Last year, Marie turned 65 and she retired from work. Since then, she’s felt alive and free. She now enjoys traveling, taking classes, and checking items off her bucket list, including ziplining. One thing has been on her mind, and it’s not her fear of heights. Marie finds anything having to do with Medicare to be extremely confusing and she has been putting off thinking about it for as long as she could.
Marie enrolled in Medicare for the first-time last year and wants to make some changes to her coverage, since she
feels she wasn’t well informed initially. She realizes that she is going to have to pay some attention to it now, since it’s that time of year when people with Medicare review their health insurance choices for the coming year.
If you are enrolled in Medicare — the federal health insurance program for people 65 and older and some younger people with disabilities — you will soon have the opportunity to make changes to your health and prescription drug coverage. Medicare’s Fall Open Enrollment begins next Monday, October 15 and lasts through Friday, December 7.
During Fall Open Enrollment, you will be able to join a new Medicare Advantage plan (from a private company; instead of using Original Medicare) or a standalone prescription drug plan (a Medicare Part D plan). You can also switch between Original Medicare (with or without a Part D plan) and Medicare Advantage. Any changes you make during Fall Open Enrollment will take effect on January 1, 2019.
Marie is not alone. At this time and when we first enroll, many of us find Medicare to be intimidating. There are a lot of options, confusing terminology, and people everywhere trying to sell you something different. People typically have a lot of questions as they research their Medicare options, which primarily include Original Medicare, Medicare Advantage and Medicare Supplement plans, before finding the plan(s) that best fits their needs.
Here are a few of the most commonly asked questions, and answers to help:
I heard Medicare Advantage Premiums will decrease. Is this true?
CMS officially announced a 6% decrease in Medicare Advantage (MA) premiums in 2019 as the result of MA enrollment, health plan options, and benefits increase. CMS stated that the average 2019 MA premium will decrease from $29.81 to $28.00 and improve health plan affordability for most beneficiaries. 83% of MA enrollees are expected to have either the same or a lower premium in 2019. CMS estimates that 46% of MA beneficiaries in their current plan will have a $0 premium.
In addition, Medicare Advantage is offering 600 more health plan options and increasing the average number of MA choices for consumers in 2019. An estimated 3,700 MA health plans will be available in the market next year, with 91% of beneficiaries able to choose from 10 or more plan options. CMS anticipates MA enrollment to increase from 20.2 to 22.6 million enrollees in 2019.
What are the premiums and deductibles for 2019?
You may pay monthly Medicare premiums along with deductibles, co-insurance and co-payments for typical medical services. For 2019, costs are as follows:
Part A: Typically, there is no premium charge for Part A. The annual deductible is $1,340.
Part B: The premium for part B, part of the original Medicare program, is $134 per month, the annual deductible is $183, and there typically is a 20 percent co-pay.
Part C plans: The Medicare Advantage plans charge additional premiums, and co-pays vary.
Part D plans: The prescription drug coverage plans charge additional premiums, and co-pays vary.
I read somewhere that high-income taxpayers will face a new higher tier of IRMAA surcharges beginning in 2019. What is that all about?
Starting in 2019, there will be a new Income Related Monthly Adjustment Amount (IRMAA) tier for Medicare Part B premium surcharges for individuals earning more than $500,000 (or married couples with AGI in excess of $750,000), stacked on top of what were additional adjustments to the Medicare premium surcharge tiers that just took effect in 2018.
Since 2006, the Medicare Modernization Act has required that certain “high-income” individuals pay an IRMAA as a surcharge on their Medicare Part B premiums. In 2018, the surcharge started at an extra $53.50/month, and could rise as high as an extra $294.60/month on Medicare Part B, and applied to those whose (Modified) Adjusted Gross Income exceeded $85,000 (for individuals, or a MAGI above $170,000 for married couples). The end result of these IRMAA surcharges increased the total percentage of Part B costs that are covered by premiums, from 25% (the amount covered by the base $134/month Medicare Part B premium) to as high as 80% (for those paying the full $134 + $294.60 = $428.60/month premium).
Under the Bipartisan Budget Act of 2018, a new additional tier of surcharges was introduced for 2019, at a MAGI threshold of $500,000 for individuals (or $750,000 for married couples). Notably, the threshold for married couples is “only” 150% of the threshold for individuals, introducing an aspect of “marriage penalty” for high-income couples on Medicare. The new tier is intended to lift the Part B premium coverage from 80% to 85% for those high-income earners on Medicare.
Please see this chart for more details:
What does Medicare cover and what does it not cover?
