The Medicare Open Enrollment period is here. Through December 7th, Medicare recipients are able to change from Original Medicare (administered by the federal government) to a Medicare Advantage Plan (administered by a private insurance company) or vice versa, switch from one Medicare Advantage Plan to another Medicare Advantage Plan, or join/change a Medicare Prescription Drug Plan.
Although you may be satisfied with your current Medicare plan, Medicare may make annual changes to your costs, benefits, drug formulary, or provider network. To obtain the coverage you desire from the health care professionals and pharmacies you trust, at the most affordable price, it is important to review your Medicare health and drug plans each year during the Medicare Open Enrollment period.
Whether or not Original Medicare or a Medicare Advantage Plan is a better option depends upon your individual circumstances.
Original Medicare is generally easier to use with regard to visiting providers since you do not have to worry about networks. You may visit any provider who accepts Medicare. Medicare Advantage plans usually have a list of designated providers, and if you go out-of-network, your costs will be higher.
Based on our experience at Keystone, another plus for Original Medicare is the process involving rehabilitation in a nursing home following a hospitalization. Therapy and additional supportive care can be provided in a nursing home under both Original Medicare and Medicare Advantage Plan guidelines.
Under Original Medicare, the facility staff who are caring for the patient make decisions regarding the length and appropriateness of rehabilitation services. Under Medicare Advantage Plans, approval for initial and continuing services is granted by a representative of the insurance company. This process requires additional paperwork, takes time away from treating patients, and leaves families/facilities with uncertainty about potential liability for costs and a timeline for discharge planning.
Comparing costs becomes somewhat more complicated. Under Original Medicare, the monthly premium for Part A (hospital coverage) is usually free but deductibles and coinsurance may apply. The Part B Premium (coverage for outpatient services) is the same for everyone. The current Part B premium is $135.50. This premium is projected to increase to $144.30 in 2020. The Part B deductible, currently $185, is projected to increase to $197.
When care is received, Original Medicare pays 80% of most service costs and the older adult pays the remaining 20%, with no annual cap on these payments. Prescription drugs are not covered under Parts A and B, so a third plan (Part D) is needed for medications.
Medigap plans are available to help pay some of the out-of-pocket costs for individuals covered by Original Medicare. These plans may be more difficult or more expensive to purchase after an individual’s initial enrollment in Medicare. Premiums for Part D and Medigap plans vary. Medigap plans are not available to those participating in a Medicare Advantage plan.
The government contracts with insurance companies to provide Medicare Advantage Plans in every state. The types of plans which are offered and the rates associated with each plan (premiums, deductibles, and coinsurance) vary by location, and are set by the insurance companies. These companies can only change their rates on January 1st of each year.
Medicare Advantage Plans often provide drug coverage as part of their contract, and sometimes offer supplemental coverage for services such as vision, hearing, and dental (which are not covered under Original Medicare). In addition, out of pocket costs have an annual limit in an Advantage Plan.
Some new regulations to both Original Medicare and Medicare Advantage plans are coming in 2020.
Part D plans of Original Medicare will no longer have a coverage gap, previously known as the “donut hole”. However, in order to qualify for catastrophic coverage for drugs, (in which enrollees pay only 5% of the cost of medications), the out-of-pocket spending limit is increasing from $5100 to $6,350.
Another change to Part D plans is that although a drug may be included on a particular plan’s formulary, the plan may limit which diagnoses qualify for payment for use of that drug. Previously, if a drug was included, all FDA approved uses for that drug were eligible for payment.
Medigap plans also have some new rules. Medigap plans are named by letters, and each letter has standardized benefits, although premiums may vary within plans of the same letter. One of the benefits in Plans C and F is coverage of the Part B premium. These two plans will no longer be available for those people who qualify for Medicare beginning January 1, 2020. If you already have plan C or F you may keep it, and if you are already enrolled in Medicare but have a different Medigap plan, you may still purchase one of these two plans in the future, subject to medical underwriting.
Changes to Medicare Advantage plans include the ability to offer benefits for those who are chronically ill which are not directly related to health needs; such as transportation, air purifiers, family caregiver support services, etc. On the other hand, these plans may now vary their benefits and premiums for enrollees who live in the same geographic area but have certain health conditions.
Choosing between Original Medicare and a Medicare Advantage plan, and evaluating options within each plan, can be overwhelming. Identifying your priorities for care and an awareness of the likelihood of future care which may be needed can help you make an economically sensible decision.
Take advantage of the Medicare Open Enrollment period to obtain the best plan for your needs. To compare 2020 plans, visit https://www.medicare.gov/plan-compare/#/?lang=en. For guidance in how to choose a Medicare insurance agent who can research your options, make recommendations, and assist with enrollment, see this article: https://www.usatoday.com/story/money/columnist/powell/2015/11/29/how-do-pick-unbiased-helpful-medicare-adviser/76451114/
Karen Kaslow, RN, BSN