insurance

What to Know About 2012 Medicare Open Enrollment

It's a good time to review your options and see if another plan offers a better deal.

What changes will there be to open enrollment for Medicare Part D and Medicare Advantage plans this year? When do I need to decide on my 2013 plan?

After some big Medicare changes last year, such as expanding preventive-care benefits and bumping up the time frame for Medicare open enrollment, this year’s changes are much smaller. The doughnut hole (the period during which you must pay out of pocket) for Part D prescription-drug coverage continues to close: The discount on brand-name drugs in the coverage gap will rise from 50% to 52.5%, and the federal subsidy to help pay for generics will rise from 14% to 21% in 2013. And people can now switch Medicare Advantage plans outside of open enrollment if they’re in an area that has a plan with a five-star quality rating (only 12 plans qualified in 2012, but more are expected to make the cut in 2013).

The Centers for Medicare and Medicaid Services estimates that the average premiums for Part D plans will continue to be about $30 per month, essentially the same as last year’s average cost. But, as we’ve seen in the past, plans can make other changes - -such as boosting co-payments or changing pricing tiers for your medications -- that don’t show up in those averages but that result in higher out-of-pocket costs. Medicare Advantage plans, which cover drugs and medical expenses, can also change coverage and prices. Jan Berger, chief medical officer for Silverlink Communications, which helps Medicare Advantage plans with consumer outreach programs, also expects some Medicare Advantage plans to narrow their networks -- that is, you can’t assume that your doctors will remain in the plan’s network in 2013.

You should receive the plan’s Annual Notice of Change in September, which will let you know if your Part D or Medicare Advantage plan will be changing premiums or coverage in 2013, or if it will be leaving the business. This document also includes the plan’s quality star ratings, which show how your plan stacks up based on 50 measures of coverage, communications and customer service.

Insurers can start marketing their 2013 plans by October 1 (which is when the Medicare Plan Finder is updated with the 2013 plan information). You then have from October 15 to December 7 to pick your Part D or Medicare Advantage plan for next year. If you don’t do anything, you’ll automatically be re-enrolled in the same plan (unless it is leaving the business). But even if you’ve been happy with your plan, this is a great opportunity to review your options and see if another plan offers a better deal, especially if your plan boosts premiums and co-payments, or moves your medications to a more-expensive pricing tier, or if you’ve been prescribed new medications since you last searched for plans. Also see how your plan’s quality rankings compare with the others in your area. For more information about tools and resources to help you compare Part D or Medicare Advantage plans, see How to Evaluate Your Medicare Options.

It’s also a good time to reassess whether you want to get coverage through traditional Medicare plus a medigap policy and Part D prescription-drug coverage, or if you’d like to get both your medical and drug coverage through Medicare Advantage. (You can switch Part D plans during open-enrollment season, but medigap policies don’t have the same open-enrollment schedule.) If you switch medigap plans more than six months after you originally sign up for Medicare Part B, you could be charged a higher rate or denied coverage for a new medigap policy based on your health, whereas you can switch Medicare Advantage plans, or move from Medicare to a Medicare Advantage plan, during open-enrollment period regardless of your health.

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