Medicare Advantage Star Ratings and Your Wallet

Assigning Medicare Star ratings to Medicare Advantage plans is attempt by the government to neatly rate the quality of a Medicare Advantage (MAPD) plan.   Like most attempts to aggregate lots of information into a small rating system for easy public consumption, it’s flawed. Plan Star ratings should be one aspect of your Medicare insurance coverage decision.  However, it shouldn’t overshadow other considerations like price, network, MOOP or your prescription drug coverage.  Star ratings are important to you, because ultimately if your plan is rated 3 stars or below, it generally means you’ll pay more money for your policy or your benefits won’t be as rich as plans with 4 Stars or higher.    

The Centers for Medicare and Medicaid (CMS)  established a five star rating system in order to help consumers identify and educate the consumer as to the overall quality of their Medicare Advantage (MAPD) Prescription Drug Plan (PDP) plans.  

The star rating system is numbered from 1 to 5, with 5 being the best and 1 being lowest in terms of quality of service:

5 Stars- Excellent

4 Stars- Above Average

3 Stars- Average

2 Stars- Below Average

1 Star- Poor

Medicare Advantage Star Ratings

Medicare Advantage (MAPD) health plans are rated based on the following categories:

1) Staying healthy: screenings, tests and vaccines. CMS evaluates whether members of a particular health plan got various screening tests and vaccines and whether they got other check-ups that would go a long way in keeping them healthy.

2) The management of chronic conditions: individual health plans are graded on their ability to ensure that members with long term conditions got tests and treatments that helped in managing their chronic conditions.

3) The experience of beneficiaries with the plan: the CMS routinely surveys members to elicit their experiences with different health plans, and this is factored into the STAR rating that each health plan will get.

4) Members’ complaints: beneficiaries under a certain plan can lodge complaints if they encounter problems when using their plan. Medicare also routinely evaluates the health plan of the private insurance company to plot the plan’s performance and improvement over time.

5) Customer service: this includes how often members with appeals and other problems are handled by the health plan’s customer service.

Medicare Stars Rating Flawed?

I mentioned above the ratings system is flawed. I say that, because every year, CMS changes the rules and how they score health plans.  Think about it:  There are over 54 million people on Medicare.  Can you really break down plan ratings across the country in only one way?  Can you really break down these ratings into a neat 5 star sliding scale?  The obvious answer is no, and policy professionals and insurance companies quietly (and sometimes not so quietly) let CMS know about it.  Differences in geography, access to hospitals and doctors, income and even attitudes about what it means to be healthy mean the results are suspect and imperfect.

I won’t spend any more time here on the flaws, as plenty of people smarter than me have already done so.  If you’re a policy wonk and would like to check those out, you can click here, here, or here.


Medicare Advantage Star Ratings Affect Your Wallet

Here’s what it means for you, the consumer.  In a nutshell, when you join a Medicare Advantage plan the federal government (CMS)  pays insurance companies a set dollar amount for your care every month.  Plans rated 4 Stars or higher get more money from the government for everyone enrolled in the plan.  This money really adds up, quickly.  Let’s say there are 10,000 people enrolled in the same MAPD plan.  And let’s say, for the sake of argument, that insurance company gets $1,000 per month, on average, from the government for every person’s medical and prescription drug care.  That’s $10 Million dollars per month, or $120 Million dollars per year.  Yes, that’s a big number, but remember the Medicare Advantage plan is on the hook for all the medical and prescription drug care (from the healthy to the very ill) of those 10,000 members.

So, let’s say the plan achieves a Star Rating of 4 Stars.  The insurance company will earn an additional 5% on top of the $1000 they get for all 10,000 people on that same plan.  Quick math means that’s an additional $500,000 every month MORE that insurance company makes, and $6 Million dollars more a year.  Some of that can be profit for the insurance company, but the government mandates a portion of this money MUST be spent on making the Medicare Advantage plan’s benefits better.  That’s where your pocketbook comes in.

