"Healthcare costs are a critical line item in most people's budget, and especially so for seniors and people with disabilities"
There are only a few weeks before the Medicare annual open enrollment period begins Oct. 15. This year's Medicare season crosses calendars with the roll-out of the Health Insurance Marketplace, so it's important Medicare-eligible beneficiaries understand the differences between the two government programs, according to Allsup, a nationwide provider of Medicare plan selection services.
During the Medicare annual enrollment period, Oct. 15 to Dec. 7, all Medicare beneficiaries have the option to change their Medicare plans for the coming year to better match their needs. This includes anyone using original Medicare, Medicare Advantage or Part D prescription drug plans.
"Because the federal and state-run health insurance exchanges open for business just two weeks prior to Medicare enrollment, some people may be confused," said Paula Muschler, manager of the Allsup Medicare Adviser®, a Medicare plan selection service offering personalized help that includes customized research and enrollment assistance.
"Medicare beneficiaries may falsely think they need to enroll in an exchange plan to avoid penalties. Or, they may be so flustered that they don't carefully evaluate their Medicare plan options for 2014, which could be detrimental if their plan or their needs have changed," Muschler said.
Another potential area of confusion is for those individuals turning 65 during Medicare annual enrollment. "Because some seniors become Medicare eligible during this time period, they need to look at their Medicare selections for coverage that takes them through year-end 2013, as well as coverage that will begin Jan. 1, 2014," Muschler said. "These first-time enrollees can benefit from the help of a Medicare specialist like Allsup when it comes to navigating their Medicare plan decisions."
What to Expect: Medicare Coverage 2014
Nearly 50 million people are enrolled in Medicare. Each year, annual open enrollment brings with it changes that can affect their Medicare plan selections.
Following are factors to keep in mind for 2014 coverage:
Medicare is not part of the Health Insurance Marketplace. Anyone with Medicare is considered covered and won't face penalties for being uninsured under provisions of the Affordable Care Act (ACA). Medicare annual open enrollment runs Oct. 15 to Dec. 7. (Note: Health Insurance Marketplace enrollment is from Oct. 1, 2013, through March 31, 2014, according to the U.S. Department of Health & Human Services (HHS).)
Medicare recipients reaching the drug donut hole will benefit from lower costs. The gap in prescription drug coverage starts when someone reaches the initial coverage limit, estimated at $2,850 in 2014. It ends when they have spent $4,550, when catastrophic coverage begins. (These are reductions of $120 and $200, respectively, from 2013.) During the donut hole, all costs are covered by individuals out of their own pocket. In 2014, those who reach the donut hole can receive a 52.5 percent discount on brand-name drugs and 28 percent discount on generic drugs (an increase from 21 percent in 2013).
Under catastrophic coverage, they are responsible for a co-pay of $2.55 for generic or preferred multi-source drugs (down from $2.65 in 2013) with a retail price up to $51 and $6.35 for all other drugs (down from $6.60 in 2013) with a retail price up to $127. For 2014, however, beneficiaries are responsible for a 5 percent cost-sharing fee for drugs over those retail prices.
Medicare Part B premium changes are expectedIn each of the past three years, Part B premiums have increased. The 2013 monthly premium for Medicare Part B (medical insurance) was $104.90, an increase from $99.90 in 2012. In addition, because Part B premiums are based on the beneficiary's income and those income levels are frozen at 2010 levels, more individuals could see their premiums change. Information on the standard Part B premium for 2014 should be available by the time Medicare annual open enrollment begins Oct. 15.
Prescription drug Part D plans will see slight changes in deductible and premiums
The Part D initial deductible decreases by $15 to $310. HHS also recently reported the Part D monthly premiums will remain relatively stable, at $31 for a basic prescription drug plan in 2014. This is close to the reported average premium of $30 for the past three years (2011-13). Part D premiums are subject to the same income-based thresholds as Part B.
Changes anticipated for Medicare Advantage plans
Not all plans change every year, but common changes include costs, such as premiums, deductibles and co-pays, and changes to covered procedures, tests, medical facilities and other provisions. Some plans may be eliminated, which means beneficiaries will need to select a new plan or default to original Medicare Part B. Enrollment in Medicare Advantage plans continues to grow with 14.4 million people enrolled, an increase of more than 1 million from 2012, according to the Kaiser Family Foundation.
Most Medicare participants will receive their Annual Notice of Change (ANOC) and Evidence of Coverage (EO) from their current Medicare Advantage and Part D providers by Sept. 30, according to Muschler. "It's crucial people review materials as soon as they receive them and asses their current healthcare needs," she said.
"Healthcare costs are a critical line item in most people's budget, and especially so for seniors and people with disabilities," Muschler added. "Believing your current plan will continue to cover your needs in the same way can lead to unexpected and costly surprises."
Medicare specialists such as Allsup are available to help consumers and their family members review Medicare plans and choices for 2014 coverage, Muschler added.
"For many people, this can be a time-consuming, confusing and complex evaluation process, especially when comparing Part D plans or Medicare Advantage plans," Muschler said. "Many Medicare beneficiaries are pleased to find out there are Medicare specialists like Allsup who look at the comparative details of the plans, and then provide them the assistance they need to make choices that suit their needs and budget in the coming year."
The Allsup Medicare Adviser is an affordable, flat-fee based service for Medicare-eligible individuals.
For an evaluation of Medicare options, call an Allsup Medicare Adviser specialist at (866) 521-7655 or visit Medicare.Allsup.com to learn more about the service.
The Allsup Medicare Adviser also has features that help financial advisers guide their clients to the Medicare plans that match their specific lifestyles and healthcare needs. Employers also use Allsup Medicare Adviser for their employees who are retiring and transitioning to Medicare. For more information, go to FinancialAdvisor.Allsup.com, or call (888) 220-9678.
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