11/23/2010 9:00 AM ET|
How to pick a Medicare plan
This year’s best coverage deal may not be next year’s, and the choices are complex. Here's how to get started on figuring out what's best for you.
This year's enrollment period for 2011 Medicare coverage extends to the end of the year. There are lots of changes in the various insurance programs that collectively make up Medicare. Experts say it's well worth the time to make sure your 2011 coverage remains the best deal for you.
There are four "letter" parts of Medicare: A is for hospital services, and B is for physician, outpatient and equipment costs. Together, parts A and B make up basic Medicare. Part C is for Medicare Advantage insurance, which includes A and B and, for most plans, prescription drug coverage. Part D is for stand-alone prescription drug coverage.
There also are a dozen Medigap policies that cover, to varying degrees, things that aren't covered in basic Medicare. Some Medicare Advantage and Medigap policies include vision and dental coverage, which is not provided in basic Medicare. If you want to supplement basic Medicare, you would chose either a Medicare Advantage plan or a Medigap policy.
"A lot of people don't realize how many options there are in Medicare," says Adrienne Muralidharan, a senior Medicare specialist for Allsup, a fee-based advisory company. "What covers your husband best may not cover you best." Before enrolling or re-enrolling in Medicare, she advises consumers to assemble detailed information on their likely health care needs, specifics on their prescription drugs, and a good financial understanding of what they can afford to pay for health insurance.
Julie Finkel, a counselor at the Medicare Rights Center, provides similar advice and notes that Medicare is not a monolithic, one-size-fits-all insurance program, but one that can be precisely tailored to an individual consumer's needs. This customization, however, takes effort and time.
There is an extensive network of fee-based and free resources to help with Medicare enrollment. Medicare has seven call centers throughout the country and expects to field 5 million enrollment calls to its main number, 1-800-MEDICARE (1-800-633-4227); it has beefed up staffing to a total of nearly 4,000 customer service representatives. The State Health Insurance Assistance Program offers local Medicare counseling and assistance, as does the network of 600 area agencies on aging around the country.
The Medicare Rights Center, a leading nonprofit, provides enrollment counseling. There are many fee-based companies that offer Medicare assistance as well. Allsup, for example, has three assistance plans that range in price from $75 to $350. Health insurers also provide help but may be biased toward their own policies.
Coverage rates. For most existing Medicare beneficiaries, the premium for basic Medicare Part B will remain $96.40 a month (Part A is free). The rate is tied to Social Security payments. Because there has been no Social Security cost of living adjustment for 2010 and 2011, the Part B rate stays the same for existing beneficiaries. People who were new to Medicare in 2010 did not qualify for the rate freeze and had to pay $110.50 a month this year; they will pay that same premium in 2011. People who are new to Medicare in 2011 will pay a monthly premium of $115.40. Individuals who have more than $85,000 in taxable income ($170,000 if filing a joint return) pay higher premiums on a sliding scale, beginning at $161.50 per person a month up to a maximum of $369.10.
The Kaiser Family Foundation estimates that monthly premiums for Part D stand-alone prescription drug plans will rise by 10%, on average, to $40.72 in 2011. This assumes beneficiaries stay with their 2010 plans. Many experts advise consumers to shop around. For Medicare Advantage policies, Kaiser projects relatively modest price increases, with premiums rising about $2 a month to an average of $43. This is what's called an enrollment-weighted premium, meaning that Kaiser has looked not only at insurance plan rates but also at the numbers of people in the plans. Plans with larger enrollments have more weight when projecting average premiums. All insurers offering Medigap plans must charge the same rate for comparable coverage. Medicare has an online tool that will allow access to local Medigap policies and rates by ZIP code.
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