Medicare enrollment is open now. Here’s what you need to know

Average premiums, benefits and plan choices for Medicare Advantage and the Medicare Part D prescription drug program will remain stable in 2024, good news for the estimated 33.8 million Americans projected to participate in the federal health insurance program for those 65 and older.

The Centers for Medicare & Medicaid Services released 2024 premiums, deductibles and other key information in late September ahead of the annual open enrollment period, which begins Oct. 15.

Through Dec. 7, eligible individuals can update their plans as well as switch from Original Medicare to Medicare Advantage; from Medicare Advantage to Original Medicare; from one Medicare Part D prescription drug plan to another; and enroll in a Medicare Part D plan if they did not enroll when they first were eligible for Medicare.

Navigating the many options and rules surrounding the programs can be challenging. The Tampa Bay Times’ Medicare Guide breaks down the various parts of Medicare and offers charts for plan comparison to help beneficiaries.

Here are some points to consider at the outset.

Nationally, the average monthly plan premium for all Medicare Advantage plans, which includes Medicare Advantage prescription drug plans, is projected to change from $17.86 in 2023 to $18.50 in 2024, an increase of $0.64. If enrollees choose to stay with their plan, most will experience little or no premium increase for next year. Nearly 73% of beneficiaries should see no premium increase.

While Medicare Part A, which provides coverage for hospital inpatient care, skilled nursing facilities, hospice, and home health care, is free for most people, the deductible does change each year. The Medicare Part A deductible for 2024 should be released in mid-October.

Premiums for Medicare Part B, which covers both medically necessary services and preventive services, are expected to see an increase in 2024. While the official announcement isn’t likely to come before mid-October, CMS is projecting a rise from $164.90 in 2023 to $174.80 in 2024.

One factor contributing to potential Part B premium hikes is inclusion of Leqembi, a new Alzheimer’s drug. One of the costliest treatments covered by Medicare, Leqembi could cause Part B premiums to rise as high as $179.80 per month.

The average total monthly premium for Medicare Part D coverage is projected to be approximately $55.50 in 2024, a decrease of 1.8% from $56.49 in 2023. CMS reports that stable premiums for Medicare Part D are accompanied by improvements to the Part D program made by the Inflation Reduction Act, which provides meaningful financial relief for millions of people with Medicare by improving access to affordable treatments.

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Projected Medicare Advantage enrollment in 2024 will represent approximately 50% of all people enrolled in Medicare, compared to 48% for 2023. In Florida, the nearly 5 million individuals enrolled in Medicare, a slight increase from last year, will have 613 Medicare Advantage plans from which to choose.

Floridians’ average monthly Medicare Advantage plan premium will be $10.38, up from $9.59 in 2023. Every Floridian eligible for Medicare will have access to a Medicare Advantage plan with a $0 monthly premium.

Through the CMS Innovation Center’s Value-Based Insurance Design Model, 199 plans will offer additional options to Medicare Advantage enrollees throughout the state who receive low-income subsidies and those who are chronically ill, such as eliminated Medicare Part D cost sharing; rewards and incentives programs related to healthy behavior; and customized benefits that address social determinants of health, such as food insecurity and social isolation.

Additionally, Floridians with Medicare can select from among 21 standalone Medicare prescription drug plans with monthly premiums ranging from $0 to $181.60. Just over 81% will have access to a plan with a lower premium than what they paid in 2023.

The deductible for Part D coverage will be $545 in 2024, up from $505 in 2023. The initial coverage limit will increase to $5,030, up from $4,660 in 2023, and the out-of-pocket threshold, or “donut hole” maximum limit will increase to $8,000, up from $7,400 in 2023.

Prescription drug provisions in the Inflation Reduction Act that aim to lower out-of-pocket costs apply to all Part D plans, including standalone Part D plans and Medicare Advantage prescription drug plans. Additional provisions will come into effect in 2024, including phasing in a cap on out-of-pocket costs for prescription drugs covered under Medicare Part D by eliminating cost sharing above the catastrophic threshold.

What this means is that once your Part D out-of-pocket spending for prescriptions tops $8,000, you won’t owe a co-payment or co-insurance. The threshold includes out-of-pocket by the consumer, the amount spent by your insurance company, and manufacturer discounts on drugs during the coverage gap phase.

Bottom line: If you had steep prescription drug costs in 2023, you could fare better in 2024, so there may be more reason to compare Part D plans for your medications.

