Medicare recipients are facing more choices than ever before this Annual Enrollment Period (AEP) as carriers roll out plans with rich benefits, zero dollar premiums, and even reimbursements on Part B premiums.  So how should you narrow down the many options?  Here are some things to look for when contemplating a plan change.

  1. Look beyond the gimmicks.  A plan might have a lot of benefits, but if your doctor isn’t in the network, or if the network is so skinny you will have trouble finding providers, it might not be worth all the “extras”.
  2. Look at your ANOC, Annual Notice of Changes, to see if your plan is still the best one for you. If your premium or deductible is going up or your out-of-pocket maximum, you might consider a change.  Also, look at benefit changes.  Did your copays and coinsurance increase?  Are your medications still covered in the plan’s formulary? 
  3. Plans change networks frequently, so make sure your doctor is still in the plan’s network.  Also, look at any specialists you’ve been seeing to make sure they’re still in network as well.  Remember, if you go out of network, with most Advantage Plans, you will not be covered.
  4. Some plans have special features like low-cost insulin for people with diabetes.  These plans cap insulin costs at $35 or lower.  There are also plans now for those with End Stage Renal Disease that will help cover the cost of dialysis and plans for those with chronic medical conditions like heart disease.  If you have any of these conditions, these plans would be worth a look.
  5. There are also rich plans for those on Medicare and Medicaid.  These plans help coordinate care, give you extra benefits, like transportation to and from doctors’ appointments and meals after a hospital stay, and make it easier to find providers that accept both Medicare and Medicaid.
  6. Not all plans are available in all areas.  Plans are divided into service areas (usually a county) so they are specific to that region.  Make sure you are looking at plans in your area when comparing benefits, pricing, and provider networks.

If you have made the decision that you want to go with a Supplemental Plan to help cover the gaps in Medicare rather than an Advantage Plan, how do you narrow down your choices to get the plan that best fits your needs? Here is some information that might help.

There are ten basic supplemental plans you can choose from lettered A, B, C, D, F, G, K, L, M and N.   The ones that are going to give you the most coverage are F, G and C.  To get an F or C plan, you must have been eligible for Medicare before January 1, 2020.  Plan G has the same benefits as the F plan, except that you have to pay the Part B annual deductible of $203. Plan G also has the same benefits as the C plan, except you must pay for Part B excess charges (up to 15% more for doctors who are not on assignment with Medicare’s fee schedule).  All the supplemental plans are standardized, which means they have all the same basic medical benefits regardless of carrier.  Some F and G plans have extra benefits added, like vision and hearing, and some F and G plans have a high deductible version of the plan.  What differs among these plans is the premium.  Each company charges a different rate for each plan. Price is determined by the age you will be on the plan’s effective date and the location where you live. 

Another factor that influences cost is the type of plan you choose.  The plans with the most benefits are going to cost more than a plan with fewer benefits.  The F plan will be the most expensive with the most benefits, followed by the G and C plans, then D, A and B.  Lower cost plans like K and L have an out-of-pocket limit which you must meet before the plan pays 100% of costs.  Plan M pays only 50% of the Part A deductible, and the N plan has copayments for office and emergency room visits.   Some companies give first-year introductory discounts of up to $30 off your monthly premium, as well as household discounts of up to 5 to 7% for members of a family who have the same plan.

If you decide you can live without some of the benefits and pay out-of-pocket costs yourself, you may save on up-front premium costs if you decide to go with a lower-level supplemental plan.  All the plans are going to give you one of the most coveted benefits of all, however, which is the freedom to go to any doctor that takes Medicare with no referrals to see specialists, anywhere in the United States.  Most people choose a supplemental plan for that one reason, because they don’t have to worry about networks and referrals when selecting a provider for their healthcare.

The Low Income Subsidy (LIS) federal program helps Medicare Part D beneficiaries pay for costs associated with their Part D prescription drug plan.  To be eligible to participate in the program, the insured must meet certain asset and income levels which can change yearly, and they must also have Medicare Parts A & B.  Part D plan premiums can be covered from 25 to 100 percent, depending on where the recipient falls on the Federal Poverty Level (FPL).   For 2021, yearly gross income limits in California are $19,560 for individuals and $26,370 for married couples. 

Full-benefit dual eligible, those who receive Supplemental Security Income, and those enrolled in a Medicare Savings Plan automatically qualify for the program.  Late enrollment penalties may also be reduced or eliminated once enrolled.  Consumers who become eligible for LIS have a Special Election Period to enroll which may be used once per quarter from January through September.

