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Time for Medicare choices

By Jennie L. Phipps · Bankrate.com
Thursday, August 29, 2013
Posted: 11 am ET

Annual Medicare open enrollment starts Oct. 15 and runs through Dec. 7. Medicare plan selection service Allsup says don't confuse this with the rollout of the Affordable Care Act's health insurance marketplace, which will be open for business Oct. 1. The debut of these insurance exchanges shouldn't have any impact on Medicare recipients. Anyone eligible for Medicare shouldn't enroll in a health care exchange because Medicare recipients aren't eligible.

Otherwise, there isn't too much new this year for current Medicare participants enjoying retirement. Here's what to plug into your retirement planning budget.

  • The drug doughnut hole will shrink slightly. This gap in prescription drug coverage starts after someone reaches the initial coverage limit, about $2,850, and ends after they have spent $4,550. These amounts reflect reductions of $120 and $200, respectively, compared with 2013.
  • If you reach the doughnut hole, you can expect a 52.5 percent discount on brand-name drugs and a 28 percent discount on generics, which is up from 21 percent in 2013.
  • Those who pass through the doughnut hole and reach the catastrophic coverage level on the other side will pay $2.55 for generic or preferred multisource drugs with a retail price up to $51. That's down from $2.65 in 2013. And they will pay $6.35 for all other drugs with a retail price up to $127. That's a reduction from $6.60 in 2013. If you take drugs with a retail price of more than $127, you'll pay $6.35, plus a 5 percent cost-sharing fee.
  • The initial Part D deductible declines $15 to $310, and Part D monthly premiums remain at an average $31 for a basic prescription drug plan in 2014.
  • If you have a Medicare Advantage plan that is slated to be eliminated in 2014, you can either choose another Medicare Advantage plan or you can go back to original Medicare with a Medigap plan without facing underwriting from the insurance company that sells it.
  • The Medicare Part B premiums will increase from $104.90 per month in 2013, but the amount hasn't yet been announced. The announcement will be made before open enrollment begins. If you earn more than $85,000 for a single person or $170,000 for married people filing jointly, you'll pay additional premiums based on your income. Part D premiums also are subject to these sliding scales. These income levels haven't increased since 2010, so more people will face these income penalties.

Paula Muschler, manager of the Allsup Medicare Advisor service, offers this advice: "Plan early. Don't let the deadline sneak up on you. You want time to be able to evaluate your options."

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