Medicare open enrollment is full of moving parts, not least of which are government rules and regulations that change each year.
Confusing? Sure. But the welcome surprise this year: Most of the changes for 2019 are improvements that will either save you money, improve your coverage, or both.
Here’s a quick guide to the key changes coming to Medicare next year.
Cost increases will be modest
Good news! Medicare premiums are mostly holding steady or, in some cases, even dropping slightly.
The majority of people with coverage under Medicare Part B for doctors and outpatient services will pay $135.50 a month in premiums for 2019, just $1.50 more than last year, according to the fee schedule announced by the Centers for Medicare & Medicaid Services (CMS) right before the start of open enrollment.
Higher earners will pay more, but even those premiums hikes are modest for all but those at the top of the income heap. For instance, individuals who earn more than $85,000 a year but less than $107,000 as singles (more than $170,000 but less than $214,000, if you’re married) will pay $189.60 a month in Part B premiums, an increase of $2.10, less than a cup of coffee in most places.
Above those income levels, monthly premiums next year will range from $270.90 to $460.50. But you have to be pretty well off to pay that top rate, which only applies to singles making $500,000 or more, or married individuals with household income of $750,000 and higher.
The increases for deductibles are small too. For Part B, the annual deductible will be $185 in 2019, up from $183 this year. The deductible for hospital coverage under Part A will rise to $1,364, vs. $1,340.
Meanwhile, the premium for other types of Medicare coverage are actually expected to drop slightly next year.
The average monthly premium for Medicare Advantage, the private-insurance alternative to the government-run program, will decline 6% to an average of $28 next year, vs. $29.81 in 2018, according to CMS. This is on top of the premium you pay for Part B coverage (and, in rare instances, Part A), which is included in Advantage plans.
Plus, anyone who gets prescription drug coverage via a Part D plan is also likely to pay less next year. CMS reports that the average premium is expected to be around $32.50 in 2019, about a dollar less than the current rate.
The dreaded donut hole starts to disappear
The donut hole for brand-name prescription drugs will be eliminated in 2019, a year earlier than originally scheduled under the Affordable Care Act (ACA), thanks to the Bipartisan Budget Act of 2018. It will go away for generic drugs in 2020.
That’s a big relief for anyone on Medicare with significant prescription drug costs. Under the current rules, you are on the hook for substantially more of your drug expenses once the total costs of your prescriptions reaches a certain level ($3,750 this year). Then when your out-of-pocket spending hits a second limit ($5,000 in 2018), catastrophic coverage kicks in and you pay substantially less.
In 2019, the coverage gap for generic drugs will start once someone has reached the limit of $3,820 and ends when they have spent a total of $5,100. Overall, the net result of the changes means that next year enrollees will pay 25% of the cost of brand-name drugs, down from 35% this year, and 37% of the cost of generic drugs vs. 44% in 2018.
You’ll have a second chance to get Advantage right
In 2019, if you signed up for Medicare Advantage, you will now have an opportunity in the first three months of the year to switch to a different MA plan or original Medicare, with or without Part D prescription drug coverage. Under the more limited current system, there was a six-week “disenrollment” period at the beginning of the year when Advantage enrollees could drop their plans for original Medicare but could not switch between MA plans.
“This is like a special open enrollment period just for Medicare Advantage,” says Phil Moeller, author of Get What’s Yours for Medicare: Maximize your Coverage, Minimize your Costs.
He says “It’s a good opportunity to kick the tires.”
Some Advantage plans will offer enhanced benefits
Under new government rules announced earlier this year, Medicare Advantage plans will be able to provide even more benefits beyond what original Medicare covers starting in 2019. The new services could include adult daycare, home-based palliative care, home health aides to provide personal care, counseling and respite support for caregivers, non-opioid pain management, memory fitness services, home and bathroom safety devices, transportation to and from the doctor, and some over-the-counter health items.
Nearly 270 Medicare Advantage plans, serving an estimated 1.5 million enrollees, will offer these new supplemental benefits in 2019, according to CMS. Before you get too excited, Moeller notes that’s just 7% of Advantage plan holders—for the most part, the changes were announced with too little time left for insurers to include them in their offerings for next year.
Next year, however, will probably be a different story. Bear in mind that even if you do find a plan with expanded features, not all policy holders will necessarily be eligible for all of the new benefits, Moeller says.
You’ll get more help paying for some therapy
Currently, coverage for physical, speech, or occupational therapy (often after suffering a fall or a stroke or while managing a chronic illness) is capped at around $2,000 for enrollees in original Medicare. As part of the 2018 budget deal, Congress eliminated the coverage caps on those therapies starting next year.
If you want more information about these changes or any other aspects of your plan, you should be able to find answers in a document called the Evidence of Coverage, which explains exactly what your plan covers and at what cost and should have been sent out by insurers last month.
Meanwhile, all Medicare recipients, whether they are covered under traditional or Medicare Advantage plans, should also have received the newly updated Medicare and You handbook. This outlines what Medicare does and doesn’t cover and explains several other Medicare oriented rules and regulations.
If you have not yet received this, call 1-800-Medicare to request another copy.