With Medicare open enrollment underway, many new and existing Medicare beneficiaries have been wondering about their plan and what to expect in the future in an uncertain political climate.
Samantha Morales of the Medicare Rights Center, a national nonprofit, helps manage its call line to answer Medicare questions. She says the center has been receiving calls from many beneficiaries nervous that Medicare may have been cut or that their benefits could be eroding. But for now, she says, there’s been no significant changes to Medicare.
“We've received calls from folks who are very nervous,” she says. "Thus far, there are no changes to the Medicare program, so we are sticking to what we know."
While there have been no changes to the overall program, Morales said that Medicare beneficiaries should still pay close attention to how their plan might be changing this year and whether it still suits their needs.
There are three things in particular that consumers should watch for during the current open enrollment period, which lasts until Dec. 7, 2017:
1. How are your benefits changing this year, and will your current plan still cover your preferred doctor?
2. What about your prescription drug plan? Does it still suit your needs?
3. Is there a more cost-effective plan available?
Experts say that there are a few areas where Medicare beneficiaries may see some change in coverage or pricing during the open enrollment period.
1. Medicare advantage plans can vary widely
Basic Medicare benefits cover hospital and hospice as well as outpatient care. But additional benefits beyond that are often provided through private plans called Medicare Advantage, which can have benefits and prices that vary from year to year.
Laura Adams, a senior analyst with online insurance tool InsuranceQuotes, says that about a third of seniors are enrolled in a Medicare Advantage plan for services like vision and dental care that aren’t covered by original Medicare.
The variability of Medicare Advantage plans is vast, both in prices and benefits offered.
"There's over 3,000 advantage plans out there, all of them are very different,” Adams said. “Some of them come with lots of bells and whistles and others are very stripped down and affordable.”
The available plans also vary considerably by region, so consumers in some areas will have far more choices than in others. "There certainly is a big swing depending on where you live,” Adams said. “There are more plans offered, there's a lot more variety out there, some seniors may have as many as 10 plans to choose from."
Given the variability in the plans offered, it’s hard to tell if they’re generally getting more expensive. But it’s important to check if the plan you’re in now will still have the benefits you need. Furthermore, another plan could be a better fit, so check the market to see if there’s a more affordable plan that’s also customized to your needs.
2. Prescription drug plan changes ahead
While most Medicare Advantage plans include prescription drug plans, there will be a slight decrease in premiums for standalone drug plans under Medicare Part D.
Prescription drugs are the biggest expense for many on Medicare, but coverage has expanded due to provisions in the Affordable Care Act (Obamacare). The coverage gap, often referred to as the “doughnut hole,” has been closing, says Kimberly Lankford, a contributing editor at Kiplinger’s Personal Finance.
For Medicare beneficiaries on a Part D plan, prescription drugs are only covered up to $3,750 per year. Once that threshold is reached, consumers have to pay higher, though still reduced, prices out of pocket. Every year that price lowers a little more – this year the rate amounts to 35 percent of the cost for brand name drugs and 44 percent of the cost of generic drugs -- until 2020, when consumers will only have to pay 25 percent.
If your drugs are particularly expensive, you could end up without coverage for half of the year, so reducing that price is a key factor in keeping healthcare affordable and budgets stable for older Americans, some of whom are spending thousands of dollars on drugs. A recent Kaiser Foundation study found that 3.6 million Medicare Part D enrollees were paying more than $7,000 in total drug costs each year.
3. Part B premiums will rise for wealthy Americans
In 2018, some high earners enrolled in original Medicare may see price increases in their Part B premiums, which cover outpatient care. The increase will be slight, and will only affect those earning $133,000 a year, or $267,000 a year for married couples filing jointly.
"For average Americans, it looks like the Part B premiums will stay about the same," Adams said.
4. New ways to save on prescription drugs
To save on medications, Lankford points out that some prescription drug plans now have preferred pharmacies that offer lower prices. But the pharmacies with the best prices on certain drugs might change from year to year, so it’s important to shop around during the enrollment period.
Also, it can complicate your shopping if your spouse has a different plan with a different preferred pharmacy.
"In the past that hasn't been a big deal,” Lankford said. “But now that there's preferred pharmacies, you're going to need to go to different pharmacies to get the best out of pocket costs."
Adams points out that buying generic drugs can save you money, as can buying online or getting larger doses and splitting the pills, if possible. Joining a membership-only store like Costco or Sam’s Club may be worth it if the discount on drugs is high enough.
5. Additional resources available
For anyone who could use more advice, one great resource is the State Health Insurance Assistance Programs or SHIPs, which provide free one-on-one assistance and counseling to Medicare beneficiaries to help them understand their benefits.
SHIPs are still around for now, but under President Donald Trump’s budget proposal, would cut funding almost entirely for these federally backed programs. Find the SHIP in your state.