Here are two more reasons to look closely at your options:

In 2024, those who have less than $16,600 in resources other than a primary residence, vehicles and personal possessions (below $33,240 for married couples), will qualify for Medicare’s Extra Help program. This is an expansion of the program to benefit individuals who fall between 135% and 150% of the federal poverty line.

Qualifying Medicare enrollees will pay $0 for Part D premiums and deductibles and will pay a reduced amount for generic and brand-named drugs. If you meet the resource limit requirement, you’ll want to sign up for Extra Help when enrolling in a Part D plan.

Also in 2024, Medicare will cover mental health services provided by marriage and family therapists and mental health counselors as well as intensive outpatient program mental health therapists, but the therapists must accept Medicare for you to get this coverage.

Last spring, CMS issued a rule that, among other revisions, takes steps to protect people with Medicare from confusing and potentially misleading marketing. Of specific concern: television advertisements generically promoting enrollment in Medicare Advantage plans.

To address these concerns, CMS is prohibiting ads that do not mention a specific plan name as well as ads that use words and imagery that the agency feels may confuse beneficiaries or use language or Medicare logos in a way it interprets as misleading, confusing or misrepresents the plan.

Despite such reform efforts, those shopping for Medicare Advantage plans should employ a “let the buyer beware” mentality, do their research, and ask providers lots of questions. A good place to gather information is the Medicare Plan Finder, an online searchable tool that allows users to compare Medicare plan options, including Medicare Advantage plans, Medicare Part D plans, and Medigap supplemental policies. You can get information about coverage, costs and benefits of different plan options in your area, check star ratings (see more about this below), and enroll in a plan.

How Medicare works

Part A and Part B generally are the most popular programs and tend to offer the most free services for individuals who qualify.

Part A covers inpatient hospital care, nursing home care, hospice care and home health care. These services usually are free, which means there’s no premium to pay.

Part B covers two types of services: those that are medically necessary, such as outpatient hospital care, doctor bills, physical therapy and more; and preventive services and detection of illnesses at an early stage when treatment is likely to work best.

Part B is optional and costs most people a monthly premium, which is projected to increase in 2024 from $164.90 per month to $174.80. The premium is higher for some, depending on income. The premium is a bit lower for those who choose to have the premium deducted from their Social Security check.

Unless you are still on an employer’s health plan, it makes sense to sign up for Part B when you first become eligible for Medicare regardless of how healthy you are. You will face a penalty if you decide you need this coverage later – up to 10% for each year you could have had Part B but didn’t sign up for it, a penalty that will last for as long as you have Part B.

Part C refers to Medicare Advantage plans. These plans, subsidized by taxpayers, are managed by private insurance companies through either an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization). Individuals choose medical providers from a predetermined list. The plans offer bundles that include Part A, Part B, and usually a prescription drug program (Part D).

Medicare Advantage plans will continue to offer a wide range of supplemental benefits in 2024, including eyewear, hearing aids, both preventive and comprehensive dental benefits, access to meals, over-the-counter items, fitness benefits and worldwide emergency/urgent coverage.

The Medicare Advantage enrollment process varies slightly by plan, but in all cases, you must be enrolled in Medicare Part A and Part B. If you enroll in a Medicare Advantage plan during the annual enrollment period and later change your mind, you can drop the plan and go back to Original Medicare (Parts A and B) during the Medicare Annual Disenrollment Period, which is Jan. 1-March 31. If you don’t disenroll during this period, you must keep your plan for the rest of the year unless you qualify for a Special Enrollment.

It’s important to note that Part A and Part B services under Original Medicare come with deductibles and co-pays. These costs can be covered by buying private Medicare supplement policies known as Medigap. Premiums tend to be high, but the extra coverage can be worth it in the event of catastrophic illness.

Medicare Part D plans help pay for prescription drugs and protect you from high prescription drug costs. If you are eligible for Medicare Parts A or B, you are generally also eligible for Medicare Part D.

While all Part D plans are required to cover certain common types of drugs, the specific prescription drugs covered by a Medicare Part D plan vary by plan type and insurance carrier. Every plan has its own list of covered medications, called a formulary. Before enrolling, you should review each Medicare Part D plan’s formulary to understand which of your drugs are covered. The drugs you take may not be covered in every Medicare Part D formulary.

What is catastrophic coverage, and where is it going?

When Medicare enrollees have spent approximately $3,100, they will enter what’s called the catastrophic phase of their benefit. In this phase, they are required to pay 5% of prescription costs for the rest of the year, without a maximum limit. Beginning in 2024, the 5% prescription cost-sharing obligation for Part D will be removed.

