Medicare Rates Climb Less Than Expected, As Seniors Consider Plans

The government has announced that Medicare’s basic monthly premium will rise less than expected next year, by about $3.50 for most people.

The announcement came in the midst of Medicare’s annual open enrollment period, which shifted earlier this year, starting on Oct. 15 and ending on Dec. 7, instead of the traditional Dec. 31.

Kim Lankford, Kiplinger contributing editor, told Here & Now‘s Sacha Pfeiffer that Medicare recipients and their families should review their plans as soon as possible.

“I talk with so many people, who normally spend the Christmas holidays, talking with their relatives about what to do about Medicare, and you can’t do that this year, you can’t wait till the end of December. Instead, I’m recommending, if you see them at Thanksgiving, talk to them about Medicare then,” she said.

Medicare Explainer

Medicare is complicated, and reviewing plans can be tricky.

Medicare Part A: Is free for all eligible seniors over 65 and covers hospital visits
Medicare Part B: Covers most of the 48 million people on Medicare, takes care of doctors’ visits and the new premium for that will be $99.90 per month
Medicare Part D: Is a prescription drug plan, which costs about $30 per month
Medicare Advantage: Rolls Medicare Parts A, B and D into one policy and is administered by a private insurance company

Open Enrollment

During open enrollment, recipients and their families should review their polices to make sure their policies aren’t changing in the next year. One of the biggest concerns is whether a policy has dropped a drug, or increased the price of that drug.

“For example, your drug may have been covered, but in the past you may have had to pay a $20 co-payment,” Lankford said. “Well they may have switched it to another tier, and you may have to pay $30 or $40 for it.”

Lankford says the best way to make sure you’re getting the coverage you need is to go to the government’s Web site, which allows people to compare and contrast plans.

“At Medicare.gov… there’s a plan finder tool,” Lankford said. “And it shows you the premiums and the out of pocket costs and the total expenses throughout the year that you would pay with every plan in your zip code.”

Lankford said if you need help navigating your way through the process, you should call your State Health Insurance Assistance Program (SHIP), and they will provide counseling on how to find the best plan for your needs.

She said that getting help and taking the time to review all your options could end up saving an enormous amount of money throughout the year.

Guest:

Kim Lankford, contributing editor for Kiplinger’s Personal Finance Magazine

We welcome comments from all of our listeners. Post below. Please stay on topic and be civil. Comments may be moderated by us, but you are solely responsible for the content of your comments.

Btmcbud

My Medicare enrollment in Parts A and B begins on 11/1/11. According to Medicare, my monthly rate is $115.40. I believe your guest gave a figure in the $96 range and in the text of this show, the amount is $99.90. My husband and are are retired with a very limited income. We “own” our home which we are still paying. That is our biggest asset. I am confused by the three different monthly amounts for Parts A & B. Is this a matter of incorrect information or what? The whole process has been daunting and confusing and getting discrepancies in prices only adds to it.
- http://www.hereandnow.org Kevin Sullivan
  
  My understanding is that the rates are changing and that folks like yourself, who were paying more, will pay less. Here’s what the AP says:
  “Some recently enrolled younger retirees will actually pay less. They
  were charged $115.40 a month this year, and they’ll see that go down to
  $99.90. ”
  Best, Kevin, H&N producer
  - Btmcbud
    
    Seriously? I have not heard that yet. I hope you are correct, but I will not hold my breathe.
    I will call medicare next week to check because my husband is on Medicare and pays in the high $90s/month. �
    I have been on Commonwealth Care for the past few years, paying about $75/month including Rx coverage. In fact, once my out of pocket Rx costs reached $500 for the year, my subsequent Rxs were FREE. With Medicare and an additional Medicare Advantage Plan covering Rxs, my monthly cost, not including the actual Rxs, will be close to $300/month!Nothing beats Commonwealth Care. I wish I could stay on it. (Before my husband went on Medicare and I joined Commonwealth Care, my husband and I paid $1200/month for health insurance as self-employed people! We hope we never see anything like that again.)
Captain Augusutus

The various Medicare Plans and Types is simply crazy. Try explaining this to an elderly person who may already have memory or health problems? Do we really expect a 90 year old to go online and shop within the Medicare plans? Can we not as a country consolidate this to one true “Medicare” coverage concept?
Dyarnes

I listened to the segment about medicare plans. The comment that most people don’t have the right plan doesn’t surprise me in the least. However, I strongly disagree that the reason is “primarily due to laziness! Have you ever tried to really evaluate the different plans and options??? It’s nuts! Sorting through all the various restrictions–like which plans are accepted by which physicians, the various drug formularies, the deductibles, etc. will make your head hurt. Then there are the “stealth” costs like drugs administered directly by your physician! Bottom line is that it is incredibly complex (unnecessarily so in my view), and it’s no wonder that most people select incorrectly. Only 20-20 hindsight would make it reasonably easier!

