7 Medicare 2011 Enrollment Tips

Changes in plans, rates, and availability in 2011 make it worthwhile to carefully review your choices.

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This year's enrollment period for 2011 Medicare coverage extends from November 15 to the end of the year. There are lots of changes in the various insurance programs that collectively make up Medicare. Experts say it's well worth the time to make sure your 2011 coverage remains the best deal for you.

There are four "letter" parts of Medicare: A is for hospital services, and B is for physician, out-patient, and equipment costs. Together, parts A and B make up basic Medicare. Part C is for Medicare Advantage insurance, which includes A and B and, for most plans, prescription drug coverage. Part D is for stand-alone prescription drug coverage. There also are a dozen Medigap policies that cover, to varying degrees, things that aren't covered in basic Medicare. Some Medicare Advantage and Medigap policies include vision and dental coverage, which is not provided in basic Medicare. If you want to supplement basic Medicare, you would chose either a Medicare Advantage plan or a Medigap policy.

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"A lot of people don't realize how many options there are in Medicare," says Adrienne Muralidharan, a senior Medicare specialist for Allsup Medicare Advisor, a fee-based advisory company. "What covers your husband best may not cover you best." Before enrolling or re-enrolling in Medicare, she advises consumers to assemble detailed information on their likely healthcare needs, specifics on their prescription drugs, and a good financial understanding of what they can afford to pay for health insurance. Julie Finkel, a counselor at the Medicare Rights Center, provides similar advice and notes that Medicare is not a monolithic one-size-fits-all insurance program, but one that can be precisely tailored to an individual consumer's needs. This customization, however, takes effort and time.

There is an extensive network of fee-based and free resources to help with Medicare enrollment. Medicare has seven call centers throughout the country and expects to field 5 million enrollment calls to its main number, 1-800-MEDICARE (1-800-633-4227); it has beefed up staffing to a total of nearly 4,000 customer service representatives. The State Health Insurance Assistance Program (SHIP) offers local Medicare counseling and assistance, as does the network of 600 area agencies on aging around the country.

The Medicare Rights Center is a leading non-profit that provides enrollment counseling. There are many fee-based companies that offer Medicare assistance as well. Allsup, for example, has three assistance plans that range in price from $75 to $350. Health insurers also provide help but may naturally be biased towards their own policies.

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Coverage Rates. For most existing Medicare beneficiaries, the premium for basic Medicare Part B will remain $96.40 a month (Part A is free). The rate is tied to Social Security payments. Because there has been no increase in the Social Security cost of living adjustment (COLA) for 2010 and 2011, the Part B rate stays the same for existing beneficiaries. People who were new to Medicare in 2010 did not qualify for the rate freeze and had to pay $110.50 a month this year; they will continue to pay that same premium in 2011. People who are new to Medicare in 2011 will pay a monthly premium of $115.40. Individuals who have more than $85,000 in taxable income ($170,000 if filing a joint return) pay higher premiums on a sliding scale, beginning at $161.50 per person a month up to a maximum of $369.10

The Kaiser Family Foundation estimates that monthly premiums for Part D stand-alone prescription drug plans will rise by 10 percent, on average, to $40.72 in 2011. This assumes beneficiaries stay with their 2010 plans. Many experts advise consumers to shop around. For Medicare Advantage policies, Kaiser projects relatively modest price increases, with premiums rising about $2 a month to an average of $43. This is what's called an enrollment-weighted premium, meaning that Kaiser has looked not only at insurance plan rates but at the numbers of people in the plans. Plans with larger enrollments have more weight when projecting average premiums. All insurers offering Medigap plans must charge the same rate for comparable coverage. Medicare has an online tool that will allow access to local Medigap policies and rates by ZIP code.

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Restrictions on plan changes in 2011. Historically, Medicare annual enrollment extended from November 15 through the end of the year, and was followed by an open enrollment period that extended through March 31. Consumers could make a lot of changes to their plans during open enrollment, switching from Medicare Advantage into Medicare, or from Medicare into Medicare Advantage. They also could switch from one Medicare Advantage Plan to another. Beginning next year, that's no longer true, a Medicare spokesman explains. Under the more restrictive rules, people only can switch from Medicare Advantage plans into traditional Medicare. They can't choose another Medicare Advantage plan and Medicare beneficiaries may not shift into Medicare Advantage. Also, the open enrollment period has been cut in half and will extend only from January 1 to February 15.

