Medicare changes and costs outlined
December 29, 2010
Among the changes that take effect in 2011:
-- Higher-income people will pay a premium surcharge for Medicare Part D, the voluntary prescription drug program.
-- Part D participants will get a discount on drugs if they are in the so-called doughnut hole.
-- Everyone in Part B will get a free wellness exam once a year, and it won't be subject to the part B deductible. Today, they get only one free exam, subject to the deductible, when they first enroll.
-- Medicare Part B participants will pay nothing out-of-pocket for a range of preventive services.
-- The income limits over which people pay a surcharge for Part B -- and starting next year Part D -- will no longer be indexed for inflation. Instead, they will be frozen at 2010 levels from 2011 through 2019. As incomes rise over time, more people will be hit with surcharges.
-- Some Medicare Advantage plans are being eliminated. Those affected have until Dec. 31 to choose a new one.
Here's a closer look at the changes. Be aware that there are exceptions to almost every rule. For more information, call (800) 633-4227 or download the Medicare and You 2011 Handbook at www.medicare.gov.
Part B premiums
Medicare Part B is a voluntary insurance program that covers doctor's visits and outpatient services. Thanks to low inflation, most people who have Part B premiums deducted from their Social Security checks will pay $96.40 a month in 2011 for a fourth straight year.
People who enrolled in 2010 or will enroll next year will pay $110.50 or $115.40 per month, respectively.
Part D surcharge
Starting in 2011, people who are subject to the Part B surcharge will also become subject to a Part D surcharge, ranging from $12 to $69.10 per month depending on income.
People will pay their regular Part D premium to their insurance company and the surcharge to Medicare. The surcharge will usually be deducted from Social Security checks.
Today, people in Part B usually pay 20 percent of the Medicare-approved cost of most services after their deductible for the year has been met.
Starting next year, they will pay nothing (no co-payments, co-insurance or deductibles) for certain preventive care services at certain intervals, as long as they get them from a health care provider that agrees to charge Medicare-approved prices.
These services include an annual wellness exam. Medicare will provide a complete list of free services next year on its Web site.
Medicare Advantage plans will not have to provide these services at no cost, although most already offer some free preventive care.
Filling the hole
In Part D, when your drug costs for the year -- including what you and the insurer pay -- hit a certain level, you enter the doughnut hole. The level is $2,830 in 2010 and $2,840 in 2011.
Once in the hole, you pay all of your drug costs. When your out-of-pocket drug spending for the year hits $4,550 (in 2010 and 2011) you exit the doughnut hole, and your drug plan pays for most of your covered drugs for the rest of the year.
In 2011, people in the doughnut hole will get a 50 percent discount on almost all brand-name prescription drugs and a 7 percent discount on generic drugs.
People with a low-income subsidy or drug coverage through a retiree plan are not eligible for the discount.
Medicare Part A (which covers hospital stays) and Part B are known as original Medicare. Many people with original Medicare buy a Medigap policy to cover what Parts A and B do not.
Instead of enrolling in original Medicare, some seniors buy Medicare Advantage plans from private insurers.
The health care reform laws required companies to eliminate Medicare Advantage plans that were duplicative.
People whose plans will be axed should have received a notice in October. They have until Dec. 31 to choose a new Medicare Advantage plan or original Medicare. Those who choose original Medicare can buy a Medigap policy, regardless of their health. They should also enroll in a Part D drug plan.
People who do nothing will be enrolled in original Medicare.
Every senior can change health and drug plans once a year during open enrollment, which ends Dec. 31. You can switch from Medicare Advantage to original Medicare, or vice versa, or from one Medicare Advantage plan to another.
However, if you switch from Medicare Advantage into original Medicare, you will not be guaranteed a Medigap policy unless your Medicare Advantage plan was eliminated. You may also need to enroll in a new drug plan.
Need help choosing a plan? You can get free, objective advice from the state Health Insurance Assistance Program in your area. Look it up online.
E-mail Kathleen Pender at kpender(at)sfchronicle.com
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