Medicare Enrollment Options for 2014-15

A summary of what you need to know.

Key Medicare enrollment periods are approaching. This fall and winter, there are three periods in which Medicare beneficiaries can either enroll or disenroll in forms of coverage.

* Oct. 15-Dec. 7: Open enrollment period. This is when you can exit Original Medicare (Parts A & B) for a Medicare Advantage Plan (Part C) and change your prescription drug coverage (Part D). You can also get out of a Part C plan and go back to Parts A and B during this period.¹

* Dec. 8: Annual enrollment period begins for 5-star plans.As you probably know, Part C and Part D plans are assigned ratings. Beginning December 8, 2014 and ending November 30, 2015, a window opens for you to enroll in a 5-star Part C or Part D plan. You can do this once per 365 days. How do you find the 5-star plans? Visit www.medicare.gov/find-a-plan.²

* Jan. 1-Feb. 14, 2015: Disenrollment period.Should you join a Part C plan in late 2014 and subsequently want to reverse that decision, you can disenroll from that Part C plan within this window of time and go back to Original Medicare (Parts A & B) with a stand-alone Prescription Drug Plan (Part D).

Do you have to confirm your Medicare enrollment using the health insurance exchanges? No. If you have Original Medicare or a Medicare Advantage plan through an HMO or PPO, you are insured in the eyes of the federal government. If you need to make changes to your Medicare coverage, you don’t need to go to the exchanges to do so. (For the record, you can’t buy Part D coverage or Medigap insurance via the health insurance exchanges.)³

The Affordable Care Act has enhanced Medicare benefits. It gives Medicare recipients in the “donut hole” avenues to brand-name prescription drug discounts, and recipients may now take advantage of free preventive benefits, cancer screenings and an annual wellness visit.³

There is some fine print worth noting, however: if you have only Medicare Part B coverage (medical insurance), you are considered to lack minimum essential coverage under the ACA and you could end up having to pay the penalty for being uninsured. If you just have Medicare Part A coverage (hospital insurance), you are considered covered under the ACA. To repeat, anyone with Original Medicare coverage (Parts A & B) is covered under the ACA.³

What should you look for in a Part C or Part D plan? Be sure to take a look at a few key factors.

* While premiums matter, overall plan expenses ultimately matter most; scrutinize the copays, the co-insurance and the yearly deductibles as well. Attractively low premiums might not tell you the whole story about the value of a Medicare Advantage plan.

* How inclusive is the plan network? Assuming the plan has one, does it include the hospitals you would choose and the physicians that now treat you?

* Regarding Part D, how wide-ranging is the prescription drug coverage? Look at the list of approved drugs (the formulary). If the drugs you want or need aren’t listed, you are probably going to have to open your wallet to pay for them. The frustrating thing about formularies is how they change; drugs on this year’s list may not always be on next year’s list.

* Every fall, Medicare plans mail out Annual Notice of Change (ANOC) letters to their plan members. Use this notice to determine if your current plan is still right for you and your medical care needs. If you don’t receive such a letter by September, contact your plan.⁴

How expensive will Part D coverage be next year? In April, The Centers for Medicare and Medicaid Services (CMS) issued the finalized 2015 Standard Benefit Model Plan parameters. (The definition of “Standard Benefit Model Plan” = the minimum allowable Part D coverage.) Under those parameters,the initial deductible for standard Part D prescription drug coverage will go up $10 to $320 next year. After your total prescription drug costs surpass $320, you’ll pay 25% of your total prescription costs between $310-2,960. You’ll find yourself in the “donut hole” between $2,960-4,700 next year (compared to $2,850-4,550 for 2014). Next year, Part D enrollees will get a 55% discount on the total cost of brand-name drugs they buy while in the donut hole. Should your total prescription drug costs exceed $4,700 in 2015, you’ll be eligible for catastrophic coverage, leaving you on the hook for just 5% of drug costs above that level.⁵

The Centers for Medicare & Medicaid Services projects monthly premiums for MA plans and standard Part D plans toward the end of each year. In late 2013, it forecast average monthly premiums of $31 for a standard Part D plan in 2014 and average monthly premiums of $32.60 for an MA plan in 2014. The 2015 monthly premiums are likely to approximate these.⁶