Annual enrollment is the one time of year Medicare beneficiaries have the opportunity to evaluate all their options and choose the best coverage for their needs.  Medicare options can be overwhelming, which is why so many people stay in their existing plans.  But not doing anything is a choice – and it may not be the best choice because individual healthcare needs and plan costs change.

Medicare Annual Enrollment:  Common Questions

1.  What are the biggest Medicare plan changes for 2011?

Some of the biggest changes come from the healthcare reform law, known as the Patient Protection and Affordable Care Act of 2010 (PPACA), and changes affect:

Medicare Part B, which now will cover preventive care.  As a result, people will no longer have to pay deductibles or co-pays for certain preventive services, such as wellness visits.

Prescription drug plans, which now will provide Medicare beneficiaries with a 50% discount for the cost of brand-name prescription drugs and a 7% discount for generic drugs they take while in the prescription drug donut hole.  The gap in coverage (or “donut hole”) occurs in 2011 after an individual incurs $2,840 in prescription costs.  The person is then responsible for all costs until catastrophic coverage starts, which begins at $6,448 for combined drug costs.

2.  How will my options change for 2011?

Most people will have fewer plan options, specifically:

  • About 13% of Medicare Advantage plans have been eliminated.  Even so, more than 2,000 plans are available nationwide, and the average beneficiary can choose from about 24 plans in their local area.  About 11.8 million people used Medicare Advantage plans in 2010, and insurers predict a 5% increase in people electing Medicare Advantage in 2011, according to the Centers for Medicare & Medicaid Services (CMS).
  • About 30% of prescription drug plans have been discontinued.  However, more than 1,100 plans will be available, and the average beneficiary can choose from 33 plans.

3.  How will costs change for 2011?

The average monthly Plan B premium for first-time enrollees is $115.40.  Most existing beneficiaries will continue to pay a monthly Part B premium of $96.40 or $110.50 (if initially enrolled in 2010).  Any beneficiaries earning more than $85,000 as single filers or $170,000 as joint filers will pay more, from $161.50 to $369.10 for high-income earners.

Prescription drug plan premiums are expected to increase by $1 on average, reaching $30, the CMS reported.

Medicare Advantage plan premiums are expected to decline 1% based on CMS data.  In addition, all Medicare Advantage plans available for 2011 are required to limit out-of-pocket expenses to $6,700.  More than one-half of plans are capping out-of-pocket costs at $3,400, providing beneficiaries with added protection against unexpected costs.

4.  Why would I want to change plans?

Reasons people change plans include:

  •             You are unhappy with your existing coverage or provider.
  •             Your health has changed.
  •             Your plan is discontinued.
  •             Your current plan has changed and no longer meets your needs.  For example, certain prescription medications have been dropped from your coverage.

 Comparison shopping can provide significant savings, as with other types of insurance.  Add up your total costs for 2010, including premiums, co-pays and deductibles.  If you paid more than you expected or your treatment wasn’t covered – you should explore other plans that may better meet your needs.

5.  What changes can I make during annual enrollment?

You can:

  •             Move from one Medicare Advantage plan to another.
  •             Move from traditional Medicare to a Medicare Advantage plan or vice versa.
  •             Add a Medicare prescription drug plan if you do not have prescription drug coverage or change Medicare prescription drug plans.

6.  If I decide to change plans during annual enrollment, what do I need to do?

You need to identify and enroll in the new plan before January 1, 2011.  You can research the available plans and enroll on your own, or you can use the experienced help of an independent Medicare plan selection service.  Because most people have dozens of plans from which to choose, using an objective Medicare specialist who helps identify the best coverage for their needs and assists with Medicare enrollment can make the process much easier.

7.  Where can I get more information?

All Medicare beneficiaries enrolled in a Medicare plan should receive annual enrollment information from their Medicare Advantage or Medicare Part D plan provider.  Additionally, Medicare beneficiaries should receive a copy of the 2011 Medicare & You book from the CMS. 

This article reprinted with permission from the ElderLaw Advisor, a publication of Nale Law Offices, 44 Main St., Waterville, Maine  04901