Medicare increases
Every year there are potential changes to Medicare. Deductibles can rise or fall, premiums and coverages can change, and even the prescriptions that they need to live life to the fullest can be affected. This year has been a year of increases across the board.
First let’s talk about the increases to Medicare Part A.
Medicare Part A – Hospital Coverage
Medicare Part A is the Hospital Portion of Medicare. For most people the Part A premium with be $0. This is because it was paid for while they were employed as a payroll deduction.
Medicare Part A has a reoccurring deductible that is increasing from $1,340 in 2018 to 1364 in 2019. This deductible covers the beneficiaries’ portion of cost share for the first 60 days of any Medicare-covered impatient care.
In 2019, after 60 days the beneficiary is responsible for a coinsurance of $341 per day for days 61 through 90 of a hospitalization within the benefit period, and $682 per day for their lifetime reserve days.
If a beneficiary requires skilled nursing, Medicare will cover all costs of the first 20 days once the deductible has been paid for that benefit period. At day 21 through 100 the beneficiary’s responsibility is $170.50 per day.
If the beneficiary, or their spouse, did not work the equivalent of 40 quarters (10 years) or has certain disabilities, they may be required to pay a premium for Part A. If the Beneficiary or their spouse did not work 40 quarters but did work at least 30 quarters they will pay a reduced rate of $240 per month in 2019.
If they have not worked at least 30 quarters or have certain disabilities the Medicare Beneficiary will be required to pay the full Part A premium of $437 per month in 2019.
Next let’s look at the increases for Medicare Part B.
Medicare Part B – Doctors Coverage
Medicare Part B is the doctors and medical side of Medicare. In 2019 most Medicare Beneficiaries will pay a premium of $135.50.
Medicare Part B has an annual deductible that is increasing to $185 in 2019. Once the deductible has been paid Medicare pays 80% of the costs of the medical service.
Medicare Part D – Prescription Drug Coverage
Part D is the prescription drug portion of Medicare. These plans are offered by private companies and all retain the same minimum standard of coverage they are required to offer.
The largest change in 2019 to the prescription drug coverages is the changes to the coverage gap, also known as the doughnut hole.
Part D has Four Phases:
- Deductible – during this phase Beneficiaries are responsible for the full retail cost of your prescriptions until the deductible is met. Not all plans have deductibles, and the maximum deductible a plan can have in 2019 is $415.
- Initial Coverage Phase – During the initial coverage phase beneficiaries are responsible for a co-pay or coinsurance for their prescriptions. They will stay in this phase until the retail costs of their drugs, not the amount they have paid, reaches $3,820 in 2019.
- Coverage Gap (Doughnut Hole) - In 2019, once the reach the retail costs of $3,820 you will fall into the coverage gap. For brand names in this phase they will pay no more than 25% of the cost of the prescription. For generics they will pay a maximum of 37% of the cost of the prescription. Beneficiaries will stay in this phase until the amount of money they have paid out of pocket reaches $5,100. This is called the Out-of-Pocket Threshold (TrOOP).
- Catastrophic Phase – Once a beneficiary reached the TrOOP he or she will fall into the catastrophic phase. In 2019 the portion they are responsible for is the greater of 5% or $3.40 for generic drugs, and 5% or $8.50 for brand drugs.
As a caregiver it is important to know these costs as well as the changes that will occur in their plan. In most cases a Medicare Beneficiary will have a Medicare Advantage Plan or stay with Original Medicare and a Medigap plan to pay most of their cost share.
These two options are very different, and it is important to review the annual notice of review letter (ANOC) from the beneficiary’s plan to see what changes are being made to the cost, and coverages.
With a Medigap the coverage is regulated and cannot change, however the premiums may increase or decrease, and plans can be retired. If a plan is retired, like the Plans F and C in 2020, a beneficiary can remain on the plan.
Conversely with a Medicare Advantage Plan, the Premiums, covered services, copays and really all aspects of the plan can change. With these plans you are effective replacing Medicare with a private insurance company. Medicare no longer pays, and your plan has the final say on what treatments are considered medically necessary.
You are restricted to networks in most cases and doctors can leave at any time. You can only change you plan during certain times of the year on these as well so make sure you are very informed of the changes for the new year.
Prior to 2019, the Annual Enrollment Period (AEP) was the only time you could change from one Medicare Advantage to another.
New Medicare Open Enrollment Period
Starting January of 2019, there will also be an Open Enrollment Period (OEP) that runs January 1st through March 31st.
This period allows beneficiaries a one-time election where they can change their Medicare Advantage plans. Once used, they would have to wait for the AEP in most cases to make another change.