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The health reform law has made some important changes
to Medicare that go into effect in 2012. Whether you’re
approaching age 65 or already enrolled in Medicare, the
annual enrollment period (AEP) for next year’s Medicare
Advantage and prescription drug plans is right around the
corner – and it’s starting a month earlier.
Before 2012 begins, we’ve outlined the six most important
things people on Medicare should know to ensure they pick
the best Medicare Advantage or prescription drug coverage
for their specific needs.
• There are new Medicare annual enrollment dates. Generally,
most Medicare beneficiaries can change a Medicare Advantage
plan or stand-alone Medicare prescription drug plan only
once per year during Medicare’s annual enrollment period (AEP).
The dates for AEP changed this year, and run from Oct. 15 to
Dec. 7 in 2011. And, if you want to switch from a supplement
plan to an Advantage plan, the AEP is a good time to make
that switch.
But, the new AEP does not effect when you can enroll in a
Medicare supplement plan, because these plans have an
initial enrollment period that starts in the first six
months after you enroll in Medicare Part B and are 65 or
older. You can enroll in any supplement plan during that
time and not be declined. But, if you wait until those six
months are over, your application could be declined.
• Make way for baby boomers qualifying for “Original
Medicare” at age 65. This year, baby boomers begin turning
65, which means more people will be enrolling in Medicare
this year than in the past. All of these new enrollees will
put more stress on Medicare enrollment experts. When you
combine this influx of new customers with the new enrollment
dates, people who wait until the last minute could be
putting themselves at risk of running out of time or not
getting the help they need to review their coverage and make
changes, if necessary. It’s a good idea to make a plan and
review your coverage options for 2012 early.
• “Newbies” be aware of deductibles, coinsurance,
out-of-pocket limits and prescription drugs. If you’re new
to Medicare, it’s important to know that both parts of
Original Medicare (A and B) have deductibles. And, the
deductibles are not tied to a calendar year like they are
with traditional health insurance. Instead, they’re tied to
a 90-day benefit period, with some exceptions. The Medicare
Part B benefit also includes coinsurance after you meet your
deductible. With coinsurance, Medicare pays a percentage of
each bill (typically between 20 percent and 45 percent
depending on the service) and you pay the rest. Original
Medicare also has no limits on the amount you could pay out
of your own pocket for covered medical services each year.
And, Original Medicare does not cover the cost of most
prescription drugs.
• It’s critical to compare drug coverage: A 2011
PlanPrescriber.com report looked at 25,000 user sessions
on its website during the 2011 annual enrollment period
(between Nov. 15, 2010, and Dec 31, 2010), where customers
entered their zip code, their existing Medicare prescription
drug plan or Medicare Advantage drug plan and the names,
dosages and frequency of any prescription drugs they were
taking, if any. The site’s prescription drug plan comparison
tool found that, on average, a user could save more than
$500 per year – more than $40 per month - by reviewing their
options and changing their prescription drug plan. Don’t
miss this important step heading into 2012.
• You can fill in Medicare’s gaps: People concerned about
some of the gaps in original Medicare have the option to
enroll in insurance products regulated by the government but
provided by private companies. These are products designed
specifically to fill some of the different gaps in Medicare.
They include: Medicare Part D stand-alone prescription drug
plans, which cover the cost of most prescription drugs;
Medicare supplement plans, which cover portions of the
deductibles, coinsurance and out-of-pocket costs not covered
by original Medicare; and Medicare Advantage plans, which
bundle together the Part D drug benefit with some additional
coverage for deductibles, coinsurance and out-of-pocket
costs. Each type of supplemental coverage has different
guidelines for when you can enroll, change and cancel your
coverage.
• Get “star power” in 2012. The Affordable Care Act (health
reform) requires a star rating system to be used for
Medicare Advantage plans, beginning in 2012. Plans get a
rating of 1 to 5, with a 5-star rating equating to an
“Excellent Performance,” and a 1-star rating equating to a
“Poor Performance.” According to the Kaiser Family
Foundation, in 2011 out of 523 plans nationwide, only three
received an overall rating of 5, and 74 received an overall
rating 4 or 4.5 stars. Heading into 2012 the hope is that
more plans will achieve this high 5-star rating. If you’re
lucky enough to have access to a 5-star plan, consider it as
an option for your coverage. One benefit of a 5-star plan is
that you can enroll in it any time, even outside of
Medicare’s annual enrollment period.
About the Author
Ross Blair is President and CEO of Plan Prescriber, Inc. (www.PlanPrescriber.com),
a leading provider of comparison tools and educational
materials for Medicare-related insurance products.
The Centers for Medicare and Medicaid Services (CMS) has
neither reviewed nor endorsed the information provided by
PlanPrescriber.
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