Medicare will cost you more in 2017 – all the more reason to scrutinize your coverage as the annual open enrollment gets under way this weekend.
Open enrollment – which runs from Oct. 15 to Dec. 7 – is the time of year when Medicare enrollees can switch their Part D prescription drug coverage. They also can move in or out of Medicare Advantage – the managed-care alternative to traditional, fee-for-service coverage – or change providers.
Premiums and other out-of-pocket Medicare costs will be higher in 2017. The Medicare Part B premium may jump 22 percent to $149 for some enrollees, although final numbers will not be released until later this month.
The higher premium amount would be charged to enrollees who are not “held harmless” under the program’s rules, which do not allow the Part B premium to rise at an amount greater than the annual Social Security cost-of-living adjustment. The higher premium will be charged to enrollees, people not yet receiving Social Security and more affluent beneficiaries subject to high-income premiums.
Meanwhile, the Part B deductible for all enrollees is expected to jump to $204 from $166.
Premiums for many of the most popular Part D prescription drug plans also will rise next year. The one bright spot on cost is Medicare Advantage, where average premiums are expected to dip next year.
If you use traditional fee-for-service Medicare and have only a Medigap supplemental plan – and you are happy with what you have – there is no need to do anything during annual enrollment. But it makes sense to re-shop coverage if you have a Part D prescription drug plan or are enrolled in Medicare Advantage.
Yet very few Medicare beneficiaries bother to re-shop their coverage during annual enrollment – just 10 percent of Medicare Advantage enrollees do so, according to a recent study by the Kaiser Family Foundation (KFF). Those who did shift Advantage plans between 2013 and 2014 saved $190 annually on their monthly premiums on average, and lowered their out-of-pocket limit by $401, the study found.
For the civic-minded, there is another reason to shop: adding a dose of competitive pressure to the Medicare marketplace. “It helps the system get better,” said Philip Moeller, author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs” (Simon & Schuster, October 2016).
“When people shop, that consumer behavior helps discipline the marketplace and keeps it honest.”
Here is an overview of trends in the Medicare market for 2017, along with tips for smart shopping.
Start by reviewing the Annual Notice of Change that Medicare sends by mail in late September each year. The notice lists all changes to your coverage for the coming year.
Odds are that your current premium will be higher next year. Among the 10 most popular Part D prescription drug plans, premiums will rise an average of 4 percent next year, according to Avalere Health. The maximum deductible allowed by Medicare in 2017 also will be higher – $400, up $40 from this year (actual deductibles vary among plans).
Shoppers should not base their selection on premiums alone, cautions Frederic Riccardi, director of client services for the Medicare Rights Center, a nonprofit advocacy group. “You should look at the premium, deductibles, co-insurance and any plan restrictions on the drugs you take,” he said.
Part D plans routinely change their formularies – the list of medications that are covered – and the rules under which they are covered. For example, a plan might decide to restrict the quantity of a medication or require “step therapy” – a requirement that you try a less expensive alternative to the drug prescribed by your doctor. And it could drop coverage of your medication altogether.
In the Medicare Advantage market, premiums look stable for next year – in fact, the average premium will fall 4 percent, to $31.40 monthly, according the Centers for Medicare & Medicaid Services (CMS), which administer the Medicare program.
Medicare Advantage often saves money for enrollees by eliminating the need for separate drug coverage and Medigap. But the trade-off is less flexibility in choosing your healthcare providers – and Advantage plans are free to add and drop providers. The annual enrollment period provides the opportunity for enrollees to review the list of included providers, to make sure they meet your needs.
Reviewing the list of in-network providers can be difficult. Providers are not listed on the Medicare Plan Finder, and a recent study by KFF found that the information available from plan providers can be difficult to review, out of date and frequently contain inaccurate information.
The best online tool for shopping plans is the Medicare Plan Finder at the Medicare website. Plug in your Medicare number and drugs (you will need each drug’s name and dosage). The tool then displays a list of possible plans, their estimated cost, premiums, and deductibles; which drugs are covered, and customer-satisfaction ratings. The finder also will give you advice about drug utilization and restrictions.
Advice also is available from Medicare’s toll-free number (1-800-633-4227).
The Medicare Rights Center maintains a free telephone hotline (1-800-333-4114) that can walk beneficiaries through differences between traditional Medicare and Advantage plans, and help with selecting PDP and Advantage plans.
Federally funded State Health Insurance Assistance Programs (SHIP) can also provide this kind of free assistance. Find your local SHIP here.