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 Health insurance companies must send an annual notice of changes
for the coming year to Part D prescription drug and Part C Medicare
Advantage plans. The notice, which must be delivered to you by Sept.
30 each year, details changes in premiums and co-pays, and lets you
know whether your medication will be covered in the year ahead.
The notice comes just before the annual plan enrollment period,
which kicks off on Oct. 15 and runs until Dec. 7. It’s your signal
that it’s time to re-shop your coverage.
But a study released last fall by the Henry J. Kaiser Family
Foundation found that, on average, just 13 percent of enrollees
voluntarily switched their drug plans over four recent enrollment
periods. The switching rate is nearly identical for those in
Medicare Advantage plans, the all-in-one managed-care option offered
to Medicare beneficiaries.
That’s unfortunate, since plenty of people are leaving money on the
table. The Kaiser study found that 46 percent of plan switchers
saved at least 5 percent the following year, mainly on premiums.
Seniors who use traditional fee-for-service Medicare need only check
on their drug coverage. Most Medicare Advantage plans wrap in drug
coverage, so enrollees can usually make a single shopping trip
there, too.
Medicare cost inflation has been moderate for several years, and
should remain so in 2015. The average Part D premium will drop from
$39.88 in 2014 to $38.95 next year, according to Avalere Health, a
research and consulting firm.
But a close look at the 10 most popular plans shows why it is
important to evaluate coverage annually. Premium changes will vary
significantly. For example, average premiums for Aetna’s Medicare Rx
Saver plan will fall 31 percent, while WellCare’s Classic plan will
jump 52 percent, on average.
Plenty of low-cost options are available. Five of the top plans will
have premiums under $30, led by Humana/Walmart Rx, which will have
an average premium of $15.67.
“It’s an ongoing pricing game,” says Dan Mendelson, Avalere’s chief
executive officer. “The plans always try to price as low as possible
and below the market and then they are forced to increase premiums.
It means that now, more than ever, people need to go out and shop
and take a careful look at what they are paying.”
Premiums aren’t the only factor to consider. Fewer drug plans will
have zero deductibles next year, Avalere reports. It’s also
important to make sure the drugs you take are covered - and under
what circumstances.
In many cases, the best deals will be offered by plans using
preferred pharmacy networks, so make sure the pharmacy option is
convenient for you, because drugs will be more expensive if you use
non-preferred delivery options.
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Finally, pay attention to how your drugs will be covered if you
enter the “doughnut hole,” the coverage gap that begins after you
and your drug plan have spent a certain amount for covered drugs.
Most plans don’t include gap coverage, and those that do charge
higher premiums. But the size of the gap is being shrunk under a
provision of the Affordable Care Act, and is scheduled to disappear
in 2020.
Next year the gap starts at $2,960 (up from $2,850 this year) and
ends after you’ve spent $4,700 (up from $4,550 this year).
Seniors who enter the gap also get discounts on brand-name and
generic drugs, and those breaks will be larger next year. Enrollees
will pay 45 percent of the cost of brand-name drugs in 2015 (down
from 47.5 percent this year) and 65 percent of the cost of generic
drugs (down from 72 percent this year).
SHOPPING Use the online Medicare Plan Finder tool to find
plans that match your needs. You also can call Medicare
(1-800-Medicare) for assistance with plan selection.
“If you’re not comfortable going online, they can review your
medications and match up plans with you,” says Frederic Riccardi,
director of client services for the Medicare Rights Center, a
nonprofit advocacy group.
Riccardi advises people to purchase plans through Medicare, rather
than going directly to the plan providers. “It creates an
administrative record at Medicare of what you wanted to do, in case
of any problems with your enrollment.”
Free one-on-one help is available from your local State Health
Insurance Assistance Program (SHIP), a network of non-profit
Medicare counseling services.
The Medicare Rights Center also offers free counseling by phone
(1-800-333-4114).
For more from Mark Miller, see http://link.reuters.com/qyk97s
(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance.
Editing by Douglas Royalty)
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