Time is running out for Medicare Open Enrollment, as the opportunity to make changes this fall ends on Dec. 7.
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With the deadline quickly approaching, Aon research shows that 60 percent of seniors are overwhelmed at the amount of information about Medicare health insurance. With plan designs, premiums and networks changing each year, it is important that you do your homework and review your needs for health insurance. Don’t bury your head in the sand.
Robert Quinlan, managing member of Quinlan Care LLC located in New Windsor, NY, reviewed the basics of Medicare with Fox Business, and broke down what you need to know to ensure your health needs will be covered in 2018.
Boomer: Can you give us a quick review on the basics of Medicare and the difference between Original Medicare and Medicare Advantage plans?
Quinlan: Medicare is a federal insurance program that covers many of the medical expenses for people who turn age 65. Other groups are also covered. You are eligible for Medicare (even if you are under age 65) when you are receiving Social Security disability benefits after two years of benefits or if you have end stage renal failure (kidney failure). Medicare offers two alternative choices. One choice is to enroll in Original Medicare Part A and Medicare Part B. Medicare Part A will pay for many (but not all) of your expenses while in a hospital and limited coverage for home care or in a skilled nursing facility. Medicare Part B will pay 80% for your doctor visits and many of your preventive care services, tests and X-rays and outpatient services.
You may wish to purchase a Medicare supplement policy to cover your out of pocket expenses found in Medicare Parts A and B. There are no provider networks in the Original Medicare Part A and B option. You can see any provider (medical doctor and/or hospital) in the US that accepts Medicare payments.
You will also need prescription drug coverage so you can enroll in a drug plan found under Medicare Part D.
The other alternative path is called Medicare Advantage Plans. These private insurance plans (examples include the HMO or PPO) combine Medicare Part A and B with additional benefits that you may not receive from Original Medicare. It largely offers the same services found in Medicare Parts A and B with extra coverages for services like prescription drugs, vision, dental or even gym membership. Each carrier decides which extra services to offer.
To enroll in a Medicare Advantage plan, you must be enrolled in Medicare Parts A and B. While the monthly premiums for these plans may be lower than regular health insurance for those under age 65 or even at zero premium, your annual out of pocket expenses may be higher (like $5,500) if you have lots of medical bills in one year. After you have reached this annual out of pocket limit, you pay nothing. You also want to check to make sure that your doctors and hospital(s) are in your plan’s network to get lower co-payments.
Important to note: if you enroll late in Medicare Parts B and D with no comparable coverages elsewhere (i.e. an employer sponsored plan benefits), you may face a monthly penalty for the rest of your life when you do enter the Medicare program at a later time.
Also note that you may not need to enroll in Medicare Parts B and D plans if you are covered by an employer sponsored health insurance plan as an active employee past age 64 or a retiree who maintains health insurance from a former employer.
Boomer: If I am happy with my coverages, do I need to do anything for this fall’s open enrollment period that ends on December 7, 2017?
Quinlan: If you are happy with your current Medicare coverage and have made sure that your doctors and hospitals are covered in Medicare Advantage Plan or will accept payments under the Original Medicare Parts A and B in 2018, you can relax and do nothing.
Boomer: What will be the premium for Medicare Part B in 2018? Is Medicare Part A premium free? Are there any other changes we should be aware of for next year?
Quinlan: Start with the good news. There is no monthly premium for Medicare Part A for most working Americans. Your monthly premium for Medicare Part B is based on your annual income. The 2018 standard monthly premium will be $134, the same as in 2017. However, some people who were paying $109 monthly (under a provision called “hold harmless” in 2017) will now face an increase to $134 monthly in 2018. Top tier earners in 2018 could pay as much as $428.60 per month. There is also a surcharge for higher earners for their Part D prescription drug premium. The Part B deductible will be $183 in 2018, the same annual deductible as last year.
The gap in the Medicare Part D prescription drug plan coverage (the “donut hole”) is steadily closing and will end completely by 2020. The gap will start at $3,750 and ends when you spent $5,000 in 2018.
Boomer: What are the Medicare Stars ratings and where can we find them?
Quinlan: The Center for Medicare and Medicaid (CMS) that governs Medicare uses a Star Rating system to measure how well Medicare Advantage plans and stand-alone Medicare Plan D plans measure up to categories like customer service, pricing member, complaints and the array of services that each carrier offers. The rating range from one star to five stars with one star the lowest (poor) and five stars (excellent) the best. Carriers with three stars or higher will receive a bonus from CMS. You can find the carriers’ Star ratings in their printed materials and on Medicare’s web site at www.Medicare.gov.
Boomer: When is Medicare going to begin to issue a new Medicare enrollment card to me without my Social Security number on it?
Quinlan: Medicare will begin to mail out the new Medicare cards beginning in April, 2018 with new unique numbers to minimize identity theft and fraud prone Social Security numbers. All Medicare beneficiaries are expected to have the new cards by April, 2019. You can continue to use your current card until the new one arrives. Destroy your old one carefully when the new card arrives.