In 2025, there will be a hard cap, or annual limit, of $2,000 for prescription medications. No one with Medicare insurance will spend more than $2,000 a year for prescription medications covered under Part D. In the years that follow, the cap amount will be adjusted based on inflation.

This provision does not relate to drugs covered under the Medicare Part B program. Medicare Part B covers drugs that are administered by a doctor, nurse, or other healthcare provider in an outpatient setting such as a doctor’s office. Some cancer drugs and injectable drugs are in this category.

The star ratings

The Centers for Medicare & Medicaid Services uses a star rating system to measure how well Medicare Advantage and Part D plans perform in several categories, including quality of care and customer service. Ratings range from one to five stars, with five being the highest and one being the lowest.

CMS changed its methodology last year, which resulted in far fewer contracts earning five stars. For 2024, additional measures will be added, such as the level of care enrollees receive after returning home from an inpatient stay in a hospital or a skilled nursing facility and follow-up after emergency room visits for patients with multiple chronic conditions.

Original Medicare or Medicare Advantage?

Coverage: Original Medicare covers most medically necessary services and supplies in hospitals, doctors’ offices, and other healthcare facilities but does not cover benefits like eye exams, most dental care, and routine exams. You can join a separate Medicare drug plan to get Medicare drug coverage (Part D). In most cases, you don’t have to get a service or supply approved ahead of time for Original Medicare to cover it.

Medicare Advantage plans must cover all the medically necessary services that Original Medicare covers. Most plans offer extra benefits that Original Medicare doesn’t cover, such as some routine exams and vision, hearing, and dental services. Medicare drug coverage (Part D) is included in most plans. In some cases, you must get a service or supply approved ahead of time for the plan to cover it.

Doctor and hospital choice: Original Medicare allows you to see any doctor or hospital that takes Medicare, anywhere in the United States. In most cases, you don’t need a referral to see a specialist.

Medicare Advantage plans in many cases require you to use doctors and other providers who are in the plan’s network, at least for non-emergency care. Some plans offer non-emergency coverage out of network but typically at a higher cost. You may need to get a referral to see a specialist.

Cost: For Part B-covered services, Original Medicare usually requires you to pay 20% of the Medicare-approved amount after you meet your deductible; this is called your co-insurance. You pay a premium (monthly payment) for Part B. If you choose to join a Medicare drug plan, you’ll pay a separate premium for your Medicare drug coverage (Part D). There is no yearly limit to what you pay out of pocket unless you have supplemental coverage such as Medicare Supplement Insurance (Medigap).

With Medicare Advantage, out-of-pocket costs vary; plans have different costs for certain services. You pay the monthly Part B premium and may also have to pay the plan’s premium. Plans may have a $0 premium and may help pay all or part of your Part B premium. Most plans include Medicare drug coverage (Part D). Plans have a yearly limit on what you pay out of pocket for services that Medicare Part A and Part B covers. Once you reach your plan’s limit, you’ll pay nothing for services Part A and Part B covers for the rest of the year.

Extra help

In addition to relying on the Medicare Plan Finder, Medicare enrollees can call a toll-free line – 1-800-MEDICARE – 24 hours a day, seven days a week, for help in English and Spanish with language support in more than 200 other languages. They also can contact the State Health Insurance Assistance Program for one-on-one assistance.

To help with their Medicare costs, low-income seniors and adults with disabilities may qualify to receive financial assistance from Medicare Savings Programs. These programs help millions of Americans access high-quality healthcare at a reduced cost, helping to pay Medicare premiums, and also may pay Medicare deductibles, coinsurance, and copayments for those who meet the conditions of eligibility.

The Low Income Subsidy program is a Medicare program that helps qualifying individuals pay Part D premiums, deductibles, coinsurance, and other costs. The program is expanding this year thanks to the Inflation Reduction Act, allowing all eligible enrollees to benefit from no deductible, no premium, and fixed lower copayments for certain medications. Enrollees can save nearly $300 per year, on average, according to estimates. Individuals who enroll in MSPs automatically qualify for help affording their prescription drugs through this program.

Still confused?

Florida’s SHINE program is a free offering from the Florida Department of Elder Affairs and the local Area Agency on Aging. Specially trained volunteers can assist with Medicare, Medicaid, and health insurance questions by providing one-on-one counseling and information. SHINE services are free, unbiased, and confidential. Visit the website or call 1-800-963-5337 toll-free.

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