Since Medicare Advantage plans need to take a portion of that additional 5% and put it back into the actual insurance plan, they usually do so in two ways.

  1. Lower the plan’s monthly premium
  2. Make benefits richer.  (Ex. Lowering doctor’s copay from $10 to $5, lowering hospital copays, etc.)

Medicare Advantage plans get a Star rating every year.  So if you think about it, if you’re in a 3 Star plan instead of a 4 star plan over the course of 5 years, and those Star ratings remain the same all 5 years, you’re missing out.  Why?  Because remember, a portion of the money the 4 Star plan gets over those 5 years MUST be put back into lower premiums or better benefits.  After 5 years, the Medicare Advantage plan rated 4 Stars should essentially, be cheaper (both in premium or by having better benefits) than the 3 Star plan will.

The Takeaway

Do Star ratings really matter?  Sure.  They matter because they give an overall indication as to the quality and customer experience of a given Medicare Advantage plan.  Is there a significant difference between a 3 Star plan and a 4 Star plan, from the consumer’s standpoint or experience?  No.  There are flaws, to be sure and the “rules” insurance companies must abide by change every year.  The real impact to YOU, the CONSUMER is that higher-performing MAPD plans that receive 4 Stars or higher are paid more from the federal government.  Half (or more) of that additional money MUST be put back into benefits or lower insurance policy premiums, which in the long run, is better for you and you wallet.  

Medicare Supplement: What’s the Difference Between Plan C and F?

Medicare Supplement plans have been around for ages, and the most popular plans by far are Plan C and Plan F.  So, what’s the difference?  Not much. In fact, the only thing Medigap plan Plan C does not cover is Medicare Part B excess charges, which Medigap plan F does.  Is it a big deal?  Not really.

Medicare Part A covers hospital stays and Part B covers outpatient services while Part D covers prescription drugs. As you know by now, Original Medicare still leaves gaps in your healthcare coverage.  Medicare supplemental insurance (Medigap) fills in these gaps.  Some plans fill in most of the gaps, others fill in ALL of the gaps.  Medigap plans F and C fill in all of the gaps, hence their popularity.  Unlike Medicare Advantage plans, you don’t need to worry about an HMO or a PPO network when you buy a Medigap policy.   When you buy a Medigap policy, Original Medicare will pay its Medicare-approved amount first, and the Medigap policy will then pay its part. Depending on the plan, this may leave a balance for you to pay.

Medicare Supplement = Medigap

Medicare Supplement insurance policies are also known as Medigap policies. These Medigap policies are important due to the fact that they may take care of other costs Original Medicare coverage will not cover. These include costs such as: co-payments, coinsurance and deductibles. Some Medigap policies also go the extra mile and pay for care when you travel outside the country. If you travel a lot, you need to check out my post on this subject by clicking here.

There are many different Medigap plans, ranging from plan A to plan N. Two of the most popular plans are Medigap Plan C and Medigap Plan F. Both of these plans cover 100% of what Medicare doesn’t cover.  Out of all the supplement plans available, only Plan F is more comprehensive than Plan C.

You Need a Medigap or Medicare Advantage Plan

As you by now know going “Bare with Medicare” is an OK option, but not advisable under most scenarios, mostly due to the lack of a, “Maximum Out Of Pocket,” or MOOP.  Click here to see my post outlining why a Medicare Supplement needs to be a part of your health insurance coverage if you don’t want to choose a Medicare Advantage plan.

The Takeaway

The only thing that Medigap plan Plan C does not cover is Medicare Part B excess charges.  Plan F DOES cover Part B excess charges. These are the fees that a doctor is legally to charge over and above the amount approved by Medicare as payment for a health service at a physician’s office IF THEY DON’T ACCEPT MEDICARE ASSIGNMENT.  Usually, when these charges occur, it is up to the patient to pay for them out of pocket.  I wrote a blog post about Medicare excess charges and Plan F.  You can read that by clicking here.

