Integrating Social Security and Medicare for Cost-Effective Solutions

Medicare Plan Changes Expected During Annual Enrollment, Allsup Reports

New Medicare plan options for 2016 become available for review Oct. 1

Belleville, Ill.—Sept. 4, 2015—Medicare annual enrollment is fast approaching on Thursday, Oct. 15, and Medicare beneficiaries should pay attention to changes that may affect their budget in the coming year, according to Allsup, a nationwide provider of Medicare plan selection services.

From Oct. 15 to Dec. 7, all Medicare beneficiaries can change their Medicare plans for 2016 to better match their personal health and financial needs. This includes anyone using Original Medicare (Parts A and B), Part D prescription drug plans or Medicare Advantage plans.

“Higher premium costs are possible for 2016, so Medicare beneficiaries will want to take a close look at the information they receive from their providers,” said Aaron Tidball, manager, Allsup Medicare Operations. “We probably won’t know Medicare Part B premiums until early October, so the timing is important for annual enrollment.”

Allsup Inc. offers the Allsup Medicare Advisor®, which provides a range of assistance with Medicare Advantage plans, Part D prescription drug plans, and Medigap, or supplemental coverage. The service, available in all 50 states, offers a comparative, objective analysis of plans and costs, and serves as a trusted resource for beneficiaries and their financial advisors and caregivers.

“Forecasts for 2016 premiums indicate that many people could see higher costs,” Tidball said. “This may be the year for some people to try a Medicare Advantage plan, if they haven’t done so before. They can use a trial right period, which allows them to try out Medicare Advantage for the first time, and also to return to Original Medicare if they aren’t satisfied.”

Earlier this year, the Boards of Trustees for Medicare announced program costs had increased and that higher Medicare Part B premiums may be necessary for at least a portion of beneficiaries. “We’re still waiting for the Social Security cost-of-living adjustment, or COLA, in order to determine how Medicare beneficiaries might be affected by a Part B premium increase,” Tidball explained.

Medicare plan selections made during annual enrollment will take effect Jan. 1, 2016.

What To Expect: Medicare Plans In 2016

More than 55 million people are enrolled in Medicare. Following are factors that may influence some of them to change their Medicare plan selections for 2016.

  • Part D prescription drug options and costs. The Part D initial deductible will increase by $40 to $360 in 2016. Drug cost sharing during catastrophic coverage will be $2.95 for generic or preferred drugs (multi-use source) and $7.40 for all other drugs. Premiums are expected to remain stable in 2016 at $32.50 per month for a basic Medicare Part D prescription drug plan, according to CMS. In addition to costs, beneficiaries should look for changes to the drugs covered under the plans they are considering for 2016.
  • Changes with the drug donut hole. Beneficiaries who reach the prescription drug gap will need to be aware of their out-of-pocket costs. In 2016, the gap will begin when someone reaches the initial coverage limit of $3,310 and ends when they have spent $4,850. (These are increases of $350 and $150, respectively.) Catastrophic coverage begins at this point. During the donut hole, all costs are covered by the individual. However, they benefit from additional discounts of 55 percent on brand name drugs and 42 percent on generic drugs while in the donut hole.
  • Medicare Part B premiums. The Medicare Trustees report issued earlier this year points to higher premiums for at least a portion of Medicare beneficiaries, primarily those who are new enrollees in 2016, those who pay higher premiums due to income, and those billed directly for their Part B premium. There is a hold harmless provision affecting Medicare Part B premiums so that if Social Security beneficiaries do not see an income adjustment in 2016, their Part B premium cannot increase. CMS officials said decisions about premiums will not be announced until October.
  • Medicare Advantage plan options and costs. Participants using Medicare Advantage plans should examine their current plans for changes in 2016. Costs including premiums, deductibles, co-pays and coverage for procedures, tests and drug formularies could change with the new year. Some plans may be eliminated, requiring enrollees to choose a new plan for 2016 or default to Original Medicare. The average number of Medicare Advantage plans available was 18 in 2015 (the same as 2014).

Most Medicare beneficiaries should receive their Annual Notice of Change (ANOC) or Evidence of Coverage (EOC) from their existing Medicare Advantage and Medicare Part D prescription drug plan providers by Wednesday, Sept. 30.

“It’s really important to review the information your current Medicare providers send you ahead of Medicare annual enrollment,” Tidball said. “These documents may help you decide if you want to shop around the Medicare plans in your area for something that is a better fit for your needs.”