Explanation of Medicare Changes
The past 12 months have brought about big changes in the insurance industry and big changes in Medicare. If you are concerned, worried or confused you are not alone. Many people who have Medicare Advantage plans (MAs or if it includes prescription coverage MAPDs) have received letters that their plan is discontinuing on 1/1/2011. Some Medicare Supplement company premiums have gone up as much as 28%. this year. So, if you are on Medicare and do not have group coverage, what should you do from here?
Most importantly, if you have a Medicare Advantage Plan or a MedicareRX plan (Part D); review that plan yearly to see if it meets your needs. Most of the MAPD “Private Fee For Service Plans” (PFFS) are being discontinued. This is due to requirements upon these plans by CMS (Medicare) for 2011. Therefore, if you received a letter from your MA company about their discontinuing your plan, you will need to take some action or you will be put back into original Medicare by default. On the other hand, this letter will bring an array of options – keep this letter, do not throw it away.
Your options include: moving to any Medicare Supplement regardless of your health (you will also need to buy a MedicareRX plan), move to another type of MA plan (may include prescription coverage). What’s best for you? This is where you need to talk with an insurance agent who specializes in Medicare Plans. Some suggest a broker who handles a number of companies would be best so that he/she could recommend the company and plan best for you. Make time to understand the benefits, limitations, exclusions, restrictions and drug formulary within the plan.
The good news is that this writer believes the Medicare Plans have completed their major changes and have stabilized and MA; and MAPD plans will remain a viable option to cut premium costs.
Now, what should you know when you gather information? If you consider a Medicare Supplement consider size and stability of the company, including premium history. Know that with a Med Supp you will most likely also need a MedicareRX plan. Make sure your prescriptions are covered under that plan.
Concerning MA and MAPD plans: first look at your own health and health risk. MA plans have co-pays and co-insurance, meaning you will pay a portion of your doctors, hospital and most other provider costs. If you are using oxygen or have a high likelihood for surgery and hospitalization, you may pay more money out of pocket for an MA than a Med Supp.
Next look at the type of plan (understand the restrictions) and the provider network. If your doctors are not in the provider network, chances are you will not be happy with an MA. Then do the math and consider your risk tolerance when you consider a plan for 2011. Fill in the gaps on each side:
Med Supp | MAPD
Annual premium |
Ann. Part D premium |
Any deductibles |
Doctor copays |
Specialist copays |
Other projected expense |
Total projected out of pocket expense |
In summary: Call your agent. Call a professional agent who specializes in Medicare Plans. Do not wait, 2011 information is available now. You can make changes and enroll in plans 11/15 – 12/31. However, it is wise to complete this process no later than December 15th.