Medicare Enrollment Deadlines You Shouldn’t Miss

Medicare Enrollment Deadlines You Shouldn’t Miss

Most people become eligible for Medicare during the months around their 65th birthday. If you don’t sign up for Medicare during this initial enrollment period, you could be charged higher premiums for the rest of your life. Here’s a look at when you need to sign up for Medicare and the penalties you could be charged for late enrollment.

Medicare parts A and B. Retirees who are receiving Social Security benefits are automatically enrolled in Medicare parts A and B, and coverage begins the month they turn 65. But retirees who haven’t claimed Social Security will need to take action to sign up for Medicare. You can first sign up for Medicare Part A hospital insurance and Medicare Part B medical insurance during the seven-month period that begins three months before the month you turn 65. Your coverage can begin as early as the first day of the month you turn 65, or the first day of the prior month if your birthday falls on the first of the month. Medicare Advantage Plans, a private sector alternative to original Medicare, have the same initial enrollment period.

If you don’t enroll in Medicare during the initial enrollment period around your 65th birthday, you can sign up between Jan. 1 and March 31 each year for coverage that will begin on July 1. However, you could be charged a late enrollment penalty when your benefit starts. Monthly Part B premiums increase by 10 percent for each 12-month period you delay signing up for Medicare after becoming eligible for benefits. “The idea behind the penalty is to give people a financial incentive to enroll in insurance from the get-go as opposed to waiting until they have some kind of negative health event,” says Mark Duggan, an economics professor at Stanford University.

If you or your spouse is still working after age 65 for an employer that provides group health insurance, you need to sign up for Medicare within eight months of leaving the job or the coverage ending to avoid the penalty. “You could [sign up] at anytime after you turn 65 and are actively working, or when you retire they give you eight months to sign up for Medicare Part B without having to pay a premium penalty,” says David Santana, a health insurance specialist for the Centers for Medicare and Medicaid Services. Retiree health insurance and COBRA coverage are not forms of health insurance that allow you to avoid Medicare’s late enrollment penalty.

Medicare Part D. Medicare Part D prescription drug coverage has the same initial enrollment period of the seven months around your 65th birthday as Medicare parts A and B, but the penalty is different. The late enrollment penalty is applied if you go 63 or more days without prescription drug coverage after becoming eligible for Medicare. The penalty is calculated by multiplying 1 percent of the “national base beneficiary premium” ($34.10 in 2016) by the number of months you didn’t have prescription drug coverage after Medicare eligibility and rounding to the nearest 10 cents. This amount is added to the Medicare Part D plan you select each year. And as the national base beneficiary premium increases, your penalty also grows.

Medigap plans. Medigap policies are private supplemental insurance plans that can be used to pay for some of Medicare’s cost-sharing requirements and sometimes services traditional Medicare doesn’t cover. The Medigap initial enrollment period is different than the other parts of Medicare. It’s a six-month period that begins when you are 65 or older and enrolled in Medicare Part B. During this initial enrollment period private health insurance companies are required by the government to sell retirees a Medigap policy regardless of health conditions. “That’s when you’re entitled to get a Medigap plan without substantial underwriting,” says Ronald Kahan, a medical doctor and author of “Medicare Demystified: A Physician Helps Save You Time, Money, and Frustration.”

After this enrollment period, insurance companies are allowed to use medical underwriting to decide how much to charge for the policy and can even reject patients they don’t want to cover. If you miss the initial enrollment period you are no longer guaranteed the ability to buy a Medigap policy or could be charged significantly more if you have any health conditions. You might not be able to switch into a new Medigap plan later, so choose carefully during the initial enrollment period. “Once you have been on a supplemental plan for a while, and let’s say you get sick, the plan that you are on must keep you, but another plan does not have to take you,” Kahan says.

Excerpt from an article printed on US News, August 15, 2016 and written by Emily Brandon, the author of “Pensionless: The 10-Step Solution for a Stress-Free Retirement.”

The Latest Battle in the Prescription Drug Coverage Wars

The Latest Battle in the Prescription Drug Coverage Wars

Drug companies and insurance companies aren’t getting along lately, and patients as well as their doctors are caught in the crossfire.

Certain drug therapies have changed the way we fight and live with serious diseases such as rheumatoid arthritis, Crohn’s disease, multiple sclerosis and many forms of cancer. As a result, for one thing, cancer is no longer a death sentence. But limitations on insurance coverage can often stand in the way of patients getting the treatment they need. Now, thanks to the Affordable Care Act, everyone must purchase insurance, expanding the marketplace while simultaneously turning the insurance industry into a runaway train with unchecked power to deny care in an effort to increase profits.

Here’s where it gets even more complicated: Insurance companies and drug companies negotiate the price of drugs and coverage plans for drugs in total secrecy. No two plans pay the same amount for a drug because drugmakers and insurers – as well as pharmacy benefit managers, another arm of insurance companies focused entirely on drugs – have made deals that include negotiated rates for certain drugs. So when you hear about escalating drug prices, it’s not a totally accurate representation of cost; almost always, the manufacturer provides hefty discounts or rebates to the insurer.

It’s a confusing, broken system that operates largely out of the public view, but we’ve reached a tipping point. Now, there’s a nonprofit at the center of the prescription drug coverage wars called the Institute for Clinical and Economic Review. This group of health economists, originally funded by the health insurance industry and today sustained by a weathy former Enron executive, John Arnold, has begun releasing reports about how drugs should be priced. These suggested prices are based on calculations of what they’re worth to the patient and to society. If medicines are too expensive compared to an arbitrary value of treating the patient, ICER reports will recommend a lower price for the drug. Payers, such as private insurers and Medicare, can use the report to justify no longer covering a medication. An insurer can do this either by adding to its formulary exclusion list or forcing patients to fail first on a weaker drug. This can put cost savings ahead of patients getting treatments they need.

