Ask Kim
Some Medicare Rates to Rise
Find out what changes to expect -- and what you can do -- if you have a prescription-drug plan or Medicare Advantage plan.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
October 8, 2009
What is going to happen to rates for Medicare Part D prescription-drug plans next year? Can I switch plans?
Prices for both Medicare Part D prescription-drug plans as well as Medicare Advantage plans are going to rise in 2010. And you have from November 15 to December 31 to decide whether you want to stay in the same plan or switch plans for 2010.
Average premiums for Part D plans are increasing by 7% in 2010, to $30 per month, and average premiums for Medicare Advantage plans are jumping by 22%, to $39 per month. These price hikes may be particularly tough to stomach next year, when Social Security will not have a cost-of-living increase.
And premium increases are only part of the picture. More than 60% of Part D plans will charge an annual deductible in 2010 ($310 is standard) before covering any drug costs, up from the 45% that charged a deductible in 2009, according to the Kaiser Family Foundation. Fewer Part D plans will provide coverage in the so-called doughnut hole, which begins after you reach $2,830 in total drug spending and extends until your total drug costs for the year reach $6,440 in 2010; within that gap, you generally have to pay all the bills yourself. The plans that do provide some coverage in the doughnut hole cover only the cost of generic drugs; otherwise, you’re on your own.And be sure to check how each Part D plan treats your specific medications: Co-payments are rising, and many insurers are changing formularies. For example, you could end up with higher out-of-pocket costs if your insurer switches your drug from preferred to co-pay nonpreferred. Ask your doctor whether you can switch any of your drugs to a generic or lower-cost medication; the policy with the best deal for brand-name drugs may not be the best deal for generics.
The Medicare prescription-drug-plan finder is an excellent tool to analyze the costs of Part D plans for your situation. Type in your drugs and dosages, and you’ll see total out-of-pocket costs -- premiums as well as co-payments -- for your medications throughout the year. Or call 800-633-4227 for personalized assistance.
This year’s premium increases come on top of previous cumulative price hikes. Premiums for AARP MedicareRx Preferred, the most popular Part D plan, have risen by 50% since 2006, according to Avalere Health, a health-care consulting firm. Premiums for Humana Enhanced, also a popular plan, have increased by 180% over the same time period.If you’re struggling to afford the premiums for Medicare Part B, a Part D prescription-drug plan and a medigap policy, consider going with Medicare Advantage, which provides medical as well as prescription-drug coverage through a private insurer (it may also include dental and vision care). Almost 87% of Medicare beneficiaries will have access in 2010 to a low-cost Medicare Advantage plan that charges no premium above the cost of Medicare Part B.
These plans, too, have their drawbacks. Many are boosting premiums and increasing co-payments for doctor’s visits, hospital stays and prescription drugs. You may have to pay much more out of pocket for certain types of treatments, such as chemotherapy, than you would with Medicare and medigap. And be sure to find out whether your providers participate in the plan (the least-expensive plans, Medicare HMOs, have the tightest restrictions on doctors and hospitals).
If you are already enrolled in a Medicare Advantage plan, you should receive an annual notice of change in late October that outlines any differences in your plan’s coverage and costs from 2009 to 2010, which should be a key piece of your research, says Donna Burtanger, senior director of Medicare for SilverLink. To find out about prices and coverage for plans available in your area, as well as customer-service ratings, go to the Medicare Options Compare tool at Medicare.gov.
Many people are concerned that Medicare Advantage plans will leave the business if Congress passes a health-care reform plan that cuts back on subsidies to private insurers. If your plan does shut down, you may switch to another Medicare Advantage plan or move back to traditional Medicare. If you do, insurers must offer you medigap plans A, B, C or F regardless of your health (otherwise, the price of a new medigap policy may be based on your health, unless you signed up for Medicare Part B in the past six months).- Comments
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Reader Comments (5)
Posted by: Alan Dooley at 10/09/2009 02:13:22 PM
For aging people with medicare advantage plans, they need to look at nursing home issues. Our Mom was required to seek skilled nursing rehab following two back surgeries and we were chagrined to learn that most such facilities in Southwestern Illinois did not wish to work with her Medicare Advantage plan and would not accept her. We got her into a better than average situation, but it took many, many calls and a lot of anxiety to reach that point. If she had had straight Medicare coverage with a supplement she would have been accepted at any of the top-flight facilities in a second. We're getting help from the state to identify a better way forward for her. Her medicare advantage plan does well with prescriptions, but what good is that if she can't get proper treatment?
Posted by: Thad Roy at 10/10/2009 06:01:12 AM
So let me get this straight. In a nutshell, the Obama plan will cover young people who do not want health care and illegals who are not American citizens and the people who don't want ObamaCare will pay. Sounds logical to me.
Posted by: Lucy G. at 10/12/2009 04:23:48 PM
Thad Roy, your definition of Obamacare is SO right on target, it should be offered on billboards all over America!
Posted by: Valerie Plotkin at 10/18/2009 03:17:02 PM
Why work? Why pay taxes? Better treatment in jail! Let's let everyone in the world who HATES us be protected. Is Nancy Pelosi driving a green car? or is her jet using green fuel? This country has become a joke. I submit that all the liberals need to be the first thrown out....without their cash. Easy to be liberal when you live in Beverly Hills. Bet President Bush is laughing! Americans are fools and believers of great rhetoric. Why even look at the facts...
Posted by: escortrider at 12/06/2009 10:00:38 AM
To Valerie Plotkin: I am not a liberal, I despise Nancy Pelosi, and I am not in favor of Obamacare, but it is difficult to know exactly what you are talking about through the fog of your generalized anger. "Better treatment in jail"?? Better than what? Most prison medical treatment is pretty horrible. I am 65 and get excellent medical treatment from Kaiser in Los Angeles under a Medicare Advantage Plan. That is one very good reason why I worked and paid taxes for a lifetime (and why I still work part-time); I am very satisfied with the result. Yes, my part B premium will go up in 2010, but it will still be well worth the small cost. You say, "Why even look at the facts.." but you do not offer any specific facts to support your non-argument of "Why work? Why pay taxes?" I have been specific here; if you had been more specific I wouldn't be guessing why you are so angry.