ranging from 20 cents a month to $2.70 a month.  The details are in my post of October 3.  But remember, as with the High Income Part B Premium Surcharge discussed above, your surcharge will be based on your 2012 income, and this may put you into a higher or lower bracket, or may put you into or out of having to pay a Part D premium surcharge.

1 comment:

  1. I love to read about your experiences! You write beautifully about this. changeparts !!! I have enjoyed reading your articles. They are very well written. It looks like you spend a large amount of time and effort in writing the blog. I am appreciating your effort.


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