It’s September, and that means that the Medicare Open Enrollment Period (OEP), also called the annual enrollment period, is almost upon us. Open enrollment begins on October 15, 2019 and closes on December 7, 2019, for plans that take effect on January 1, 2020. We’ll tell you what’s new, what’s not, and what you need to know to be an informed consumer during Medicare open enrollment for 2020.
You don’t have to do anything. If you’re currently enrolled in Medicare, and your current plan is working for you, you can simply do nothing and you will continue to be enrolled in the same plan. If you have considered the changes that your plan will undergo and are content with them, you can just let the OEP pass without taking any action.
How will you know about any proposed changes? Check your mailbox. In September, your insurance provider is obligated to send you a letter called an Annual Notice of Change. Don’t let this letter languish in a pile of unopened mail; it’s essential to your decision-making process. Even if your current Medicare plan is working well for you, planned changes could mean that a different plan will be more desirable in 2020. The Annual Notice of Change will address such issues as changes to copays and premiums, pharmacy networks, and drug formularies.
There are some changes coming down the pike with regard to Medicare supplement insurance, also known as “Medigap” plans. Medigap plans are insurance plans sold by private companies. As the name suggests, these plans exist to supplement Medicare, covering some of the expenses that are not covered by Medicare, such as copays, deductibles, and coinsurance. In addition to the premium you pay to Medicare for your Part B coverage, you pay the private insurer a monthly premium for your Medigap supplemental insurance.
The good news is that these supplemental policies are guaranteed to be renewable regardless of your health or medical conditions. If you continue to pay your premium on time, the insurance company may not cancel your Medigap policy.
A couple of the most popular Medigap plans are Plan C and Plan F. Plan C covers Part B deductibles, leaving you little expense out-of-pocket. Plan F covers almost all deductibles, and Part B excess charges (such as when a care provider does not accept Medicare as payment in full for certain services). As with Part C Medigap plans, Part F plans significantly reduce your out-of-pocket costs.
However, there is good news as well: if you are enrolled in Medicare Part A as of December 31, 2019, and you have enrolled in a Part C or Part F Medigap supplemental insurance by that date, you can keep it.
The bad news: as of December 31, both Plan C and Plan F are being eliminated. These are the only supplement plans that cover the costs of deductibles under Medicare Part B. However, there is good news as well: if you are enrolled in Medicare Part A as of December 31, 2019, and you have enrolled in a Part C or Part F Medigap supplemental insurance by that date, you can keep it. In fact, you may even have the option of purchasing your Part C or Part F Medigap coverage from a different insurer so long as you qualify. If you have not yet purchased Medigap coverage, but are considering it, this Open Enrollment Period is the time to act.
In other (good) news, the Medicare “Donut Hole” is closing. The Donut Hole is a sweet name for a bitter reality: namely, the gap in coverage under Medicare Part D (prescription coverage) after you have met your deductible but before you have reached your out-of-pocket maximum for prescription costs.
The closing of the Donut Hole doesn’t mean that your medication is free, but it does reduce the amount you will pay. As of right now, when you are in the Donut Hole, Medicare pays a little over half (56%) of the price of generic medication, leaving you responsible for the other 44%. In 2020, the amount you are responsible for will drop to 25%, with manufacturers and Medicare picking up more of the cost. For seniors on multiple medications, this could add up to a significant savings.
In addition, there will be savings on brand-name drugs that are produced by a company that participates in the Medicare Coverage Gap Discount Program. However, if the company does not participate, your medication may not be covered at all by Part D.
Medicare and Open Enrollment can seem confusing, but taking the time to understand your options can lead to better coverage and lower costs. If you have questions about Medicare Open Enrollment for 2020, we invite you to contact our law office for a referral to a health care insurance specialist.