By Mark Miller
Tribune Media Services
Every year around this time, I remind seniors that it's important to re-shop Medicare prescription drug and managed care programs during the enrollment season, when seniors can change their Medicare coverage.
This year, it's important to get started on that process earlier than usual-because the enrollment period is earlier this year.
The 2010 health reform law moved up the annual enrollment period by several weeks, starting this year.
Enrollment will be open from Oct. 15 to Dec. 7-a sensible move intended to get this time-consuming chore away from the busy holiday season.
Re-shopping your plan annually makes sense-especially Medicare Part D drug plans, where insurance companies often change their offerings year-to-year in ways that can increase drug costs by thousands of dollars, or make it more difficult to get certain drugs. At the same time, your drug needs may have changed since the last plan selection period in ways that make a plan less beneficial for you.
You've got two basic choices: traditional, fee-for-service Medicare alongside a stand-alone Part D prescription drug plan, or a privately managed Medicare Advantage all-in-one option (including hospitalization, outpatient services, and prescription drugs).
You're free to make as many changes as you want before Dec. 7; your changes take effect on Jan. 1, 2012. There's also a dis-enrollment period that runs from Jan. 1 to Feb. 14, 2012, which can be used by seniors who pick an Advantage plan but want to change their minds. During that period, you can switch back to traditional Medicare but not to a different Advantage plan. And, if you do leave Advantage, you can add a stand-alone drug plan during that period.
The new health-care reform law is reshaping certain parts of the Medicare marketplace-for the most part, in ways that benefit seniors. Avalere Health projects that average premiums for both prescription drug and Advantage plans will fall 4 percent for 2012. But the enhanced competition doesn't mean prices are coming down across the board. Although some of the top 10 drug plans-which cover 77 percent of enrollees-are cutting premium prices, six are raising prices.
“This is a year of change,” says Dan Mendelson, Avalere Health's CEO. “It's a year where patients really need to shop.”
When picking a Medicare D plan, make sure your plan covers the drugs you need. It's important to look closely at plan formularies to understand if your drugs are covered, at what cost, and the co-pays and deductibles involved. Formularies might also feature drug-coverage restrictions, such as requiring direct prior authorization from a physician, which can slow the process, or quantity limits. Some might also require “step therapy”-a situation where your doctor prescribes a drug, but the plan requires that you first try a less expensive option.
The second important consideration: Can you use the pharmacy option that you prefer? Medicare D plans don't work with all pharmacies, and vice versa. Be sure the pharmacy you use is a preferred network pharmacy-or that a different delivery option is acceptable to you.
The health-care reform law gradually closes the notorious “doughnut hole.” This refers to how-for 2012-coverage stops when a beneficiary's annual out-of-pocket drug spending hits $2,930, and it resumes at the “catastrophic” level of $4,700. The doughnut hole is the gap between the stopping and resumption points.
This year, the law requires pharmaceutical companies to provide a 50 percent discount on brand-name drugs to low- and middle-income beneficiaries who find themselves in the doughnut hole, and a 14 percent discount on generic drugs.
Low-income seniors can qualify for significant assistance with prescription drug costs under the “Extra Help” program, which subsidies premiums. Single people must have income below $16,335 and total financial resources less than $12,640; married people qualify if they have income below $22,065 and resources less than $25,260.
Mark Miller is the author of "The Hard Times Guide to Retirement Security." He publishes http://retirementrevised.com, recently named the best retirement planning site on the web by Money Magazine. Contact him with questions and comments at firstname.lastname@example.org