Medicare’s Annual Enrollment Period launches on October 15 and runs through December 7. This is the eight-week period when existing Medicare beneficiaries may make changes to their coverage. Each year sees at least a few changes to the program. In this post, we describe what’s changing in 2019 to help you prepare for Medicare Annual Enrollment.
What Can You Do During Medicare Annual Enrollment?
The Annual Enrollment Period is when you can make changes to your existing Medicare coverage. Options include:
- Switching from Original Medicare to a Medicare Advantage (MA) plan
- Switching back to Original Medicare from an MA plan
- Changing to a new MA plan
- Changing to a new Medicare Part D (prescription drug) plan
- Enrolling in a Part D plan for the first time
If you did not previously have Part D coverage and do not qualify for a Special Enrollment Period, you may face a late penalty. Most people who go 63 consecutive days or more without creditable drug coverage pay a Part D penalty.
What If You Don’t Already Have Medicare Coverage?
The keyword for Annual Enrollment is existing coverage. If you delayed enrollment in Original Medicare (Parts A and B) when you first became eligible, you have to wait until January 1, when the Open Enrollment Period begins (previously known as General Enrollment Period). This period runs through March 31, with coverage beginning July 1.
If a full 12 months passed between becoming eligible for Part B and enrolling in it, you may face a 10 percent late penalty if you don’t qualify for a Special Enrollment Period. You pay this penalty for twice the number of years you failed to enroll in Part B. So, if 14 months pass, you pay the penalty for two years. If 11 months pass, you have no penalty.
Medicare Changes in 2019
Although Medicare hasn’t released all of the changes for 2019 yet, we can tell you about a few items we know are changing. First, of course, is the new Medicare ID cards. This is only slightly new, since Medicare began mailing out the new cards in April of 2018. But, with 60 million cards to send, the process is expected to last a full 12 months. The reason for this change is an effort to reduce identity theft, as the old Medicare cards had enrollees’ Social Security numbers on them. Your new card will have a randomly generated ID number. You don’t have to do anything to get your new Medicare card; the process is automatic. No one from Medicare will call you and the card is free.
Medicare Part B Premiums Increasing Slightly in 2019
Although we don’t have exact numbers yet, the Medicare Trustees Report projects the standard Part B premium will rise slightly, to $135.50 per month. Of course, the amount you pay depends entirely on the cost of living adjustment (COLA) you’ll see for Social Security in 2019. If the COLA is high enough to cover this increase, most enrollees will pay the new monthly premium. If, however, the COLA does not cover this increase, monthly premiums for most Medicare beneficiaries will be lower.
For example, around 70 percent of beneficiaries have the Part B premium deducted from their Social Security check. The “hold harmless” provision states that your net Social Security payment cannot decrease from year to year. That’s why the average Part B premium paid in 2018 was $130 per month, even though the standard Part B premium was $134. The 2018 COLA did not cover the full premium increase from 2017 to 2018.
Finally, Part B enrollees in the highest income bracket will have a projected monthly premium of $460.70 in 2019. The premium bracket is rising significantly in 2019. In 2018, annual incomes of $160,000 for singles and $320,000 for married couples qualified Part B recipients for premium rates. In 2019, those levels jump to $500,000 and $750,000 respectively.
The Donut Hole Is Shrinking
Starting in 2011, the Affordable Care Act included provisions that reduced the donut hole over time, closing it completely in 2020. But in 2018, Congress passed the Bipartisan Budget Act, which speeds up the process slightly.
Part D costs have always broken down between brand name and generic drugs. In 2019, Part D beneficiaries who enter the donut hole will pay:
- 25 percent of brand name drug costs
- 37 percent of generic drug costs
Originally, these numbers were scheduled to be 30 percent and 44 percent, respectively.
Other Part D changes include:
- Beneficiaries enter the donut hole when 2019 combined spending reaches $3,820
- You leave the donut hole when spending reaches $5,100
- The maximum Part D deductible is $415
- Part D beneficiaries in the highest income bracket will pay an additional $82.90 per month on premiums
What Happens If I Don’t Do Anything During Annual Enrollment?
If you currently have Medicare coverage and don’t make any changes during Annual Enrollment, your current coverage simply carries over into 2019. This assumes that your current plan is still available in 2019. Medicare Advantage and Part D plans nearly always undergo some level of change, and some end entirely. That’s why it’s so important to read everything your plan sends you (and make sure Medicare has an accurate mailing address).
If you have an MA or Part D plan, you should have received your Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) in September. Review those documents to determine whether your current coverage will meet your needs in 2019. If so, great! You don’t have to do anything during Annual Enrollment. If not, now is the time to make those changes.
Are you unsure where to begin, or just need assistance weighing your plan options? The licensed agents at Medicare Solutions are here to help. Just call us toll-free at 855-350-8101 to get started.