On Medicare? Time to Pay Attention
More than 5 million Californians get their health insurance from Medicare, the federal health insurance program for people 65 and over, and for people under 65 who have certain disabilities.
There’s a lot going on with Medicare right now. Premiums will rise next year for about one-third of its Part B enrollees. (I’ll help you decipher some of Medicare’s alphabet soup below.)
And premiums will increase for other Medicare coverage, such as some prescription drug plans.
“The standalone prescription drug plans will have the most dramatic changes next year,” says Margaret Reilly, program manager for a Medicare counseling service in Northern California.
Now through Dec. 7 is a critical time for many of you with Medicare because it’s open-enrollment season. I’ll provide some tips on what to look out for.
Part B is known as the “medical insurance” portion of Medicare, and helps pay for outpatient medical care such as doctor visits, lab tests and durable medical equipment.
Next year, about 30 percent of Part B enrollees will pay $121.80 (or more) instead of $104.90.
Here’s who will pay the higher premiums:
- People who are dually eligible for Medicare and Medicaid (called Medi-Cal in California). But Medicaid pays their premium – and the increase – on their behalf.
- Medicare beneficiaries who made more than $85,000 as an individual or $170,000 as a couple. This group also has to pay a surcharge depending on their income. For example, an individual who made $200,000 would have to pay a total of $316.70 per month.
- New Medicare enrollees in 2016.
- Part B enrollees who are not receiving Social Security benefits.
Medicare Advantage and Part D Open Enrollment
If you have a Medicare Advantage or Part D plan, now’s the time to make changes through Dec. 7. First, a few definitions.
Unlike “Original Medicare,” which is administered by the federal government, Medicare Advantage plans are offered by private companies. Medicare pays them to cover your benefits. In addition to your monthly Medicare premium, you may need to pay a premium for your Medicare Advantage plan.
They usually include prescription drug coverage.
Part D plans allow you to add prescription drug benefits primarily to Original Medicare.
If you already have a Medicare Advantage or Part D plan and don’t want to explore other options for next year, it could cost you.
Consider that 22 of the 28 standalone Part D plans in California next year will have higher premiums, says Elaine Wong Eakin, executive director of California Health Advocates, a Medicare advocacy and education group.
The premium hikes range from 90 cents per month to – gulp – $98.70, she says. Five plans will have premium reductions and one stays the same.
To find out what’s happening to your plan’s premium, look at your “Annual Notice of Change,” which you should have received in the mail earlier this fall. (If you didn’t receive it, call your plan.)
This document also should include the plan’s drug formulary, which can add or drop medications from year to year.
“If the drugs you take this year are not going to be on next year’s formulary, you want to know that,” Reilly says.
Unfortunately, the formularies can be difficult to navigate, she says, so you can also call 1-800-MEDICARE with a list of your medications, and a customer service rep can help you.
Another option is to go to the Medicare.gov website. From the home page, click on the “Find health & drug plans” link. You’ll be able to enter the names of your drugs, as well as the dosage and frequency. In return, you’ll be told which Part D plans cover your medications most economically, Reilly says.
Dental and Vision
Original Medicare does not cover most dental care, including dentures. It also doesn’t cover eye exams related to prescription glasses.
Some Medicare Advantage plans may offer limited vision and dental coverage, but it may cost you extra. Check with your plan.
If you want these benefits and have Original Medicare, or don’t get them from your Medicare Advantage plan, you’ll need to buy a standalone dental or vision plan.
Which can be expensive. “There are very limited options for people on Medicare,” says Jeff Album, a vice president at Delta Dental, California’s largest dental insurer.
Album offers some tips for Medicare beneficiaries looking for dental coverage:
- If you’re eligible for AARP, then you’re also eligible for the dental insurance products it sells (including Delta Dental). Call 866-583-2085 for more information.
- Costco sells a Delta Dental plan to its members.
- You can search for dental insurance and discount dental plans on Dentalplans.com.
You can enroll in standalone dental plans any time of year, Album says, but you often have to commit to the plan for a year and/or face a one-year waiting period for some major services.
Part B Open Enrollment
Most people sign up for Medicare Part A (known as the “hospital insurance” portion) when they turn 65 because it’s usually free.
But not everyone signs up for Part B right away because some may have job-based insurance. Others don’t want to pay the Part B premium.
If you’re over 65 and have job-based insurance, you can sign up for Part B without penalty when you retire or otherwise lose your (or your spouse’s) employer-sponsored coverage. (There are some different rules for people who work for small businesses with fewer than 20 employees.)
But if you didn’t have insurance and elected not to sign up at age 65, you get dinged for waiting. You have to pay a premium penalty for every year you delayed enrolling, you can only sign up for Part B from January through March each year, and your coverage won’t be effective until July 1 that same year.
(By the way, there are late enrollment penalties for Part D as well.)
The point is to discourage people from waiting until they’re sick to enroll.
“Sometimes people will say, ‘I don’t want to spend the money. I’m not sick’,” Reilly says. “But when they need it, they find out the effective date isn’t until July 1.”
Tom Freker, an insurance broker in Fountain Valley, came across two women this year who have cancer, but neither had signed up for Part B when they were originally eligible.
They plan on enrolling in January. While they wait for their coverage to kick in, he says, they’re trying to get as much of their cancer treatment covered by Part A as possible.
Unfortunately, they face major out-of-pocket expenses. “This is costly,” he warns. “It can be a real crusher.”
If you’re someone in this category who needs advice, or if you have other Medicare questions, there’s free, one-on-one Medicare counseling available through the Health Insurance Counseling and Advocacy Program, or HICAP. Visit the California Health Advocates website at www.cahealthadvocates.org or call 800-434-0222 to find HICAP offices in your county.
HICAP appointments can be hard to get during open enrollment. You can also call 1-800-MEDICARE for help.
Click here to find previous Ask Emily columns.