Navigating Medicare open enrollment

Medicare is a federal health insurance program for those 65 and older, and some younger adults with disabilities and those with end-stage kidney disease.

The Medicare open enrollment period began October 15 and runs until December 7. During this time everyone with Medicare can join or change their health and prescription drug plans for the coming year. Plan costs and coverage change each year, making it wise to be sure a plan still meets health needs and budget.

It may be possible to find better coverage or lower premiums for 2014. Beneficiaries should have already received the "Medicare and You" 2014 handbook and information from their current health and drug plans about changes for 2014.

Medicare consists of different parts. Medicare Part A (hospital insurance) provides coverage for no monthly premium if you or your spouse paid Medicare taxes while working. If one doesn't qualify and has to buy Part A, the monthly premium will be $426 in 2014. Part A covers charges for stays in inpatient hospital, skilled nursing facility, inpatient mental-health facility, and hospice care. The deductible for each benefit period will be $1,216.

Medicare Part B (medical insurance) requires payment of a monthly standard premium that is the same for everyone. However, if the modified adjusted gross income as reported on the IRS tax return from two years ago is above a certain amount, it may cost more. The cost can change each year depending on a person's income. If limited income and resources are a consideration, the state may help pay for Part A and/or Part B.

If enrollment in Part B does not occur when it is first available, there is usually a late-enrollment penalty that applies every year. In 2014 the monthly premium will be $104.90 and the deductible will be $147 a year, same as in 2013. Part B covers clinical laboratory services, inpatient and outpatient doctor services, outpatient therapies, durable medical equipment, some screenings and preventive services, outpatient hospital services, and some home-health services.

Parts A and B are often referred to as Original Medicare. Part C provides options to having Original Medicare. These are known as Medicare Advantage Plans, and are administered by private insurance companies that determine the cost of covered services received. The plans establish the amounts they charge for premiums, deductibles, and services.

The amount paid by the consumer to the plan may change only once a year, on January 1. Out-of-pocket costs depend on a number of factors and can vary from plan to plan, making it important to review the plan's annual Evidence of Coverage (EOC) and Annual Notice of Change (ANOC) that should be mailed out in September. Medicare Advantage Plans are available with and without drug coverage.

Part D (prescription drug coverage) monthly premiums vary by plan, and higher-income consumers may pay more. If sign-up for Part D is not done when first eligible, or if it is dropped and picked up later, there may be a late-enrollment penalty that increases the cost of the premium as long as Part D is in force. Drug plans are offered by a wide variety of private insurance companies. They have varied premiums, deductibles and formularies (the list of prescription drugs covered). The easiest way to shop for Part D coverage is to visit MyMedicare.gov, click on Find Health and Drug Plans, and follow the instructions.

A guide when considering Part D plans is the Four C's (cost, coverage, convenience/access and customer service).

• Cost - What's the total projected annual cost of the plans being considered? How much are the monthly premiums? Other costs (copays, coinsurance, deductibles)? Did you enter the Coverage Gap in 2013?

• Coverage - Do the plans being considered cover all the drugs needed in 2014? If you received a formulary exception this year, what will happen in 2014? Do you want to have your health care and prescription drugs covered by a single plan? If so, then review Medicare Advantage plans. What is the star quality rating for each plan being considered?

• Access - To what extent will the plans under consideration restrict access to medications through step therapy (trying a less-expensive drug first), prior authorization (written request from a physician asking for coverage and having the insurance company approve the request), or quantity limits (on number of pills or refills)? Can a prescription be obtained at a preferred price at the consumer's pharmacy of choice? Is mail-order delivery available? Are prescriptions easily obtained while away from

home?

• Customer Service - How responsive are the plans under consideration? Is it easy to reach a human on the phone?

The co-pays and deductibles that are the responsibility of the Medicare beneficiary can quickly add up, particularly if a hospital stay or extended treatments are needed. To cover those costs, consideration can be given to purchasing Medigap or supplemental insurance. It is available from private insurance companies and there are a variety of plans available. Each plan offered must cover the same things offered by all the other companies, i.e. Plan J is the same coverage across all providers.

Medicare provides important benefits such as free preventive services, free annual wellness visits, and discounts and better coverage for prescription drugs in the coverage gap known as the "donut hole."

This means there's a temporary limit on what the drug plan will cover for drugs.

Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. In 2013, once you and your plan have spent $2,970 on covered drugs (the combined amount plus your deductible), you're in the coverage gap. This amount may change each year. Also, people with Medicare who get extra help paying Part D costs won't enter the coverage gap.