Over 99% of doctors and hospitals across the country accept Medicare Assignment. The doctors and hospitals that don’t are usually specialty cancer centers or research institutions.  Medigap Plan F covers these excess charges.  Medigap Plan C does not.   So if Medicare Supplement plan C is substantially less expensive than Medicare Supplement plan F, I’d go ahead and choose C.  If the monthly premiums are within $10, I’d stick with Plan F.

It is also important to note that Plan F offers a high deductible plan. HD-F has a pretty substantial deductible you must pay before it kicks in.  But when it does, the same features of the regular Medigap plan F kicks in, including coverage of the Medicare excess charges.  Check out my comparison of HD-F and Medigap F by clicking here.

 

Working Past 65 and Medicare

Approaching retirement age?  Working past age 65?  You still have Medicare choices to make.  If you choose poorly, you’re going to be out quite a bit of money for coverage you don’t need.  The options are a bit confusing.  This post will help you understand your options.

The latest research is showing more and more people are working past the typical retirement age of 65.  Not only does it seem to be good for your health, but it’s good for your wallet, too.

In May of 2016, Pew Research reported  18.8% or nearly 9 million Americans reported being employed full- or part-time over the age of 65.

So clearly, there are a there are many people who continue working even when they reach 65, which is the stereotypical retirement age for most people. For these folks, there are undoubtedly going to be many questions they have about their medical insurance coverage.  These could include:

  • Do I need to take Medicare now?
  • Should I delay in enrolling in Medicare Part B? What happens if I do?
  • Should I Delay Medicare Part B Enrollment?
  • What about Part A?
  • What if I have a Health Savings Account (HSA)?

The simplest answer to these questions is…maybe.  I know that’s not very helpful, but stick with me.

Do I need to take Medicare now?

If your work doesn’t provide health insurance, then the easy answer is YES.  Get automatically enrolled in Part A, allow yourself to be enrolled in Part B and choose a Medicare plan. There are essentially only 2 options you need to consider:

  1. Stick with original Medicare and buy a Part D plan.  If you’d like (and I’d recommend you strongly consider it) buy a Medicare Supplement (Medigap) plan.  Medigap plan F is by far the most popular plan purchased due to its near-100% coverage for everything Medicare doesn’t cover, medically.  Check out my post comparing Medigap plan F with Medigap High-Deductible plan F by clicking here.
  2. Enroll in a Medicare Advantage plan that covers both medical and prescription drugs.  You can find out more about whether this is the right choice for you by reading by clicking here.

If your work provides health insurance with prescription drug coverage, you’re more than likely best served staying on your plan.  However, it would be wise to enroll for Medicare Part A. This is because it is free for most people who have been paying Medicare taxes as part of their payroll taxes. It would wouldn’t make sense to avoid Part A. The important thing to note is that Medicare Part A would only kick in after your group’s health insurance cover runs out.

Should I delay in enrolling in Medicare Part B?  What happens if I do?

If you’re over the age of 65 and are still working and staying on your employer’s health insurance plan, you should probably delay enrolling.  There are advantages to delaying Medicare Part B enrollment and Medicare Part D enrollment in most cases. Don’t worry.  It’s possible to get them later when you officially retire or if you lose your insurance due to a job loss.  There is a special enrollment period of eight months allowing people to enroll in Medicare Part B and Medicare Part D for people who fall in this category.  All you have to do is prove you had good, “qualifying coverage” for medical and prescription drugs through your employer and you won’t get penalized.

Here’s where the “maybe” from above comes in.  There are a few exceptions:
1.  If you are working (or your spouse is working) in a company with 20 or fewer employees, you may be required to sign up for Medicare, because for small businesses, your group health insurance automatically becomes  your secondary health coverage. That means it pays AFTER Medicare pays.  So, you’ll want to accept Medicare part A when you’re eligible, and accept Medicare part B when you’re eligible AND get a PDP.
2.  If you are currently in an unmarried domestic union, then you may not have the right to delay signing up for Part B without paying the late penalty.

Should I Delay Medicare Part B Enrollment?