If a calculation that assigns a different value of life to someone who may be old and sick versus someone young and healthy to determine who is more deserving of a therapy sounds un-American, that’s because, in my opinion, it is. It’s called cost-benefit analysis, and it’s the last thing you want someone who doesn’t care about you to do, because you, the patient, will never come out on top.

Recently, ICER has come under a lot of fire from groups, including ours, because of its lopsided approach and flawed methods for calculating the “value” of one crucial part of health care, our drugs. While drugs are expensive and sometimes pricing needs to be checked, there are ways to rein in spending that don’t undermine, insult and devalue the people who take the medicine or threaten the motivations of the innovators who make these drugs. One example would be more transparent negotiations and bulk-buy discounts for Medicare.

But ICER keeps on trucking, and they’re coming for a class of drugs that you may need now or in the future. If their methodologies aren’t radically improved and they don’t receive more oversight, medicines like the biologics used to treat rheumatoid arthritis – which are currently under review – are very likely to no longer be available to many patients because of these calculations.

Earlier this month, ICER released a detailed report addressing the points made by its critics, listing seven “myths” about ICER, ranging from its initial funding sources to its methodologies. However, in the flurry of public relations efforts, ICER ended up undermining its own goal by omitting key facts and casting serious doubts about their transparency and credibility.

Our organization, Global Healthy Living Foundation, released a point-by-point response to include the facts omitted by ICER.

ICER’s efforts are commendable and the principle of their existence is one we respect, but the way in which they’re going about their business is keeping patients from accessing critical and even potentially lifesaving therapies.

We will continue demanding that patients have a greater voice and a greater share of votes within ICER’s governance structure, as well as advocating for equal representation of all industry stakeholders. This includes doctors, drug companies and insurance companies. When ICER issues reports that earn buy-in and approval from doctors’ groups and patient advocacy organizations, we’ll be happy.

And one final note to ICER: Transparency isn’t just what you want to tell us. Omitting vital information and hoping people won’t do their homework only undermines your objectives.

Taken from an article printed on US News, August 22, 2016 and written by Seth D. Ginsberg.

5 Reasons to Switch to a New Medicare Advantage Plan

5 Reasons to Switch to a New Medicare Advantage Plan

Medicare Advantage plan participants are allowed to switch plans or resume original Medicare each year during the open enrollment period from October 15 to December 7. But most retirees (78 percent) don’t choose a new health insurance plan, according to a new Kaiser Family Foundation report. An average of 9 percent of retirees voluntarily changed plans each year between 2007 and 2014, and another 5 percent were forced out because their existing plan ended. Just 2 percent of retirees went back to traditional Medicare. But swapping plans might save you money or improve the quality of your benefit. Retirees who switched often gained lower premiums and a higher rated plan. Here’s how to tell if you should look for a new Medicare Advantage plan.

A similar plan has lower premiums. Significant premium increases frequently motivate retirees to start shopping around for a new plan. Participants facing a premium hike of over $20 were especially likely to select a new plan, ranging from 21 percent of people whose premiums were scheduled to increase between $20 to $29 and climbing to 29 percent of those whose premiums grew by $40 or more, KFF found. In contrast, only 11 percent of those with a premium increase of less than $20 switched plans. Medicare Advantage enrollees who switched plans in 2014 saved an average of $210 on premiums.

Smaller out-of-pocket costs. Besides premiums, retirees in Medicare Advantage could be expected to pay a variety of other out-of-pocket costs. But Medicare Advantage plans have an annual limit on out-of-pocket expenses for medical services, which varies among plans and can change each year. Once you reach this limit, you won’t have any further out-of-pocket costs for covered services. Participants who transferred to a new plan reduced their out-of-pocket limit by an average of $401. “By switching plans, enrollees got better catastrophic protection, with lower out-of-pocket spending limits,” according to the KFF report.

The quality of your existing plan is low. Medicare Advantage plans are rated using a star system, with five stars being the best ranking. The ratings system takes into account a variety of factors including the member experience, complaints and customer service. Retirees in plans with low quality ratings are more likely to switch, with 14 percent of people in two and two and a half star plans moving on, compared to just 3 percent of those in five star plans. Most enrollees who voluntarily switched plans in 2014 (71 percent) selected a plan provided by a different firm.

Your plan has too many restrictions. Some Medicare Advantage plans have coverage restrictions that don’t apply to people with original Medicare. For example, Medicare Advantage enrollees might only be able to see doctors or use facilities that belong to the plan, or be charged significantly more to use services outside the plan’s preferred network. You may also need a referral to see a specialist. The plan’s rules can be changed each year, so you will need to review the restrictions annually. If these coverage restrictions are making it difficult to see your preferred doctor or using a medical facility near your house becomes too expensive, it may be time to look for a new plan.

You’re willing to learn a new plan’s rules. Of course, switching into a new Medicare advantage plan means you will have to spend time researching plans and select a new one. You will also have to learn which doctors and medical facilities are covered at the preferred rate and what services trigger additional out-of-pocket costs for the new plan. “Seniors have said that they appreciate the opportunity to change plans, but often feel that the differences across plans are not important enough to warrant the time and effort it takes to compare and change plans,” KFF found. “Some enrollees may place a higher value on other factors, such as having access to specific doctors or the comfort of sticking with a plan that is familiar.” Perhaps due to the work involved in selecting a new provider, younger retirees between ages 65 and 75 (12 percent) were more likely to change plans than those 85 and older (7 percent).

Taken from an article published on US News, September 23, 2016 and written by Emily Brandon is the author of “Pensionless: The 10-Step Solution for a Stress-Free Retirement.”