Although you aren’t required to reapply for Medicare every year, you are able to make changes to your coverage from year to year.
Medicare makes changes to the program each year such as increases in deductibles and copays. Insurance carriers can also change costs and benefits inside their Medicare Advantage plans that may make you want to consider other options.
Educating yourself on the changes that Medicare makes for each subsequent year is important. That way, you will be able to use the allowed election periods to choose new coverage if you so desire.
New Plans and Benefits
The new year brought us 417 new Medicare Advantage plans, bringing the total count to 2,734 across the nation, according to the Kaiser Family Foundation. In addition to these new plans, never before allowed benefits have been added to some Medicare Advantage plans as well.
These new benefits consist of adult day care, home modifications for health reasons, meal delivery, and transportation to and from medical offices. Thanks to the Centers for Medicare and Medicaid Services (CMS), at-home health benefits like these are allowed to be added to Medicare Advantage plans.
While not all Medicare Advantage plans offer these new benefits, nearly 10% of available Medicare Advantage plans do. If these additions prove popular with Medicare beneficiaries, then hopefully more plans will include these benefits in the future.
Drug Formulary Changes
Typically, insurance carriers adjust their Medicare Advantage plans and Part D plans every year to fit their new coverage standards. Formulary changes are an important thing to look out for every year, as your plan could stop covering a specific drug that you take.
Each year in September, you should receive an Annual Notice of Change (ANOC) from your Medicare Advantage plan or stand-alone Part D drug plan. This letter will let you know what changes the carrier is making to your formulary, among other things. Review the changes so that you can be aware of any additions or deletions that affect you.
Enrollment Window Additions
If you receive your ANOC letter and you see changes that you don’t like, you can change plans during the fall Annual Election Period (AEP). However, finding a new plan that meets all your needs and wants can be tricky and sometimes people make a plan choice that they later regret.
Fortunately, Medicare has brought back the Medicare Advantage Open Enrollment Period to give people an easy out. If the Medicare Advantage plan you are currently enrolled in isn’t all that you thought it would be, you can use this new period to change your plan or simply drop it and return to Traditional Medicare. You have from January 1stuntil March 31stto make a change.
Spending Changes During the Coverage Gap
The coverage gap is the third stage of a Part D drug plan. Once you and your plan have paid $3,820 for the year in total drug costs, you will be moved into the coverage gap, also known as the donut hole.
Once in this stage, you pay a certain percentage for each type of drug. Before this year, you’d have to pay 44% of the cost of any generic drug and 35% of the cost of any brand-name drug. In 2019, you will only have to pay 37% for generic drugs and 25% for brand-name drugs.
Once your spending, the carrier’s spending, and the manufacturers discounts equal $5,100 for the year, you will move out of the donut hole and into catastrophic coverage. Knowing that you’ll spend less in the donut hole this year than ever before is a good thing.
New Medicare Income Brackets
Medicare Part B and Part D premiums are based on your income level or tax bracket. In past years, there were five separate tax brackets. Depending on the bracket that you were in, you would pay either Medicare Part B’s base premium or a higher amount called an Income-Related Monthly Adjustment Amount.
For instance, if you fell into the first bracket ($85,000 or less for an individual), then you’d pay the base premium for Part B, which in 2019 is $135.50. However, if you fell into any of the higher earning brackets, you’d pay an increased premium.
Medicare and the Social Security Administration made some changes to the brackets though that affect people with higher incomes. One of these changes was a new sixth bracket for people with the highest incomes. People who earned more than $500K as an individual or $750K jointly can expect to pay $460.50 per month for Part B.
Medicare tries to adapt to the standards of healthcare and unfortunately the cost of healthcare is always inflating. As healthcare standards change, so must Medicare. Therefore, you should always be aware of the changes that Medicare makes that could affect your coverage. There are election periods during which you can make changes to your own Medicare coverage to help you adjust to any changes which would otherwise negatively affect you.
This guest post was graciously provided by Danielle Kunckle, co-founder of Boomer Benefits.