1. If you are still working past the age of 65 and on your employer’s medical and prescription drug insurance, you don’t need Medicare Part B.  You can certainly sign up for it if you like, but it won’t actually do any good.  This is because your employer’s insurance is covering what Part B would have covered.  If you delay enrollment in Medicare Part B, you don’t have to pay for it until you retire.  REMEMBER our little lesson from above, however…  If you work for a small company under 20 employees, Medicare becomes PRIMARY – meaning they pay FIRST, and then your employer health insurance pays the rest.  In this case, you need to elect enrollment in Medicare Part B and pay for the monthly premium.  Check with your Human Resource department (or benefits person) at work for guidance.
2.  It is possible to delay your Medigap Open Enrollment period, which gives you the right to purchase Medigap insurance without any bias to pre-existing medical conditions. This means, no underwriting.

What about Medicare Part A?

Everyone is encouraged to enroll for Part A, as it’s actually an entitlement.  You’ve been paying for Medicare Part A from every paycheck you’ve ever received.  It’s no cost to most people.  The only time there could be a premium is if you haven’t worked the qualifying number of months/quarters.

What if I have a Health Savings Account (HSA)?

If you have a Health Savings Account (HSA) and are still working, and covered under your employer’s health insurance plan, you may want to push off your enrollment in Part A.  As soon as you sign up for part A, neither you nor your employer can legally contribute to your HSA anymore. However, once you retire or stop working, the funds left in your HSA can pay for Medicare Part(s) A, B, C, and/or D.  They can’t be used to pay for Medicare Supplement (Medicap) policy premiums.

The Takeaway:

Generally speaking, if you work past the age of 65 and you get insurance through your employer, keep it.  Take Medicare Part A when it’s given to you, opt NOT to take (and pay for) Part B when it’s offered, and don’t buy an MAPD, Medicare Supplement (Medigap) or Part D (PDP) plan.

If you work for a company with fewer than 20 employees, Medicare is primary.  This means it pays before your employer insurance does.  In this case, enroll in Medicare Part B.

If you’re working and your employer doesn’t offer insurance, take Medicare A, B and choose either C (Medicare Advantage) or Part D (PDP).  If you don’t choose a Medicare Advantage plan, you’ll need a PDP plan and probably a Medicare Supplement.

 

The Basics of Medicare and Enrolling

In this quick, easy post, I’ll provide the basics of Medicare, explain its different parts and highlight how and when you can enroll.

What is Medicare?

Medicare in the United States is a national social insurance program. Medicare has been around since 1966, after its enactment in 1965 by Congress under Title XVII of the Social Security Act, signed by President Johnson.  Did you know Harry Truman and his wife, Bess were the first two Americans to get Medicare?  Now you do.  Anyway, Medicare generally covers people who are 65 years and above. However, there are some exceptions for younger people living with disabilities, end stage renal disease and Lou Gehrig’s disease (amyotrophic lateral sclerosis).

The Alphabet Soup of Medicare

Medicare is divided into 4 parts, A-D:
1) Medicare Part A: hospital insurance that will cover Inpatient care, skilled nursing facility care, hospice and home health care.
2) Medicare Part B: medical insurance that mainly covers outpatient care and preventive treatment services such as Pap smear tests for cervical cancer.
3) Medicare Part C: this is also referred to as Medicare Advantage and is a combination of Part A and Part B. Part C is offered by private insurance companies that have been approved by Medicare. Under this plan, you may be able to access more benefits and services, though sometimes at extra cost.
4) Medicare Part D: this plan covers drug prescription costs you’d normally get at a pharmacy or mail-order pharmacy.

How Do I Enroll in Medicare?

When enrolling for Medicare, there are really only two options available when you break it down.  I know, there are millions of websites and publications out there that are confusing.  I call it, “analysis paralysis.”  Don’t spend hours and hours trying to figure out what options are out there, because there really are only two.

