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The ‘skinny’ on Medicare this time of year

There are certain dates in early December concerning Medicare that involve various enrollment periods scheduled. Most people approaching age 65 or those already on Medicare are well aware of these dates. But for those that are not, here is up to date information as to how these options play out:

Medicare Open enrollment. This is time each year when you can elect to leave Original Medicare (Parts A and B) for a Medicare Advantage Plan (Part C)as well as add (or change) your prescription drug coverage (Part D). You can also elect to get out of a Part C plan and go back to Parts A and B during this period, as well. If you have not made a decision concerning this by Dec. 7, you will have to wait until next year for the next enrollment period cycle.

Dec. 8: Annual enrollment period begins for 5-star plans. Pay note: this is a new option. As you probably know, Part C and Part D plans are assigned ratings. Beginning Dec. 8th, a 365-day window opens for an applicant to enroll in a 5-star Part C or Part D plan. You can do this one per 365 days. In order to find these 5-star plans you need to visit the website: www.medicare.gov/find-a-plan.

Disenrollment: This is the period of time from Jan. 1 to February 12th whereby if you joined a Part C plan in late 2011 and want to reverse that decision, you can back out of that Medicare Advantage plan during this window of time and go back to Original Medicare with a stand-alone Prescription Drug Plan (Part D). Your Original Medicare coverage resumes on the first day of the month after the plan receives your enrollment form (either Feb. 1 or March 1, 2012). [1]

What are the key factors in deciding to enroll with Medicare Part C or Part D at the current time?

>> While premiums matter, overall plan expenses ultimately matter most. Be sure to scrutinize the copays, the co-insurance and the yearly deductibles applicable to any new coverage. Attractively low premiums might not tell you the whole story about the value of a Medicare Advantage plan. You could well be giving up more than you gain.

>> How inclusive is the plan network for Medicare Advantage coverage? Assuming the plan has one, does it include the hospitals you would choose and the physicians that now treat you? This is critically important.

>> Regarding Part D coverage, how wide-ranging is the prescription drug coverage? Look at the list of approved drugs (known as 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. That being; drugs on this year’s list may not always be on next year’s list.

>> The is one nice thing to note about Part D coverage for 2012. Medicare beneficiaries who enter the coverage gap for prescription drugs next year (sometimes referred to as “the doughnut hole”) will end up paying just 50 percent of the price of name-brand drugs and just 86 percent of generics. Additionally, some Part D plans may help you realize greater savings via discounts. [2]

Part B premiums are rising — but not drastically. Premium rates were expected to increase given the 2012 cost-of-living adjustment for Social Security benefits but the hike isn’t as dramatic as some seniors feared. Monthly Part B premiums are going up by $3.50 a month next year to $99.90 — sounds like a Wal-Mart pricing scheme — well under the $106.60 estimate projected earlier this year by Medicare trustees. [3]

Medicare Advantage premiums may fall. The Department of Health and Human Services estimates that Part C premiums will be 4 percent less in 2012 than in 2011. It also projects that Part D premiums will stay about the same in 2012. [2]

A Parting Shot for December — A recent article in the Clarion-Ledger of Jackson provided some interesting insights into Christmas shopping and staying out of debt. According to a credit counseling group called CredAbility, credit card users spend 30 percent more for holiday purchases than people on a cash-only budget. Unfortunately, Mississippi carries the highest credit card delinquency rate in the country. The article further quoted that “purchasers using credit cards could end up paying more for discounted gifts if they can’t make their monthly payments.” How Insightful? Let’s get real. You don’t have to be a rocket scientist to figure out these simple facts. Will Rogers once asked about the perils of debt commented “America is prosperous on the whole, but how much prosperity is there in a hole?” As it relates to credit card debt, the hole can be dark and treacherous for Mississippi consumers.

Information and opinions expressed are those of the author. Some material provided for this article furnished by Peter Montoya, Inc.

[1] – www.miamiherald.com/2011/10/ 07/2443864/medicare-open-enrollment-navigating.html. [10/07/11]

[2] – www.mysanantonio.com/health/ article/Medicare-s-enrollment-ceadline-is-quickly-2272605.php … http://www. mysanantonio.com/health/article/Medicare-s-enrollment-ceadline-is-quickly-2272605.php [11/16/11]

[3] – www.freep.com/article/20111028 /NEWS07/110280392/Medicare-premiums-go-up-not-high-expected [10/28/11]

Ike S. Trotter, CLU, ChFC, is a financial advisor in Greenville. Securities and investment advisory services provided through Woodbury Financial Services Inc., Member: FINRA, SIPC and Registered Investment Advisor, P.O. Box 64284, St. Paul, MN 55164. Tel: 800.800-2638. IKE TROTTER AGENCY, LLC, and Woodbury Financial Services are not affiliated entities. Information and opinions expressed are those of the author and not necessarily those of Woodbury Financial Services Inc.


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