Call 480-706-1702
For a FREE In-House Quote

Medicare Part D

Medicare Part D Premiums Will Jump In 2011

For Medicare enrollees who are hoping to catch a break on their prescription drug costs, 2011 doesn’t hold out much promise. Industry analysts say that most major Part D prescription drug plans will increase their premiums for coverage in the 2011 year. Right now, Medicare Part D enrollees pay about $32 on average per month for prescription drug benefits, but a study conducted by Avalere Health says Part D subscribers should plan to pay about 10% more for prescription coverage in 2011.

Part D premiums aren’t limited, so some prescription drug plan costs could rise much more than average. The study cites one plan whose premiums will increase by nearly half for 2010. Avalere Health reviewed the top 10 Part D prescription drug plans, which serve about 70% of beneficiaries who are enrolled in the optional coverage plans.

The study also estimates that about 3 million Part D subscribers will need to switch their current Part D plan for 2011. Most of those beneficiaries should be able to find comparable coverage with their current provider, but about 300,000 beneficiaries may need to find a new provider altogether. Federal regulations require that Part De providers consolidate coverage into “non-duplicative plans” but some industry analysts say that consolidation may mean some beneficiaries will see higher premiums if they stay with their current insurer.

The AARP will eliminate its MedicareRx Saver plan, requiring about 1.5 million subscribers to enroll is the organization’s MedicareRx Preferred plan, which has a premium cost that is 15% higher than the Saver plan. Those already enrolled in the Preferred plan will see a drop of about 11% in the cost of their annual premiums.

The Centers for Medicare and Medicaid Services say the concern could be nothing more than a tempest in a teapot. According to the agency’s figures, most Medicare Part D subscribers will see an average increase of no more than 3% (about $1) per month in their premium costs, even if they need to switch plans.

One reason for the increase in premiums is the improved “gap” coverage beneficiaries will receive beginning in 2011. In the past, seniors who exceeded pre-established spending limits on prescription drug benefits had to pay the entire cost of their prescriptions until they became eligible for catastrophic drug coverage. Beginning this year, those who exceed the plan limits on spending will be eligible to buy prescription drugs at a reduced rate while in the coverage gap. By 2020, the gap should be entirely eliminated.

Medicare Advantage Premiums To Decrease For 2011

In something of a surprise announcement, Donald Berwick, Director of the Centers for Medicare and Medicaid Services, says that premiums for Medicare Advantage plans will decrease slightly in 2011. Berwick says that the monthly costs for MA plans for more than 11 million enrollees will drop by about 1%. In addition, enrollees should see some relief from the cost of prescription drugs and the continuation of certain no-cost preventative health care services.

In 2009, premiums for Medicare Advantage plans increased by an average of 15%. Berwick and other Medicare officials say that the health care reform act has provided the Medicare and Medicaid Service with additional negotiating power. Initially, officials used their newfound clout to drop about 300 previously approved Medicare insurance plans offered by private providers. According to Medicare officials, the rejected plans increased out-of-pocket costs without increasing benefits or covered services.

Most of the insurers then modified the plans to provide additional services at reduced costs. Upon reconsideration of the new offers, Medicare approved most of the 300 rejected plans. Fewer than ten of the original 300 rejected plans did not modify their initial proposed coverage, improve their benefits or reduce beneficiaries’ proposed out-of-pocket expenses. Upon review, these plans were rejected a second time and will not be offered in 2011.

Some analysts say that insurance providers are more willing to negotiate with Medicare because they are more dependent now upon Medicare premiums than they had been in the past; a large number of new enrollees are expected in the next decade; and the new health care legislation will open new opportunities for providers in the coming years.

Seniors who have elected Medicare Part D (prescription drug coverage) can also expect to see some decreases in their out-of-pocket expenses if they have significant prescription costs in 2011. The relief comes as part of the Obama Administration’s effort to eliminate the “donut hole” gap in Medicare prescription drug coverage. Reduced out-of-pocket expenses for Part D benefits will not translate into lower Part D premiums, however. Part D premiums are expected to rise in 2011 for most prescription drug plans.

Medicare Part D Plans See Modest Premium Increase For 2011

Medicare says that its Medicare Part D recipients can expect to see an average premium increase of $1 per month for 2011. Despite the premium increase, changes to the Medicare Part D program will mean that many seniors will pay less overall for prescription drug coverage in 2011. The premium increase is comparable to those seen in previous years. The Medicare Part D program was introduced in 2006.