Debate about controlling drug pricing is on the legislative agenda as Democrats weigh whether to include it in the new infrastructure package.  The debate about allowing the government to negotiate drug prices, which was largely derailed by the pandemic, was brought back to life by one of Big Pharma’s most vocal critics, Senator Bernie Sanders.  Senator Sanders scheduled a hearing in the new Congress on drug pricing, which got the attention of Pharma industry lobbyists who oppose the measure.

Democrats are looking at H.R. 3, the bill introduced by Elijah E. Cummings that passed the house in late 2019 but never made it to the Senate.  The Lower Drug Cost Now Act, as the bill was called, would have allowed the Secretary of Health and Human Services to negotiate the price on expensive medications that don’t have generic alternatives.  It would also have capped out-of-pocket cost Part D beneficiaries would pay yearly for prescription medications at $2,000.00.  Further measures would have mandated rebates by drug manufacturers that raised prices more than the rate of inflation.

With the Democratic majority in both houses, there is a chance the bill, or one similar to it, could be passed despite the pharmaceutical industry’s opposition to what they see as price controls that would limit future research and development.

One of the largest relief packages in U.S. history, the American Rescue Plan Act of 2021, gives about $34 billion to aid Americans in buying health insurance.  The provisions in the bill do expire in two years, however, there may be a push by Democrats down the road to make them permanent.

Among the biggest winners in President Biden’s $1.9 trillion COVID relief package are those who buy health insurance on the federal marketplace exchanges, which in California is Covered California.  The bill includes a provision that caps what an insured would pay for premiums on the exchange to 8.5 percent of income.  It also provides for those who find themselves unemployed due the pandemic, allowing them to buy health insurance on the exchanges even though they are receiving unemployment benefits, which typically excludes them from getting subsidies. 

Another key aspect of the bill addresses those who are on COBRA, the program that allows workers to buy coverage offered by their former employer.  The bill would pay 100 percent of the COBRA premiums from April 1, 2021 to September 30, 2021.  The bill also includes incentives for states that did not expand Medicaid to do so, allowing more people to qualify for help from the federal aid program.

     Medicare can be very confusing for those newly eligible, and often I see the same issues coming up for those who are trying to navigate the Medicare maze.  Here are few points to try and help clarify the process.

     Many confuse the Parts of Medicare with the various Supplemental Plans available to them to fill the gaps in Medicare.  The reason is that some of the Supplemental Plans have the same letter name as parts of Medicare.  You have Parts A, B, and C with Medicare, but these are also names of Supplemental Plans that go with Medicare.  Basically, Medicare has Part A – Hospital Coverage, Part B – Medical or Doctors’ Coverage, Part C – Medicare Advantage Plans, and Part D – Prescription Drug Coverage.  You also have Plans A, B and C which are Supplemental Plans that cover the gaps in Medicare.
     A Medicare Advantage Plan is not the same as a Medicare Supplemental Plan. When you sign up for a Medicare Advantage Plan, you are signing up for Part C with Medicare, even though these plans are administered through private insurance companies.  The insurance companies handle all costs associated with your care, but are subsidized by the Medicare program.  These plans are usually HMO’s that require referrals to see specialists, and you must use Network providers in your service area to be covered.  Supplemental Plans are PPO’s with no Network restrictions.  However, you must use providers that take Medicare.
     Cobra is not considered creditable coverage for Medicare.  If you lose your job and are Medicare-eligible, if you go on Cobra, it is not considered creditable coverage, which means you could be charged a penalty on your Medicare Part B and Part D premiums once you do sign up for Medicare. 
     If your employer has 20 or more employees, you can remain on your employee group plan (as well as your dependents) if you are actively working, even though you are eligible for Medicare.  The prominent word here is actively working, which means you cannot be on Cobra or laid-off from work. 
     Higher earners pay more for their Medicare Part B premium and their Medicare Part D premium.  If you make over $88,000 (as a single person) or over $176,000 (as a couple), you will pay more for your Part B and Part D premiums.  It is called IRMMA (Income-Related Monthly Adjusted Amount), and it increases in increments based on income level.

As the Biden Administration works with FEMA to open 100 COVID vaccination sites across the United States, there is still much confusion over who is eligible to get the vaccine and where they go to schedule an appointment. The two federal sites in California that have already opened are located at Oakland-Alameda Colosseum in the Bay area and California State University in Los Angeles.

To find out if you are eligible to receive a vaccination, you can visit the California state site at https://myturn.ca.gov/. Riverside County’s COVID website is https://rivcoph.org/coronavirus. Orange County’s site is https://occovid19.ochealthinfo.com and the San Diego County site is https://www.sandiegocounty.gov/coronavirus.

