Medicare benefits can make a huge difference for your aging parents. But you need to know that there is an open enrollment period for Medicare. In 2011 it goes from October 15 – December 7 for plans effective January 1, 2012. Most people don’t realize that this year the enrollment period ends earlier than usual. You don’t have a lot of time to figure out what plan is best for your parents, but this guide will help you.
There are two major decisions to make: the type of plan (Original Medicare or a Medicare Advantage Plan) and the type of prescription plan to choose under Medicare Part D.
Original Medicare, often referred to as “traditional Medicare” is a plan in which the federal government directly pays their health care providers on a fee-for-service basis for hospital services (Part A) and for care provided by physicians and other out-patient health care providers (Part B). A Medicare Advantage Plan (Part C) is offered by a private company that contracts with Medicare to provide Medicare Part A and Part B benefits to its members. Many of these plans also provide prescription drug coverage, so their members do not need to buy a separate Medicare Part D plan.
Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans.
Experts say there will be quite a few changes between 2011 plans and those being offered for 2012. This is partly due to the economy, changing priorities, and cost-shifts among insurance companies and changes resulting from the Affordable Care Act. For this reason it’s critical that you and your parents read the volumes of material sent by their current plan, other competitors and Medicare to ensure they’re getting the best plan possible. It’s a great deal of information, but taking the time to look over the changes of their current plan and comparing them against other offerings could save them hundreds, if not thousands, of dollars.
Your parents should have received a copy of their Medicare Handbook for 2012 and an Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) from the plans for which they are currently enrolled. The Annual Notice of Change provides a brief summary of changes to plan benefits and related costs that will take effect January 1, 2012. The Evidence of Coverage provides a more comprehensive and detailed description.
Review these documents carefully and ask the following questions:
- How much are the premiums, deductibles and co-pays for physician visits and hospital stays?
- Are the doctors that currently treat me in the plan’s network?
- Will I only be allowed to choose from the plan’s network of physicians and hospitals?
- Do I need a referral to see a specialist?
- Are my regular prescriptions covered on the plan’s list (known as a formulary)?
- Is there a charge for prescriptions? If so, how much?
- Does the plan select certain pharmacies that I can use?
- If I am traveling in another state and become sick or injured, will I be covered?
- What is the plan’s five star rating from Medicare?
- Are the hospitals, doctors and pharmacies geographically close to me?
- Is there an out-of-pocket spending limit?
The Medicare website has a checklist to help guide you when you compare plans. Go to medicare.gov
and choose “Compare Drug & Health Plans.” This “Plan Finder” will ask you several questions, such as the list of drugs you take, the name of your current plan, and your zip code. You’ll then see a list of plans available in your area, which you can compare against the plan you currently have. For the first time it also includes a star rating system of the plans (1 is the lowest rating and 5 is the highest).
If your parents are Original Medicare beneficiaries, or they are enrolled in an Advantage Plan without drug coverage, they need to find a Prescription Plan (Part D). The Plan Finder at medicare.gov
can compare costs and drugs listed on their formularies. Be sure to have a list of the drugs your parents take handy as you’ll need to enter them. The good news for 2012 is that Part D premiums will not increase this year and remain at around $30 per month.
You can also call Medicare (1.800.633.4227). Say “Agent” at the prompt and someone will help you sort through the plans.
The bottom line
- The open enrollment period for Medicare goes from October 15 – December 7 for plans effective January 1, 2012.
- When helping your parents choose a Medicare plan, you’ll want to consider out-of-pocket costs, doctors, prescription costs and more.
- You can get help comparing plans using the Plan Finder at medicare.gov or by calling 1.800.633.4227 and asking for an agent.