Private insurers have supplied Medicare with their bid prices for 2011 prescription drug coverage, and the agency expects to make these costs available to consumers prior to the open enrollment period, which begins in November. The cost of prescription medications will drop, in part due to promises made by the pharmaceutical industry to reduce to cost of prescription drugs paid for or subsidized in part by Medicare. In addition, 2011 represents the first year of a ten-year plan to close the “donut hole” in prescription drug coverage.

Currently, Medicare recipients must pay for prescription drug costs out-of-pocket once their prescription drug spending exceeds Medicare Part D basic coverage guidelines. Catastrophic drug coverage is available under Medicare Part D plans, but that coverage doesn’t kick in until the recipient has spent more than $3,600 out of pocket on medication expenses.

Along with the lower prices for prescription drugs, the agency aims to make choosing a Medicare Part D plan easier for seniors. The effort to streamline the prescription drug coverage options may mean, however, that millions of seniors may need to find new Medicare Part D plans. The agency will roll out information about the planned Medicare Part D changes ahead of the open enrollment period for 2011.

Medicare Enrollment: Doing Nothing Can Be Costly!

If you will become age-eligible for Medicare in 2011, you may be tempted to let your Medicare enrollment slip. Perhaps you’re still employed or you have health care coverage through your spouse. Regardless of the reason, if you don’t enroll in Medicare within three months of your 65th birthday, you could end up paying a premium penalty for the rest of your life, based on when you finally enroll in the plan.

When you become age-eligible for Medicare, you have a “special enrollment period” during which you can enroll in Medicare for the first time. The special enrollment period begins three months before your 65th birthday and ends three months after your birthday.

If you don’t enroll in Medicare during the special enrollment period, you’ll be paying a permanent penalty in the form of increased monthly premiums on Medicare coverage. The penalties can vary, and they apply to all Medicare coverages for which you pay premiums. In other words, the penalty will apply to Medicare Part B, Medicare Part C and Medicare Part D premiums.

This is especially important to understand for Medicare Part D coverage. Medicare Part D coverage is optional. If you opt out for a year or two, even if you enrolled in Medicare Part A and Part B plans, you’ll still pay the premium penalty for your prescription drug coverage when you enroll in a Part D plan.

To avoid the premium penalty, many Medicare-eligible beneficiaries enroll in the lowest cost plans possible when they first become eligible. This strategy may have you spending some additional cash up front, but it will prevent you from paying potentially large non-enrollment penalties later.

One other caveat: your eligibility to enroll in Medicare Supplemental Insurance plans begins when you first become eligible for Medicare. If you choose not to enroll in Medicare at that time, you may forfeit your opportunity to enroll in a supplemental insurance plan later. If you eventually want traditional Medicare Part A and Part B coverage, examine the Medicare Supplemental Insurance plans carefully during your special enrollment period.

Health Net Ordered To Suspend Arizona Medicare Advantage Enrollments

Health NetHealth Net, a provider of Arizona Medicare Advantage plans was ordered by the Centers for Medicare and Medicaid Services (CMS) to cease Medicare enrollment in its programs on November 19. 2010.  The order is part of a sanction imposed by CMS for the improper administration of Medicare Part D plans offered by the health insurance provider.  The sanction affects enrollments in both the company’s Medicare Advantage and Medicare Part D plans, and came just days after the Open Enrollment period began for 2011.

Eligible beneficiaries who are already enrolled in a Health Net Medicare Advantage plan and do not wish to change may remain enrolled in their current plan, but may not elect new plans until the sanctions are lifted.  CMS issued an immediate suspension directed toward Health Net because the agency says that Health Net continued to misadminister its Medicare Part D and Medicare Advantage Part D plans, despite having been warned about its faulty practices during a routine audit of the program.

Health Net has more than 660,000 beneficiaries enrolled in Maricopa and Pima counties. Health Net must now demonstrate that it is in compliance with CMS regulations regarding Medicare Part D benefit administration and that it has taken sufficient steps to ensure that it will remain in compliance.  Once CMS is satisfied with the company’s changes, Health Net will again be allowed to accept new enrollments in its Medicare Advantage and Medicare Part D plans.

“Health Net takes our obligations to our Medicare members seriously,” said Jay Gellert, president and chief executive officer of Health Net, Inc. “Our priority is to help ensure our Medicare members have access to quality health care, customer service and the prescription drugs they need.”

Gellert added, “We are working closely with CMS to resolve these matters as quickly as possible. We hope in the next months we can demonstrate to CMS that we have successfully addressed the issues they have raised. We are committed to the Medicare program and look forward to serving new Medicare beneficiaries once again.”

The sanctions make it unlikely that Health Net will be available as a choice for Arizona Medicare Advantage enrollees during the 2011 Open Enrollment period, which began November 15, 2010 and closes December 31, 2010.

Free Quote or In-Home Appt.*