Changes in Medicare

Updated for 2011:

This year the Medicare Open Enrollment period is October 15, 2011 – December 7, 2011. You can change how you receive your health coverage and add, change or drop drug coverage. Changes take effect January 1. Here are 4 key points.

Medicare Advantage (Part C) is still a better option than Original Medicare (Parts A+B) for healthy people who do not mind enrolling in HMOs.

Why? It means using HMO doctors, but most give you drug benefits and other services not covered by A+B along with no or small premiums, no deductibles, and limited co-pays. If you find premiums, co-pays and deductibles too pricy, then life is much simpler with Medicare Advantage. Health care reform has reduced payments to Medicare Advantage plans, and insurance companies are reacting by cutting back on the number of plans they offer. This reduces the chaos (how is one to choose the right plan?) but it also means some enrollees need to switch to another plan by year’s end. The cuts came, by the way, because Medicare Advantage’s higher payments were subsidized by premiums that A+B beneficiaries were paying – hardly fair – and that has now been fixed. Health care reform also capped out-of-pocket expenses (what insurance does not cover) at $6,700 per year and higher co-payments are barred for certain services to keep them consistent with A+B.

Original Medicare (A+B) will be better too.

Why? Because now it includes free preventative services such as mammograms, Pap tests and screenings for prostate and colorectal cancer, plus one annual “wellness” examination. However those on higher incomes now will have to pay higher premiums for Part B (doctors) and Part D (drugs) – that affects about 5% of all Medicare enrollees.

For Part D drug benefits, the doughnut hole is mostly plugged.

Why? It closes incrementally each year until it is eliminated by 2020. This year, if you enter the Part D doughnut hole, you will receive a one-time $250 rebate check. Starting in 2011, you will receive a 50% discount on brand-name drugs in the doughnut hole, and you will start to pay less and less for your generic Part D drugs in the doughnut hole. If you have had an “enhanced” Part D plan till now, you may wish to drop it eventually. Upper income individuals and couples (those with a modified adjusted gross of more than $85K or $170K respectively) will be paying higher monthly premiums for Part D next year. A possible way to minimize this is to move into Advantage (Part C) plans.

Hospice care increasingly will become important in end-of-life care.

Why? Despite the death panels nonsense, hospice care increasingly will be an option for the terminally ill elderly and children. To read up on why this is desirable, I recommend Atul Gawande’s thoughtful article in the New Yorker (here). The basic argument is: why diminish a patient’s last months with aggressive, and ultimately futile, treatments when it might be better to forgo them and slide away less destructively. Research suggests the length of time is the same. Currently some private insurance covers hospice care but options will increase in the years to come.

Photo: Pete Souza/Wikipedia