1) Staying in Original Medicare: this is Medicare Part A and Medicare Part B. If you are interested in a PDP plan (and you should be) then you will have to find a Part D plan (PDP). It is important to enroll for Medicare Part D when you are first eligible, as this will protect you from paying the late enrollment penalty if you decide to do so later. You may also opt for supplemental insurance (Medicare supplement, or Medigap) that will plug gaps in the benefits offered by Part A and Part B.  And believe me, there are a lot of gaps to plug if you decide to go “Bare with Medicare.” Click here for my post about why you really need to think about a Medicare Supplement policy if you decide not to go with a Medicare Advantage plan. Also, check out my post on whether or not Medicare Supplement plan F or Medicare Supplement plan High-Deductible F makes more sense by clicking here.

2) Joining a Medicare Advantage Plan (Part C): this is the other option available. In order to be eligible for this plan, you must first sign up for the Original Medicare Part A and B.  Check out my post on whether or not a Medicare Advantage plan is right for you by clicking here.

When Can You Apply for Medicare?

For starters, most people get Medicare coverage automatically. These people include:
1) People already receiving benefits from Social Security or the Railroad Retirement Board.
2) People under 65 years, living with disabilities and have been receiving disability benefits for 24 months.
3) People living with ALS (amyotrophic Lateral Sclerosis) receive coverage the month their Social Security benefits start kicking in.

Some folks do have to sign up, for instance:
1) People close to 65 and not receiving Social Security benefits.
2) People with End Stage Renal Disease.
3) People living in Puerto Rico will have to sign up for Part B separately.

There are three enrollment periods when you can initially sign up:
1) Initial Enrollment Period: this is a 7 month part that begins 3 months before you turn 65 up to 3 months after your 65th birthday.
2) General Enrollment Period: If you did not sign up for Medicare during the initial enrollment period, you can do so between January 1st and March 31st every year.
3) Special Enrollment Period: this is for people (or their spouses) who are still working and are covered by their group’s health plan, or during an 8 month period that begins the month that their employment ends.

Finally, there’s the Annual Election Period (AEP) which begins on October 15, and ends on December 7th.  That’s when folks already on Medicare get to choose the PDP or the Medicare Advantage plan they want for the following year, without underwriting.

 

Do Commissions Influence Medicare Insurance Agents?

It’s one of the biggest questions many people silently ask themselves: How do I know if my Medicare insurance agent has my best interests in mind, and not influenced by earning the highest possible commissions for themselves when enrolling me in a Medicare plan? Is my insurance agent selling the policy that best fits my needs, or simply selling me a product that pays him/her as much as possible?

Let’s start with the basics. First of all, 99.9% of independent insurance agents are fine, upstanding, moral, high-character people who ALWAYS put the best interests of their customers first. If they’re not, they will soon be found out and kicked out of the business and stripped of their insurance license. But like any industry (financial planning, stock market, etc.) there are always a few bad apples who don’t do the right thing and more often than not, end up on the news.

Independent insurance agents selling Medicare products go to extreme measures to remain compliant with Medicare regulations and laws, must be licensed as an agent and sit through hours of classes for each company they represent to remain “certified” to sell MAPD and PDP plans every single year. They also must take continuing education classes every year to keep their insurance license. Insurance companies have an extremely low tolerance for agents who do not follow the rules and are quick to terminate their ability to sell their products if they suspect any improprieties.

So (very good) odds are, the insurance agent you’re dealing with for your Medicare insurance needs are highly trained, ethical, honest and highly regulated sales professionals who know their business, know the local market and know what plans are (usually) the best for you.

How Much Do Medicare Insurance Agents Make?

Independent insurance agents selling a Prescription Drug Plan (PDP) or a Medicare Advantage plan (MAPD) … ANY MAPD or PDP are paid exactly the same, regardless of the policy they sell you. Around 10 years ago, these commissions were not regulated, and that led to different insurance companies offering some staggeringly high commissions for selling MAPD plans… at times as high as $850 or more per sale. That led to a number of folks complaining to Medicare their agents were inappropriately placing them into a plan based upon those high commissions, and not because it was the best plan for them and their health and financial conditions.

