What to Know About 2012 Medicare Open Enrollment
It's a good time to review your options and see if another plan offers a better deal.
What changes will there be to open enrollment for Medicare Part D and Medicare Advantage plans this year? When do I need to decide on my 2013 plan?
After some big Medicare changes last year, such as expanding preventive-care benefits and bumping up the time frame for Medicare open enrollment, this year’s changes are much smaller. The doughnut hole (the period during which you must pay out of pocket) for Part D prescription-drug coverage continues to close: The discount on brand-name drugs in the coverage gap will rise from 50% to 52.5%, and the federal subsidy to help pay for generics will rise from 14% to 21% in 2013. And people can now switch Medicare Advantage plans outside of open enrollment if they’re in an area that has a plan with a five-star quality rating (only 12 plans qualified in 2012, but more are expected to make the cut in 2013).
The Centers for Medicare and Medicaid Services estimates that the average premiums for Part D plans will continue to be about $30 per month, essentially the same as last year’s average cost. But, as we’ve seen in the past, plans can make other changes - -such as boosting co-payments or changing pricing tiers for your medications -- that don’t show up in those averages but that result in higher out-of-pocket costs. Medicare Advantage plans, which cover drugs and medical expenses, can also change coverage and prices. Jan Berger, chief medical officer for Silverlink Communications, which helps Medicare Advantage plans with consumer outreach programs, also expects some Medicare Advantage plans to narrow their networks -- that is, you can’t assume that your doctors will remain in the plan’s network in 2013.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You should receive the plan’s Annual Notice of Change in September, which will let you know if your Part D or Medicare Advantage plan will be changing premiums or coverage in 2013, or if it will be leaving the business. This document also includes the plan’s quality star ratings, which show how your plan stacks up based on 50 measures of coverage, communications and customer service.
Insurers can start marketing their 2013 plans by October 1 (which is when the Medicare Plan Finder is updated with the 2013 plan information). You then have from October 15 to December 7 to pick your Part D or Medicare Advantage plan for next year. If you don’t do anything, you’ll automatically be re-enrolled in the same plan (unless it is leaving the business). But even if you’ve been happy with your plan, this is a great opportunity to review your options and see if another plan offers a better deal, especially if your plan boosts premiums and co-payments, or moves your medications to a more-expensive pricing tier, or if you’ve been prescribed new medications since you last searched for plans. Also see how your plan’s quality rankings compare with the others in your area. For more information about tools and resources to help you compare Part D or Medicare Advantage plans, see How to Evaluate Your Medicare Options.
It’s also a good time to reassess whether you want to get coverage through traditional Medicare plus a medigap policy and Part D prescription-drug coverage, or if you’d like to get both your medical and drug coverage through Medicare Advantage. (You can switch Part D plans during open-enrollment season, but medigap policies don’t have the same open-enrollment schedule.) If you switch medigap plans more than six months after you originally sign up for Medicare Part B, you could be charged a higher rate or denied coverage for a new medigap policy based on your health, whereas you can switch Medicare Advantage plans, or move from Medicare to a Medicare Advantage plan, during open-enrollment period regardless of your health.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.
-
Take Charge of Retirement Spending With This Simple Strategy
To make sure you're in control of retirement spending, rather than the other way around, allocate funds to just three purposes: income, protection and legacy.
By Mark Gelbman, CFP® Published
-
Here's How To Get Organized And Work For Yourself
Whether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
By Laura Petrecca Published
-
Credit Report Error? They All Matter
credit & debt Don't dismiss a minor error. It could be the sign of something more serious.
By Kimberly Lankford Published
-
Insurance for a Learning Driver
insurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
By Kimberly Lankford Published
-
529 Plans Aren’t Just for Kids
529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
By Kimberly Lankford Published
-
When to Transfer Ownership of a Custodial Account
savings Before your child turns 18, you should check with your broker about the account's age of majority and termination.
By Kimberly Lankford Published
-
Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
By Kimberly Lankford Published
-
When It Pays to Buy Travel Insurance
Travel Investing in travel insurance can help recover some costs when your vacation gets ruined by a natural disaster, medical emergency or other catastrophe.
By Kimberly Lankford Published
-
What Travel Insurance Covers When Planes Are Grounded
Travel Your travel insurance might help with some costs if your trip was delayed because of the recent grounding of Boeing 737 Max planes.
By Kimberly Lankford Published
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
By Kimberly Lankford Published