Preventive Services. Under the new health reform law, annual physicals and many other preventive services may be offered at no charge. You do not need to have satisfied any deductible to receive such services and there is no co-pay. Available preventive services can depend on age and specific health conditions. This change could affect costs and features of your insurance, and might influence the annual deductible that makes sense to you.

Medicare Advantage. There will be 13 percent fewer Medicare Advantage plans offered in 2011, Kaiser says, but consumers should still have an average of 24 plans to choose from in their home county. Most plans are HMOs and most offer drug coverage. Medicare is requiring plans for the first time to limit consumer out-of-pocket costs to no more than $6,700 but most policies will offer much lower limits. Under provisions of the health reform law, Medicare Advantage policies cannot have higher cost-sharing terms than basic Medicare for certain procedures, including chemotherapy, renal dialysis, and skilled nursing care. Experts say some Medicare Advantage policies have masked their true costs with low premiums but high cost-sharing rules.

Donut hole. This gap in prescription drug coverage requires some people to pay thousands of dollars in drug costs after reaching a threshold level. Under health reform, this gap will be closed by 2019. In 2010, affected seniors got $250 checks to help defray donut hole expenses. Next year, 50 percent of the cost of brand-name drugs will be covered for consumers "in" the donut hole. This change could trigger coverage changes in Medicare Advantage policies that provide donut-hole protection. In 2011, Medicare says, the donut hole will be entered once drug expenses (which include covered costs and out-of-pocket payments) have exceeded the Medicare Part D plan's initial coverage limit of $2,840; it will end when total out-of-pocket spending has reached $4,550.

Medigap plans. There are 10 sets of prescribed coverages: A, B, C, D, F, G, K, L, M, N (gaps between letters reflect discontinued plans). The plans fill holes in basic Medicare to different extents. The primary variables involve deductibles for Part A and B coverages, coverage of the 20 percent co-insurance payment, emergency care fees, and medical treatment outside the United States, which is not covered by basic Medicare. Beginning last June, all Medigap plans changed. The primary reason, Allsup says, is the expansion of free preventive services under Part B of Medicare. The discontinued Medigap plans—E, H, I and J—duplicated other plan offerings or prescription drug coverage available under Medicare Part D. The two new Medigap plans—M and N—are high-deductible Medigap plans offering lower premiums but higher out-of-pocket costs.

Medicare.gov. The online Plan Finder tool at the Medicare website has been changed so that drug plans under Medicare Advantage and stand-alone Part D coverage can be compared side-by-side, the agency says. This will avoid going through the tool twice. The agency recommends that consumers complete a personalized plan rather than simply providing their ZIP code. Before beginning the Plan Finder session, it said consumers should have their ZIP code, Medicare number, effective date of their basic Medicare coverage, their date of birth, their specific drug needs (including name, dosage, and frequency), and the local pharmacies they want to use for prescriptions. Medicare has integrated its five-star quality rating system of health plans into the Plan Finder. Consumers can see the quality rankings of plans, including a special icon that is being introduced to highlight poor-performing plans.

The Medicare Rights Center goes online with consumers to help them successfully enroll in Medicare. A counselor says the tool is excellent but can be confusing, and doesn't always explain some key decisions that consumers need to make. Near the beginning of the process, for example, is menu choice that asks whether a consumer already gets financial help from Medicare. Many consumers don't know if they receive such help but the answer to this question can influence their plan choices later in the enrollment process. Also, when filling in prescription drug needs, the Plan Finder saves completed choices and provides consumers a personalize drug identification number. Save this number to avoid having to automatically fill in drug information in any future use of the Plan Finder.

Tthe final step of the four-step process permits consumers to refine their plan results. This step includes a series of very important choices presented in pull-down menus on the left of the page. They include your preferred limits on monthly premiums and the annual deduction on drug expenses. The lower you set these variables, the fewer plan choices the Plan Finder will display. It may make sense to experiment with these variables and see how they affect plan choices. In addition to identifying local pharmacies, the counselor said it's a good idea to also request mail-order pharmacy pricing, which might offer lower prices.