That all changed around 2007, when Medicare stepped in and mandated Medicare insurance companies pay exactly the same commission amounts, and proposed steep penalties for not doing so.

Current MAPD and PDP Commission Rates

For plans that go into effect in 2017, agents selling an MAPD plan are paid $443 for the first year, and $221 every year after that, usually for 6-7 years. That $443 is paid if you’ve recently enrolled in Medicare, or are buying an MAPD for the very first time. If your agent is merely switching you from one MAPD plan into another MAPD, they only get $221 per sale, and get that every year until you choose a different plan. So, if you buy an MAPD from an agent and stick with the same plan for 6 years, the total amount that agent is paid for your enrollment could be around $1,500. Yes, that’s quite a bit of money! But because every MAPD plan is not allowed to pay more than those amounts, it’s hard to argue there’s an incentive for agents to inappropriately steer people to one plan over another. Remember, the vast majority of independent insurance agents are just that: INDEPENDENT. That means they’re independent contractors, with no base salary and no benefits, no car allowance, no gas money and pay taxes on those commissions. Factor in all those costs and $1,500 over 6 or 7 years doesn’t seem quite as high.

For PDP, that commission amount is $71 for the first year, and then half of that amount in the following years, usually stopping around year 6 or 7, depending upon the company. The same logic applies as found in the MAPD scenario above; it’s hard to argue an insurance agent has an incentive to enroll you in one PDP plan over another… because they make the same amount of commission for every plan.

These commissions are not paid by you, nor do they directly influence the cost of your MAPD. Your premium does not go up or down if you buy a policy from an independent Medicare insurance agent. Online, over the phone or in your home on your couch with your insurance agent, the MAPD premium (if there is one) and the PDP premium you’ll pay stays the same regardless of where or how you buy it.The price as they say, is the price.

Medicare Supplement Commissions

The issue of commissions gets a little murky when talking about Medicare Supplements. Unlike MAPD or PDP plans, Medicare supplements are regulated by the states, not the federal government. And unlike MAPD and PDP plans, commissions are not the same and can actually vary quite a bit. For example, Company A might pay $15% sales commission for year 1, and 10% commission for years 2-6. Company B might pay 22% sales commission for year 1, and 15% commission for years 2-10. If one company pays more than the other for the exact same Medicare supplement insurance policy… are you sure your agent is putting you in the product that best fits your needs and budget? Let me remind you, 99.9% of the time that answer is YES. But how do you really know?

How Do I Know If I’ve Got a Trustworthy Agent?

Most independent insurance agents represent multiple Medicare insurance companies. So, if your agent only presents you one option, get suspicious and ask questions. Ask them, “Why this option and not the others?” Be active and challenge them! There’s usually a good reason. Medicare Supplement plan F is the exact same plan, regardless of the company logo. In that case, your agent may be recommending you take one option over another due to lower premiums, for example.  Maybe your doctors and preferred hospitals are in one plan’s network and not the others. The key here is to ASK. Ask them WHY they think this is the best plan for you.

The Best Way to Size Up Your Medicare Insurance Agent

Ask them how much commission they’re making if you enroll in the product they’re selling. If they say they don’t know, or refuse to tell you, end the sales presentation right then and there. If your independent insurance agent won’t disclose their commissions to you, what else are they not telling you? A good insurance agent will have no problem telling you how much commission they make on a sale. Heck, they should be proud to tell you. They’re professionals who know their stuff, work extremely hard and ALWAYS put the needs of their clients FIRST.

The Takeaway

Commissions paid to insurance agents are standard for Medicare Advantage and Medicare Prescription Drug Plans. Commissions paid to insurance agents for Medicare Supplement plans are NOT standard. These commissions do not directly influence the price you pay for your insurance policies and the price you pay is the same regardless of where you purchase your policy; phone, web or agent.

