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Medicare open enrollment for 2016

Medicare open enrollment for 2014While the private health insurance market continues to undergo massive changes, Medicare open enrollment is running like it has in recent years.

As a Medicare beneficiary you have from Oct. 15 to Dec. 7, 2015, to review your coverage and make any changes for 2016. New coverage for changes made during the open enrollment begins January 1, 2016.

The state and federally run marketplaces, sometimes called exchanges, open two weeks after Medicare open enrollment begins. The coinciding events are confusing some people.

A survey commissioned by Express Scripts, a drug-benefits management company, found that one in five seniors mistakenly think they can enroll in a Medicare plan through the new health insurance marketplaces.

But the marketplaces will sell private individual health plans to people under age 65. They don't sell Medicare plans. People with Medicare do not need to enroll in the health insurance marketplaces.

Medicare open enrollment options

Two main ways to buy Medicare plans

Original Medicare

The federal government runs Original Medicare, which includes Part A and Part B. Part A covers hospital care, and Part B covers doctor visits, outpatient care, lab work, X-rays and preventive services. You likely don't pay a premium for Part A coverage if you and your spouse paid Medicare taxes while working. You do have to pay a deductible, however, before hospital coverage kicks in. You pay a monthly premium for Part B, as well as a deductible and coinsurance.

With Original Medicare you can see any doctor or go to any hospital that accepts Medicare.

You can add a prescription drug plan -- Part D. Private insurers sell drug plans, which are approved by Medicare. You pay a monthly premium for a drug plan.

In addition you can buy a supplemental plan, called Medigap, to help cover some of your out-of-pocket costs. Private companies sell Medigap plans, which are standardized by letters A through N in most states.

You don't have a guaranteed right to buy or switch Medigap plans during the annual Medicare open enrollment period in the fall. The best time to buy a Medigap plan is during the first six months you're at least 65 and enrolled in Plan B. During this period, federal law gives you the right to buy a plan, regardless of your health condition. You can still buy or switch Medigap plans later, but except in limited situations Medigap plans can turn you down or charge you higher premiums based on your health. The Affordable Care Act provision prohibiting insurers in 2014 from rejecting or charging higher premiums for people under age 65 with health conditions does not apply to Medigap.

Medicare Advantage

Private companies approved by Medicare sell Medicare Advantage Plans. These plans usually operate like health maintenance organizations or preferred provider organizations. You must use doctors or hospitals in the plan's network, or you pay more out of pocket for care. Medicare Advantage plans combine Part A and Part B of Original Medicare, and most cover prescription drugs. Some plans also cover vision and dental care. You pay a monthly premium as well as copayments or co-insurance.

You can add a drug plan to a Medicare Advantage plan that doesn't cover medication. You cannot buy a Medigap plan if you have Medicare Advantage.

During the Medicare open enrollment period you can:

  • Do nothing and keep your current Medicare medical and drug coverage as is.
  • Switch to a Medicare Advantage plan from Original Medicare.
  • Switch to Original Medicare from a Medicare Advantage plan.
  • Change Medicare Advantage plans.
  • Change Part D prescription drug plans, sign up for a drug plan if you don't have one now, or drop drug coverage.

Just turning age 65?

You have three months before your birth month and three months after your birth month to enroll in Medicare. If you turn 65 this fall, you'll need to enroll for coverage to take you through the end of this year and sign up for coverage for 2016.

What to consider

Reviewing your coverage is important because Medicare Advantage and drug plans can change, and so can your health care needs.

You should receive an "Annual Notice of Change" from your plans before open enrollment begins. Review the information to understand coverage and costs for next year. Among the questions to ask:

  • Does the prescription drug plan cover the medications you take? What are the coverage rules for drugs? Can you use your pharmacy or get mail-order prescriptions?
  • Are your doctors and hospital in the health plan's network? Do you need to get referrals to see specialists?
  • How much will you pay in premiums and out-of-pocket health care costs, such as deductibles, copayments and co-insurance?
  • What is the plan's quality rating?
  • Will you have coverage when you're out of state or the country?
  • Do you have access to other coverage, such as group health through a current or former employer? How will Medicare work with that insurance?

Medicare prices

The Centers for Medicare & Medicaid Services (CMS) says that the average monthly Medicare Advantage premiums for 2016 will increase by 1.25 percent, and the average number of plan choices will remain about the same. Since Congress passed the Affordable Care Act, average Medicare Advantage premiums are down by 6 percent, according to the U.S. Department of Health and Human Services. About 60 percent of the plans have a quality rating of four or more stars, based on a five-star rating.

The average monthly premium for basic Medicare prescription drug plans is projected to hold steady at about $32.50 per month. The deductible will increase from $320 to $360.

The so-called "doughnut hole" starts at a higher limit this year. The doughnut hole is the coverage gap between the limit on initial coverage for drugs and the spending threshold when catastrophic coverage for drugs begins. In 2016, you'll pay for drugs out of pocket when you and your drug plan have spent $3,310 on drugs.

Catastrophic coverage will kick in once you've spent $4,850 out of pocket on drugs for the year, up $150 from 2015.  Catastrophic coverage makes it possible for you to pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

When you're in the coverage gap next year, you can get a 55 percent discount on brand-name drugs, the same as this year, and a 42 percent discount on generics in 2016, up from 35 percent in 2015. The coverage gap will close in 2020.

The 2016 premium for Part B coverage of Original Medicare will be announced in October. This year, the monthly premium for Part B is $104.90.

Where to get help

Visit Medicare.gov to get information about plans in your area or call 1-800-MEDICARE. You can also get help by contacting your State Health Insurance Assistance Program. The "Medicare & You 2016" booklet is available for download on the Medicare website.

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