T. David Yarnes
Tucson, AZ
Dennis Byron

The above NPR story about Medicare is inaccurate. Perhaps that is because it is a summary of a radio show.

Medicare Part D Drug Coverage premiums are NOT “about $90 a month.” They vary from zero to over $100 depending on plans chosen. I think the average is under $50. The different amounts are due to indiviudal choices in deductibles and co-pays (as well as the drugs the Medicare recipients take) just like all insurance. (As an aside it is an interesting federal program in that it has come in $40 billion under budget so far and there is preliminary evidence — the program is only 6 years old — that making it easier for seniors to take their meds is saving money in Parts A and B Original Medicare.)

Also, it is NOT correct to say that Medicare Part C Medicare Advantage “Rolls Medicare Parts A, B and D into one policy and is administered by a private insurance company.” Seniors still have to subscribe to their Parts A and B policies (and pay the Part B premium) in order to subscribe to C. As with Part D, Part C policies vary from no cost to over $100 per month.

It does not matter to the seniors but — FYI — the NPR story is inaccurate in that all Parts of Medicare — A, B and D as well as C — are “administered” by private insurance companies. The typical difference beween C and an A/B/D/Medigap “cocktail” is that most C plans are HMOs (or accountable care organizations if you want to use the new technocrat/wonk term for them). Unfortunately although the Part C program has been very cost efficient since it was revised six years ago and although HMOs/ACOs are the way of the future for those under 65, the Patient Protection and Affordable Care Act (PPACA) has cut hundreds of millions out of the Part C program and there is liikely to be fewer available in the future as PPACA is fully implemented.

Finally the author makes NO mention of supplemental Medicare insurance. Reviewing Parts A and B without looking at supplements is the worst mistake people can make this time of year. Original Medicare is not very good insurance from most people’s perspective in that it has high co-pays and deductibles, no vision or dental, geographic restrictions and lifetime limits. The Part C Medicare Advantage programs mentioned above overcome most of these issues but over 90% of evernyone else — those on A and B Original Medicare — also gets a supplement either through their former employer/union, Medicaid, or by purchasing what is known as a Medigap policy.
�
Seniors need to look at the entire picture, not just A, B, C, and D.
- Dyarnes
  
  I think you may be confusing the various payment parts. What the segment was referring to is the amount deducted from your social security check for basic medicare. That is about $90 currently (more or less), and can be higher for higher income individuals. In addition to that, you may opt for a plan that requires an additional payment. For example, some “advantage plans” may have a zero additional premium, or a higher amount, depending on what plan choice you make. Maybe you were trying to say this as well, but it didn’t read that way. Everyone who signs up for medicare pays the same basic amount for it, subject to the possible add-on for higher income folks, and if you opt for an advantage plan, etc., that premium is transferred to the insurance company offering the plan, plus any additional amount you might incur for opting for a more deluxe coverage.
  
  T. D. Yarnes
  - Dennis Byron
    
    Dear dynarnes
    
    I am sorry if I confused you but no, I am not confusing Parts B and D. The NPR article above says (among its other errors):
    
    “Medicare Part D: Is a prescription drug plan, which costs about $90 per month.”
    
    That statement in the NPR article is incorrect. Medicare Part D plans cost from zero to over $100 per month. The average is $30 according to the Center for Medicare Services on September 30. (see https://www.cms.gov/apps/media/press/release.asp?Counter=4104&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=1%2C+2%2C+3%2C+4%2C+5&intPage=&showAll=&pYear=&year=&desc=false&cboOrder=date)
    
    Also, your are incorrect about Part B. The amount deducted from Social Security for Part B is not currently about $90 “more or less.” It is exactly $96.xx for most Medicare recipients. However it is $110.xx for those that signed up in 2010, and it is $115.xx for those that signed up in 2011. It is even higher for people that make more than $85,000. In 2012 it will be $99.xx for all subscribers except the high-income group (which is about 5% of the Medicare subscription base).
    
    Finally supplement plans (which people get from employers or private insurers) are different than Medicare Part C–Medicare Advantage. If you would like to understand the difference, leave a note and I will try to explain the difference.
    
    Dennis
Jansan1

MY priemiums have gone up $89.00/ mo. I now pay $300.00 + for the same insurance that I could not afford to go to a doctor’s office with before.