Good, professional insurance agents who specialize in Medicare coverage are all around, but like any profession, there are bad actors. When meeting with an agent for the first time, act like Dan Rather or Charlie Rose and interview them. How many clients do they have? How long have they been doing this? What companies do they represent and why? Finally, how much commission will they make if you buy a policy from them? Use your gut; if they can’t (or won’t) answer those basic questions, it’s best to thank them for their time and find a better agent.

You Must Read Your Medicare ANOC (Annual Notice of Change)

If you have a Medicare Advantage plan or a Medicare Part D plan, it’s very important you read at least a portion of the Annual Notice of Change (ANOC) your insurance company sends you.  This will usually arrive in your mailbox in a large, intimidating package with your insurance company logo affixed in the upper left-hand corner.  Medicare insurance companies are bound by regulation to have this delivered and in your hands by September 30 of each year.  Please resist the temptation to throw this in the recycling bin, or stash it near the phone in the, “I’ll get to it later” pile!

Here’s why:  The AEP (Annual Election Period) is coming on October 15, and ends on December 7.  If you don’t read your ANOC before then, you won’t know what changes are being made to your plan until they go into effect on January 1!  By that time, it’s too late to make a change for an entire year if you want to pick a new Medicare Advantage or PDP plan.

The bad news:  It can be a thick, heavy document.  It’s also in black and white, and very boring and bland.
The good news:  I’m not asking you to read the whole thing, just the important parts.  What are the important parts? Immediately go the section entitled, “Summary of Important Costs 2017.”  It should be right up front, either page 2 or 3.

Medicare ANOC
Medicare ANOC Sample

Your Benefits Change Every Year

I’ve never seen a Medicare Advantage plan NOT change at least SOMETHING from one year to the next.  Same goes for PDP plans.  Almost every plan makes some changes for the new year, so the costs and benefits in place on December 31 may very different on January 1. Here are some changes that can really throw you for a loop!

You May Have a Premium!

Surprise!  If you had a $0 Medicare Advantage premium, that may have changed! Every year thousands of people get surprised in this way, all because they do not read their ANOC and only realize this when they either get a bill, or notice a new deduction from their Social Security checks in January or February.

Your Premium May Be Going Up!

The ANOC is where (and when) Medicare insurance companies announce you’re going to have to pay more (or not) in the upcoming year for your PDP or Medicare Advantage Plan

Your Plan May Be Disappearing

This happens all the time.  Sometimes insurance companies stop offering certain plans.  This is usually because they can’t make money in that area, don’t have enough willing doctors, physicians or pharmacies to participate in their plans.  Sometimes, plans go out of business or are terminated by Medicare.

Other ANOC Changes to Watch Out For

The plan may change its charges for premiums, deductibles, and copays.

Your very important Maximum-out-of-Pocket (MOOP) may be increasing! The maximum MOOP for Medicare Advantage plans for 2017 remains at $6,700 annually, not including Medicare Part D costs.

Your Medicare Advantage or PDP plan may move drugs to different tiers so the copays change.

The plan may alter its formulary (the list of drugs it covers) by dropping some drugs or adding others.  They can also do this at any time during the year.

For other changes, the plan must send you details in an ANOC.

The Takeaway:

The Annual Notice of Change (ANOC) is a document listing any changes in plan coverage, service area, or costs that will go into effect the following January. All Medicare plans are required to send this to plan members by September 30, or 15 days before the start of the Annual Election Period.

You should review at least the Summary of Changes in your ANOC Annual Notice of Change especially if you’re worried about whether or not your medications are still included in the plan’s drug formulary (the list of prescription drugs covered by the plan). If a drug you take is no longer covered, you may want to consider switching to a different Medicare prescription drug plan.

If you have a Medicare Advantage plan and notice your out of pocket costs going up, it’s a good idea to shop and compare your current coverage against other Medicare Advantage plans during the Annual Election Period. 

If you haven’t received the Annual Notice of Change by the end of September, you should contact your Medicare plan to request it.

Remember to read your ANOC (or, at least some of it)!  If you miss making a new plan choice during the AEP, you’re basically locked in for the next year, unless you qualify for a Special Election Period (which you shouldn’t count on).