The open enrollment period for 2013 Medicare plans begins October 15 and extends through December 7. This annual ritual asks more than 50 million people, mostly seniors, to venture forth once again into the arcane and complex world of Medicare health insurance—Parts A, B, C, and D, drug formularies, shifting co-pay, coinsurance, and deductible rules, and now, a growing assortment of health reform changes.
Is it any wonder that many seniors shudder at the prospect of actively shopping for new Medicare insurance providers? Instead, they tend to stick with their current insurance plans, while experts and pundits (like me) lament how much money they could be saving if only they shopped around like they do for most other consumer purchases.
"Not a lot of people are switching plans," observes Mary Dale Walters, senior vice president for Allsup Medicare Advisor. Allsup provides fee-based Medicare coverage advice to consumers, and does a lot of its business with disabled people. The bad news about Medicare's complexity has been good news for Allsup, which reports that its advice business has been growing steadily.
Medicare consumers "ride out the price increases," Walters adds. "They don't do the math. They are worried that their doctors won't be covered under a new plan ... People bog down in indecision because they're scared they are going to make a mistake." While many things change about Medicare each year, Walters says, "the only thing that doesn't change under Medicare is that it continues to be complicated."
Avalere Health, a Washington D.C., healthcare research firm and consultancy, has looked at 2013 Medicare plans and found that seven of the 10 most popular plans were raising their drug prices by more than 10 percent. Dan Mendelson, president of Avalere, says it's particularly important for consumers to look at the prices of their prescription drugs, including co-pays, and see if it makes sense to switch plans.
In addition, he adds, more health plans are developing partnerships with preferred pharmacies. "You get your drugs more inexpensively if you purchase them from a preferred provider," Mendelson says. This is yet another reason consumers should look at the drugs they take and compare prices from other health plans.
Health reform changes will reduce the price of drugs for seniors with big drug bills who fall into what's called the doughnut hole. Once drug expenses hit $2.970 in 2013, insurance coverage ceases until a person's out-of-pocket expenses reach $4,750. The health reform law has been lowering the cost of drugs inside the doughnut hole. For 2013, consumers must pay 52.5 percent of the cost of branded drugs and 79 percent of the cost of generic drugs. These percentages will decline in future years under the law.
While the open enrollment period ends in December, Walters notes that this restriction does not apply to plans that have received top marks under the government's relatively new rating system. Plans with a 5-star rating may enroll consumers at any time during the year. Because of the newness of the program, there were few 5-star plans for 2012 enrollments. But the number is expected to increase.
Overall, Mendelson and Walters agree, premiums for fee-for-service Medicare (parts A and B) should not rise much in 2013, and premiums for managed care Medicare Advantage plans (part C) should change very little.
"The general feeling is that there is not going to be major increases in premiums," Walters says. "If your premiums aren't changing much, make sure your co-pays aren't changing much, either."
"It's reasonable to expect that the part B premiums (for physician and outpatient services) will be going up in the range of 5 to 10 percent next year," Mendelson says. Medicare is expected to announce part B costs for 2013 soon, but a spokeswoman declined to specify a date.
Both experts advised consumers with traditional fee-for-service Medicare plans to take a careful look at Medicare Advantage (MA) plans. "The care coordination is often better and the prices are often much more stable," Mendelson says. "People don't have to worry as much about out-of-pocket costs. MA plans structure their premiums differently and you're generally not paying a 20 percent co-pay on physician services." Accepting restrictions on the choice of physicians may be unacceptable for some traditional Medicare users, he notes.
Walters advises people to have their own plan for healthcare services before they begin looking at the plans for the 2013 enrollment process. "You really need to begin with a needs assessment," she says. "Focus on those things that you have already identified as being important to you."
This list usually contains specific prescription drugs but should also include expected medical visits for routine care as well as care for any ongoing illnesses or health needs. Do you need regular blood work and other laboratory services? Are there predictable surgeries? Have you factored in the expanding range of free preventive health services under the health reform law?
Once you've developed your needs list, Walters says, it's much easier to use the Medicare website or specific insurer sites "without being overwhelmed by all the options" that are available.