Knowledge Hoop

Last week we talked about open enrollment in the workplace and key considerations in choosing a healthcare plan.  Today, I’d like to continue that discussion, but with a focus on open enrollment for Medicare benefits.  As I began my research for this blog post, I found myself “shaking my head” and wondering how elderly people that do not have the support of their children or other family members are supposed to figure out what changes, if any, they should make to their existing coverage.  To be quite frank, I became confused on the various options they have to choose from.  As a result, I firmly believe that there are likely a lot of elderly individuals making “default” choices because they don’t understand all of their options.

Now I know this will probably not be a popular post.  For many of us, we prefer to be entertained, and while I can appreciate a good laugh, at some point we have to decide it’s also important to be informed.  That being said, I ask that you bear with me.  Even if this posting does not apply to you, I am sure there is someone in your family, church, or community that could use your assistance in navigating through this open enrollment period.

The Medicare Open Enrollment window is earlier this year – October 15 through December 7.  If you have elderly parents or grandparents, you have likely heard of Medicare Part A, B, C, and D, but do you know what they mean?  Here’s what I learned:

Part A is for inpatient care in hospitals, nursing facilities, hospice and home healthcare.  If you have Medicare insurance you are probably not paying a premium for Part A if you paid Medicare taxes while working.

Part B covers preventive services, doctor’s visits, outpatient care, home health, and other medical services.  If you are unsure of whether or not your loved one has Part B, look at their Medicare card.  There is a premium associated with Part B.  I won’t get into what the premium is because there are too many factors to consider.  If you or your loved one qualifies for Part B coverage, it is important that you understand how the related premium is calculated.  In this instance, the only dumb question is the one that’s not asked.

Part C refers to a Medicare Advantage Plan like an HMO or PPO.  In addition to being called “Part C”, they may also be referred to as “MA Plans.”  Based on my research, Part C closely resembles the health care options you may have with an employer.  Please note there are different MA Plans, and the options and additional fees vary based on the plan you select.  One thing to note is that Advantage Plans are not considered supplemental insurance; they are required to cover all of the services that original Medicare covers with the exception of hospice care.  However, even if you’re in a MA Plan, original Medicare will cover hospice care for you.  So why join an MA Plan?  Ultimately, you’re able to obtain additional coverage such as hearing, vision, dental, and other services.  Most MA Plans also include prescription drug coverage, Part D.

Part D is prescription drug coverage.  There are two ways to obtain Medicare prescription drug coverage – Medicare Prescription Drug Plans and Medicare Advantage Plans (discussed above.)  During the open enrollment period, you can join, switch, or drop your existing plan.  Please note that if you are in a Medicare Advantage Plan but choose to select another prescription drug plan, you will automatically be dis-enrolled for your Medicare Advantage Plan and returned to original Medicare.

I’m sure many of you have heard the commercial on the radio featuring Shirley Caesar.  During the commercial, she is advertising Medicare’s Open Enrollment period and she discusses new benefits for individuals that find themselves in the “doughnut hole.”  The “doughnut hole” refers to the gap between what your Medicare Part D pays (including your copay and deductibles) for prescription drugs and your total drug costs for the year.  This gap has to be covered by the individual.  This is bad news for people who are on a fixed income (i.e., social security) because prescription drugs can be very expensive.  In 2011, once your total drug costs exceeded $2,840, you are considered in the gap.  That may seem like a lot of money, but if you have a couple of maintenance drugs (e.g., blood pressure, diabetes, etc.) you can easily spend your coverage in no time.  This is simply scratching the surface.  If your doctor prescribes a drug that does not have a generic alternative, the costs to the individual are even higher. 

As a result of the Health Care Reform Law, there is some relief for individuals that find themselves in the gap.  In 2011, instead of paying the entire amount of the drug costs that exceed your benefit, you are now only required to pay 50% of the cost of brand-name drugs and 93% of the cost for generic drugs.  According to AARP, the companies that manufacture the brand-name drugs will pick up the remaining 50% of the cost, and the federal government will pay the outstanding 7% associated with generic brands.  This will provide some much needed relief, but the following are a few steps that can keep your prescription drug costs low:

1. Always ask for the generic option for a prescription drug, and challenge your doctor if he/she prescribes a brand-name drug.  Your health is important, but you don’t want to have to choose whether or not you eat or purchase your medicine.  The cost of the prescribed medication may not be at the “top of mind” for your doctor; advocate for yourself and your loved ones.  In most instances, there are alternatives.
2. Seek discount drug plans for your generic prescriptions.  For example, Walmart has a significant number of generic brands that are $4 for a 30 day supply and $10 for a 90 day supply.  A link to the applicable brands is included here:  Walmart Prescription Drug Plan. 
3. Consider using mail order drug plans.  The benefits of mail order drug plans include convenience and affordability.  Mail order drug plans are typically cheaper than using a regular pharmacist, and your prescriptions are delivered right to your door.  Additionally, most mail order prescriptions are set for a 90 day supply.  One key benefit of mail order plans is that participants are usually more consistent in taking their medications because they don’t have to remember to make a trip to the pharmacy.

As you can see from the information above, the open enrollment process for Medicare is not “black and white.”  In the “circle of life” there are times when children have to step up and help their parents.  If you have elderly parents, assisting them with the open enrollment process may be one of those times.  At a minimum, inquire with them to see how the process is going.  I hope this post has been informative.  Most of us will be spending time with our loved ones over the Thanksgiving holiday, which may be the perfect time to offer your assistance.  For more information on Medicare, visit www.medicare.gov or call 1-800-MEDICARE.