As well as these county sites, appointments can be made at certain Albertsons, Rite Aid, Ralphs and Pavilions pharmacies. Blue Shield and Kaiser Permanente have been contracted with the state to help manage the vaccine rollout. Those who are eligible currently, according to state guidelines, are those in phase 1A (healthcare workers and long-term care residents) and 1B (those 65 and older, agricultural and food workers, educators and emergency service personnel). The next phase, which includes those 16 to 64 with high-risk underlying conditions is scheduled to open on March 15.

Under the Social Security Act, Medicare premiums are adjusted annually. For 2021, the Part B premium increased from $144.60 to $148.50. The annual deductible for the Part B premium went to $203 from $198, and the Part A deductible rose $76 to $1,484.

It is important to note, that in 2007, the Part B premium became subject to IRMAA or Income Related Monthly Adjustment Amount, which is a surcharge on high earners. In 2021, if you are a single earner with more than $88,000 reported income on your tax returns, you will pay $207.90 for your Part B premium instead of $148.50. If you file jointly with a spouse, the surcharge applies to incomes over $176, 000. The premium is increased in income increments to a high of $504.90 for a single earner making over $500,000 income per year or $750,000 for joint filers. Also, in 2011 as part of the Affordable Care Act, the IRMAA applies to Part D drug plans as well. The monthly amount added to the premium of your drug plan ranges from a low of $12.30 to a high of $77.10 depending on income. The surcharges collected for Parts B & D go directly to Medicare and not to the insurance companies.

Cost-sharing also increased under Part A for daily coinsurance rates for hospital stays. From day 61 to 90, the daily rate is $371, up from $352. From day 91 to 150, the rate goes up to $742 from $704 in 2020. For Skilled Nursing Facility care, the rate rose from day 21 to 100 to $185.50 per day, an increase of $9.50.

Most individuals will receive Medicare Part A at $0 premium because they have worked at least 40 quarters or a spouse can qualify through their husband or wife. For those who have at least 30 quarters, they may buy into Part A at $259, and those who have less than 30 quarters may buy in at the full rate of $471.

If you are among the nearly 68 million Americans covered under Medicare, the federal government has provided access to the COVID-19 vaccine at no cost under the CARES Act implemented in March.  The vaccine will be covered under Medicare Part B, and the annual Part B deductible will not be applied.  This will be the case under Original Medicare, Medicare Advantage Plans and Medicare Cost Plans.

If you have an employer-sponsored or individual plan, in most cases, the vaccine will be covered with no additional copays or coinsurance required of the insured under Section 3203 of the CARES Act.  It will fall into the category of “Preventive Services” as outlined in the Affordable Care Act (ACA) and applies to all non-grandfathered plans. 

Grandfathered plans (health plans in effect prior to March 23, 2010 when the ACA was signed into law) may have some or no cost-sharing depending on the plan, however, individual states may mandate these plans to cover the full cost of the vaccine and its administration.  Other health plans, like short-term and healthcare-sharing ministry plans, may not cover the costs of the COVID-19 vaccine.

If you are on Medicaid, the federal government has provided extra funding to states to cover the vaccine to Medicaid recipients, without requiring them to pay a share of cost.  This will be the case as long as the public health emergency is in effect.  Once it has expired, cost-sharing may be determined based on eligibility level.

With the cost of insulin nearly tripling over the past decade, many Americans with diabetes face difficult decisions when it comes to their health – whether to limit or stop taking their insulin because of the staggering cost.  Seniors on fixed incomes may be even more vulnerable to the dire consequences of not being able to afford their medications. 

In an effort to address the growing problem, the Centers for Medicare and Medicaid have implemented the Senior Savings Model for Part D Drug plans starting in January 2021.  This new model limits copays in the deductible, initial and coverage gap phases for certain brands of insulin to a maximum of $35 per 30-day supply. The cost could even be less, depending on the medication.  These rules apply to both stand-alone Part D drug plans and those imbedded in Advantage plans.  Plans do not have to participate in the new model, and there are a limited number of plans that have opted into the new program. 

In California, the stand-alone Part D plans that have agreed to participate are as follows: AARP Medicare Rx Preferred, Cigna Secure-Extra Rx, Express Scripts Medicare Choice, Express Scripts Medicare Saver, Humana Premier Rx, Mutual of Omaha Rx Premier, WellCare Medicare Rx Value Plus, WellCare Value Script, WellCare Wellness Rx.  Advantage plans participating in the Senior Savings Model vary by county.