Medicare covers roughly half of all medical and skilled nursing care expenses for an average Medicare enrollee. Some of the items and services Medicare does not cover include:
Long-term care;
Routine dental care;
Dentures;
Cosmetic surgery;
Acupuncture;
Hearing aids; and
Exams for fitting hearing aids (Part B covers diagnostic hearing and balance exams or screenings if ordered to see if you need medical treatment.)
Can I enroll in Medicare at any time?
For your first-time enrollment, usually it is wise to enroll at age 65 if you are not working or do not have health insurance through your employer. Generally, you have a seven-month window around your 65th birthday (three months before and four months after) to enroll.
But if you are working and older than 65, you can enroll within up to eight months of quitting your job. If for some reason you miss your initial enrollment window, you may pay a late penalty of 10% of your premiums. Note that you may also be eligible to enroll because of past work history (at another employer), or you may be eligible because your spouse is eligible.
For existing Medicare beneficiaries, there is an annual open enrollment period of about seven weeks in the fall, as mentioned above. During open enrollment, you can explore any new health and/or drug plans that may fit your health-care needs.
How Can I Get Help with Medicare Open Enrollment?
All of the following can help you comparison shop and complete the enrollment process:
- If you use the Internet, the best tool by far is at www.medicare.gov. Once you’re on the site, click on the green “FIND HEALTH & DRUG PLANS” button.
- If you prefer to do things by phone, call the Medicare help line at 1-800-Medicare. It’s available 24/7 and the sooner you call, the better.
- Visit a local State Health Insurance Assistance Program (SHIP) counselor for free, one-on-one, Medicare assistance.
- Every year, the Center for Medicare & Medicaid Services (CMS) publishes a new Medicare & You handbook. This handbook thoroughly explains the parts of Medicare, what is covered, and how it works. You’ll also come across another book dedicated solely to Medicare Supplement plans: Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.
What do I need to do go get ready?
Assemble the following:
- A list of the drugs you currently take along with dosages
- Your drug store preferences
- Your Medicare card. Your new Medicare card should have arrived in the mail by now. If you didn’t get it, look around the house for any old or unopened mail. Your new Medicare card will come in a plain white envelope from the Department of Health and Human Services. If you still can’t find it, call 1-800-MEDICARE (1-800-633-4227). In the meantime, use your current Medicare card to get health care services.
If I enroll in a new plan, do I have to contact the old plan to cancel?
No, the cancellation is automatic. You will be sent a new card.
I’m in a Medicare Advantage Plan. What do I need to do?
First, look back at your plan from this past year. How did your Medicare Advantage Plan work for you? Did you understand the rules? Are your providers in the network? Did you have a lot of copays? Do you know and agree with any changes to your plan? Most include drug coverage, but make sure you know.
Second, use the Medicare internet tool or help line compare plans. On the Medicare website, Medicare Advantage Plans are called “health plans.” You might want to consider the following:
- Is it HMO? PPO? Make sure you know the difference.
- What is the deductible?
- What are the copays?
- What is the annual out-of-pocket limit?
- How do the drug costs compare?
- What extra services are offered (e.g. YMCA, vision, dental)?
If you see a plan you think you like better, and you want to use certain providers, make sure those providers participate in the plan. Enrollment can be done on-line. Most Medicare Advantage plans offer easy-to-use online tools to help you find doctors and hospitals that are in the plan’s network.
Full information on 2019 Medicare health and prescription drug plans is available on www.medicare.gov. You can also call 1-800-MEDICARE (1-800-633-4227) 24 hours a day, seven days a week.
Final Tips
If you’re thinking about enrolling in a Medicare Advantage Plan for the first time, educate yourself in order to make an informed decision. If you’re switching from a Medicare Advantage Plan to original Medicare, you will probably want to purchase a Medicare supplement plan, so you might want to check on that first to see if you qualify and how much it would cost. Also, you will need to choose and enroll in a Medicare drug plan (unless you have good coverage from another source).
Did you know that Medicare does not pay for long-term care?
Although we mentioned it above, I will reiterate that Medicare does not cover one penny of long-term care, ever. At most, Medicare covers 100 days of short-term rehabilitation that often takes place in a skilled nursing facility.
Just as you are planning for the Open Enrollment Period, you should plan for your future and for your loved ones. If you have a loved one who is nearing the need for nursing home care, or if you haven’t done your estate planning or incapacity planning, please call us to make an appointment for a consultation:
Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797
About Evan H Farr, CELA, CAP
