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Cost Savings Tips for Medicare 2012 Enrollment

By Ross Blair
CEO of Plan Prescriber

The health reform law has made some important changes to Medicare that go into effect in 2012. Whether you’re approaching age 65 or already enrolled in Medicare, the annual enrollment period (AEP) for next year’s Medicare
Advantage and prescription drug plans is right around the corner - and it’s starting a month earlier.

Before 2012 begins, we’ve outlined the six most important things people on Medicare should know to ensure they pick the best Medicare Advantage or
prescription drug coverage for their specific needs.

Be aware of the new Medicare annual enrollment dates. Generally, most Medicare beneficiaries can change a Medicare Advantage plan or stand-alone Medicare prescription drug plan only once per year during Medicare’s annual enrollment period (AEP). The dates for AEP changed this year and run from October 15 to December 7, 2011. If you want to switch from a supplement plan to an Advantage plan, the AEP is a good time to make that switch.

But the new AEP does not effect when you can enroll in a Medicare supplement plan because these plans have an initial enrollment period that starts in the first six months after you enroll in Medicare Part B and are 65 or older. You can enroll in any supplement plan during that time and not be declined. But if you wait until those six months are over, your application could be declined.

Don’t wait until the last minute. Make way for baby boomers qualifying for "Original Medicare" at age 65. This year, baby boomers begin turning 65, which means more people will be enrolling in Medicare this year than in the past. All of these new enrollees will put more stress on Medicare enrollment experts. When you combine this influx of new customers with the new enrollment dates, people who wait until the last minute could be putting themselves at risk of running out of time or not getting the help they need to review their coverage and make changes, if necessary. It’s a good idea to make a plan and review your coverage options for 2012 early.

"Newbies" be aware of deductibles, coinsurance, out-of-pocket limits and prescription drugs. If you’re new to Medicare, it’s important to know that both parts of Original Medicare (A and B) have deductibles. And the deductibles are not tied to a calendar year like they are with traditional health insurance. Instead, they’re tied to a 90-day benefit period, with some exceptions. The Medicare Part B benefit also includes coinsurance after you meet your deductible. With coinsurance, Medicare pays a percentage of each bill (typically between 20 percent and 45 percent depending on the service) and you pay the rest. Original Medicare also has no limits on the amount you could pay out of your own pocket for covered medical services each year. And Original Medicare does not cover the cost of most
prescription drugs.

It’s critical to compare drug coverage. A 2011 PlanPrescriber.com report looked at 25,000 user sessions on its website during the 2011 annual enrollment period (between November 15 and Dec ember 31, 2010), where customers entered their zip code, their existing Medicare prescription drug plan or
Medicare Advantage drug plan and the names, dosages and frequency of any prescription drugs they were taking, if any. The site’s prescription drug plan comparison tool found that, on average, a user could save more than $500 per year - more than $40 per month - by reviewing their options and changing their prescription drug plan. Don’t miss this important step heading into 2012.

Look into filling in Medicare’s gaps. People concerned about some of the gaps in original Medicare have the option to enroll in insurance products regulated by the government but provided by private companies. These are
products designed specifically to fill some of the different gaps in Medicare. They include Medicare Part D stand-alone prescription drug plans, which cover the cost of most prescription drugs; Medicare supplement plans, which cover portions of the deductibles, coinsurance and out-of-pocket costs not covered by original Medicare; and Medicare Advantage plans, which bundle together the Part D drug benefit with some additional coverage for deductibles, coinsurance and out-of-pocket costs. Each type of supplemental
coverage has different guidelines for when you can enroll, change and cancel your coverage.

Get "star power" in 2012. The Affordable Care Act (health reform) requires a star rating system to be used for Medicare Advantage plans, beginning in 2012. Plans get a rating of 1 to 5, with a 5-star rating equating to an "Excellent Performance" and a 1-star rating equating to a "Poor Performance." According to the Kaiser Family Foundation, in 2011 out of 523 plans nationwide, only 3 received an overall rating of 5 and 74 received an overall rating 4 or 4.5 stars. Heading into 2012 the hope is that more plans will achieve this high 5-star rating. If you’re lucky enough to have access to a 5-star plan, consider it as an option for your coverage. One benefit of a 5-star plan is that you can enroll in it any time, even outside of Medicare’s annual enrollment period.


Note: The Centers for Medicare and Medicaid Services (CMS) has neither reviewed nor endorsed the information provided by PlanPrescriber.