As open enrollment season for Medicare draws near, be sure to take next year’s changes into account as you consider your options.
Starting October 15 and ending December 7, people with Medicare will have a chance to change plans or stick with their existing coverage. Even if you are happy with your current Medicare coverage, it’s important to reevaluate and compare the alternatives. Individual plan costs and benefits can change often. These Medicare changes that will take effect in January may impact your decision.
Here’s what you need to know to help find the Medicare coverage that’s best for you.
New Medicare Advantage (Part C) Benefits in 2020 and Beyond
Medicare Advantage plans are sold by private insurers who offer the same coverage as Original Medicare. These plans often offer extra benefits such as vision and dental.
Starting last year, new government rules allowed Medicare Advantage plans to offer benefits beyond strict medical care. The changes opened the door to coverage of services such as adult daycare, home-based care, caregiver support, pain management, and safety devices.1 Although the rule changes came late in the year in 2018, few insurers had time to integrate these changes into their 2019 plans before the October 1 filing deadline.
This year, however, a large number of Medicare Advantage plans are expected to include additional benefits. In addition, the government is allowing even more non-medical benefits for plan year 2020, especially for people with chronic illnesses.
According to data from Medicare Advantage insurance company filings outlining their 2020 plans reported in the Washington Examiner, insurers are offering coverage for a broad range of services including grab bars, nutritional advice, rides to doctor appointments, acupuncture, massage therapy, and service animal support.2 However, there are significant limitations: plans generally limit beneficiaries to choose one benefit per year.
Keep in mind, however, that unlike the uniform medical coverage offered to everyone enrolled in any type of Medicare plan, these expanded benefits are not available to everyone. Before you sign up for one of these expanded plans, be sure you know the limits involved, warns David Lipschutz, senior policy attorney at the Center for Medicare Advocacy.
Medicare Part D 2020 Changes
There are two important changes that can have an impact on how much you pay for prescription drugs.
The first change: The donut hole closed completely, as of January 1. Contrary to popular opinion, this does not mean drugs will be free.
The donut hole is officially known as the Coverage Gap. Insurance companies pay little or nothing in this stage. In the early days of Part D drug coverage, seniors had to pay the full cost of any medication, once they reached this stage. The Affordable Care Act started closing the donut hole in 2012 with discounts on medications.3 Now, that the donut hole is closed, you will pay 25% of the cost for any medication.
There can be sticker shock. For example, initially, you might pay $5 for a medication that has a full cost of $100. Once your total drug costs (what you and the drug plan have paid) reach $4,020, you enter the Coverage Gap. Then, the full cost of the drug determines how much you’ll pay. Instead of $5, the bill will be $25.
The second change: The amount you must pay until you can exit the donut hole increased substantially. Last year, that limit was $5,100. This year, you stay in the donut hole until your total costs reach $6,350.
In the last payment stage, Catastrophic Coverage, beneficiaries can see a drop in costs. They pay the greater of $3.60 for most generics and $8.95 for brands or 5%. In 2017, 1 million beneficiaries reached that stage.4
Medicare beneficiaries should heed some basic advice to make sure they receive insurance coverage for the prescription drugs they need. Most important, look for changes in your Medicare prescription drug plan. Don’t assume that your plan’s formulary, the list of prescription drugs covered by your Part D or Medicare Advantage plan, is permanent. These lists change every year.
Before the October 15 Open Enrollment Period, you should receive a notice of plan changes. Be sure to check this document carefully or call your insurer to determine if your medicines are still covered, advises Leslie Fried, senior director of the Center for Benefits Access at the National Council on Aging.
Changes to Medigap in 2020
Many people who choose Original Medicare instead of Medicare Advantage purchase Medicare Supplement insurance, also known as Medigap. There are 10 active Medigap plan types, which are identified by letter – like Plan D, Plan K, or Plan M. Medigap helps cover premiums, copayments and additional out-of-pocket costs that Original Medicare doesn’t cover.
Under new rules, Medigap Plans C and F will no longer be available for most people who are enrolling in Medicare for the first time on or after January 1, 2020. The exception is for people who were 65 or older on January 1 and thus eligible for Medicare, but who had not yet enrolled. These two plans had been very popular, since they’re the only two options that still cover the Medicare Part B deductible ($198 per year in 2020).
If you are already enrolled in Plan C or Plan F, you will still be covered for life. There is no need to take action if you are happy with that coverage.
By the same token, if you enrolled in any type of Medicare before January 1, 2020, you can still join Plan C or Plan F in the future, assuming you qualify. “These plans are not going away, they are not being eliminated and people in them do not have to make any changes,” says Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center.