Every Year individuals who are on Medicare plans have an option to change their plan during the Annual Enrollment Period from October 15 - December 7th. Medicare beneficiaries can make changes to their plan and their new plan will be effective January 1. Each Medicare beneficiary will receive a letter from their current carrier in September, called the Annual Notice of Change. It is important that people review these to make sure their plan is still the best plan for their needs. Just like Employees review their benefits each year, individuals on Medicare plans should do the same.
Do you have to enroll in Medicare when you reach 65?
It depends. If you need health insurance and are not collecting Social Security, you should enroll. If you need health insurance and are collecting Social Security, you will be automatically enrolled. If you have health insurance through your or your spouse’s Employer plan, you do not need to enroll until you are no longer employed or no longer have health insurance.
Do I have to collect Social Security if I am enrolling in Medicare?
No. You do not have to collect Social Security in order to apply for Medicare. Many individuals wait until full retirement age to start collecting Social Security and may apply for Medicare if they need health insurance before full retirement age.
I hear about penalties with Medicare, how do I avoid paying any penalties?
It is important that you apply for Medicare when you are first eligible in order to not have to pay any penalties. The Medicare and You handbook explains all the rules of when and how to apply. You can download the book from the www.medicare.gov website. You can also call 1-800-Medicare for answers. They are a great resource.
What if you are still working and have health insurance at work, do I have to do anything?
If you are not collecting Social Security, you do not have to apply for Medicare if you get your health insurance from your or your spouse’s Employer. Some people choose to apply for Medicare part A as there is no cost for this benefit and can help with some Employers high deductible health plans. (This is not recommended if your Employer offers a Health Saving Account.) If you are collecting Social Security, you will be automatically enrolled in Medicare Parts A&B the month you are turning 65. You will need to notify Social Security that you do not need Part B.
Do I really need to read the Annual Notice of Change that the insurance carriers send?
Yes. It is important that you understand the changes to your plan from one year to the next. If you are comfortable with the changes, you do not need to do anything to stay on your plan. If you are not comfortable with the changes, you should review other options that may be available to you.
Why is there an Annual enrollment period? What can I do?
There is an Annual Enrollment Period to give Medicare beneficiaries an opportunity to change from their Medicare Advantage or Prescription Drug Plan to another plan. During this period from October 15 – December 7th, individuals can change from one plan to another, with the new change effective January 1.
What should I look for in choosing a plan?
Look at how your prescriptions are covered, are all of your doctors in the network, do you live part of the year in another state, what is the cost of the plan (cost includes premium, deductibles and co-pays.) You should look at all of these items before making a decision.
What are drug formularies and tiers?
Medicare has its standard drug formulary that any insurance company that offers MAPD or PDP plans must include. It is up to the insurance company to determine in which tier to put a drug. The higher the tier number, the more expensive the co-pay will be. Typically, Tier 1 is preferred generics; Tier 2 is non-preferred generics, Tier 3 is preferred Brand, and Tier 4 is non-preferred Brand. Your prescription could be in a different Tier with different insurance companies. It is important that you understand which Tier your prescriptions are in before making a decision.
Should someone enroll in a prescription drug plan if they do not take any prescriptions?
If a Medicare beneficiary does not apply for a prescription drug plan when they are first eligible, there may be financial and time period penalties that a consumer will have to pay. If you are currently not taking any prescriptions, it does not mean that tomorrow you may not be taking a new expensive prescription. It is important to have the prescription drug plan in place for when you need the coverage.
What is this doughnut hole (coverage gap) I hear about?
In all Medicare plans that cover prescription drugs there is a coverage gap that is sometimes called the doughnut hole. (There is a hole or gap in your coverage.) Once the retail prices of a beneficiary’s prescriptions total $3,750, they will go into the coverage gap until their total out of pocket is $5,000. During the coverage gap, you are responsible for 35% of the retail price for Brand name drugs and 44% of the cost of generic drugs. This is the percentage in 2018. The percentages will continue going down until the year 2020, where the co-insurance will be 25%.
How do networks work?
HMO plans require that you only see doctors that are in that plan’s network. If you see a doctor that is not in network for a Medicare Advantage plan, you will be responsible for the entire cost of the visit. If you are currently seeing a doctor under your current plan, do not assume that your doctor is on the same carrier’s Medicare plan network. Carriers can have different networks for individual plans, group plans, and Medicare plans. Always confirm your doctors are in the carriers’ network.
Can I go to any pharmacy?
Many plans are now starting to give discounts if you receive your prescriptions from the carrier’s preferred pharmacy. You can save money on your prescriptions if you fill your prescriptions at the carrier’s preferred pharmacy. Sometimes there are additional savings if you receive a 3-month prescription from the carrier’s mail order company.