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).

 

Social Security Notice for Extra Help Review

If you’ve applied for and received “Extra Help” from Social Security, September is the month where some of you will be audited. Social Security doesn’t actually call it an audit, but it’s essentially the same thing; they select a group of people who had previously qualified for Extra Help and ask them to send in proof they still meet the thresholds.  If those people don’t respond within 30 days, they automatically lose the extra help.

What is Extra Help?

Some people with limited resources and income may be able to get Extra Help with the costs — monthly premiums, annual deductibles, and prescription co-payments — related to a Medicare prescription drug
plan. The Extra Help is estimated to be worth about $4,000 per year.  To find out if you qualify, you will have needed to apply for this – it’s not automatic in most cases.  The form is here.  You will have to do a bit of legwork and disclose personal financial situation such as how much money is in your checking and savings accounts, investments, real estate (other than your home), and your income. If you’re married, this information needs to be provided about your spouse as well as your habitation status.

How Do I Qualify?

To qualify for Extra Help, your resources must be limited to $13,640 for an individual or $27,250 for a married couple living together.
Resources include the value of the things you own. Some examples are:
• Real estate (other than your primary residence)
• Bank accounts including checking, savings and certificates of deposit
• Stocks
• Bonds, including U.S. Savings Bonds
• Mutual funds
• Individual Retirement Accounts (IRAs)
• Cash at home or anywhere else.

What Does Not Count As a Resource?

Social Security does not count:
• Your primary residence;
• Your personal possessions;
• Your vehicle(s);
• Resources you couldn’t easily convert to cash, such as jewelry or home furnishings;
• Property you need for self-support, such as rental property or land you use to grow produce for home consumption;
• Non-business property essential to your self-support;
• Life insurance policies;
• Burial expenses;
• Interest earned on money you plan to use for burial expenses; and
• Certain other money you are holding is not counted for nine months, such as:
—Retroactive Social Security or Supplemental Security
Income (SSI) payments;
—Housing assistance;
—Tax advances and refunds related to earned income tax credits and child tax credits;
—Compensation you receive as a crime victim; and
—Relocation assistance from a state or local government.

To qualify for Extra Help, your annual income must be less than $17,820 for an individual or $24,030 for a married couple living together. Even if your annual income is higher, you may still be able to get some help.

Extra Help Eligibility Review

In early September, Social Security sends out a form to a select bunch of folks to check and see if they still qualify for this extra help.  Watch your mailboxes, folks.  Interestingly, they do not have an online form.  You must use paper (scratches head).

When you get the form, you’ll have to complete it and send it in within 30 days or you will automatically lose your subsidy.  It’s essentially applying again as the information they’re asking for is essentially the same Social Security asked for when you originally applied.  Have your checking, savings, investments, etc. all ready to go – you’ll have to re-enter that information again on a paper form.  Then, you must sign and return the form in the envelope they provide you.  Remember… 30 days is all you get!

Be Prepared and Be Precise!

To prepare:
• Identify the things you own alone, with your spouse,
or with someone else, but do not include your home,
vehicles, burial plots, life insurance policies, or personal possessions;
• Review all your income; and
• Gather your records in advance to save time.

The records you’ll need are:
• Statements that show your account balances at banks,
credit unions, or other financial institutions;
• Investment statements;
• Stock certificates;
• Tax returns;
• Pension award letters; and
• Payroll slips.
The Social Security Agency won’t ask for proof to support the information you provide, but they will match your information with data
available from other government agencies to make sure it
is correct.

The Takeaway:

Watch your mailbox in early September if you get Extra Help.  If you do not return the form they send you within 30 days, your help with Medicare prescription drug plan costs will end. If for some reason you need more time, you get to wait on hold with the federal government, folks!  The only way to get a 30 day extension is by calling  Social Security at 1-800-772-1213 (TTY 1-800-325-0778).  Be prepared.  Have your statements ready, because if you misrepresent your resources, they will be cross-checking what you put down with “other data available.”  Be honest, and be on time!

Mid-year Formulary Changes

While it’s true that companies selling Medicare Part D plans can’t raise their premiums mid-year, sometimes things can happen that affect the level of coverage you’re getting from.  One of those is called a mid-year negative formulary change.

A “negative formulary change” happens when a Medicare insurance company changes what prescriptions are covered and how much they’ll cost you, right in the middle of the plan year!

Can they do this?  Sure can, and happens all the time.  If this happens to one of the prescriptions you take, you’ll get a nice little letter from your insurance company telling you what’s happening, and why.  You’ll usually get notified at least 60 days before the change is made.  Common changes your insurance company can make mid-year are:

  1. Remove the prescription  from the formulary because it was removed from the market
  2. Stop covering a prescription because Medicare decided to stop paying for it
  3. The insurance company placing quantity limits on the drug (usually due to high cost, or potential for abuse)
  4. Mandating prior authorization (which means special permission needs to be granted in order for you to fill your prescription)
  5. Moving prescriptions in a higher Tier (more expensive for you)

Let’s say you have a Medicare Part D plan who makes a negative formulary change to one of your prescriptions.  Well, next time you fill that prescriptions, insurance companies are required to send a written notice to you within 3 business days of the fill, explaining that in the future, you’ll have to contact your doctor for a different prescription.

How can they do this?  Well, it’s complicated, but I’ll summarize: Every year, plans new and old begin discussing the plans, prices and benefits they’re going to offer the upcoming year around February.  That’s right! Mere weeks after the Annual Election Period (AEP) ends, companies begin to plan for the following year.  From there, companies on their bids which they submit to Medicare around June/July for the following January.  Insurance companies must bid each year, and if they’re approved to offer Medicare Part D, they only have permission from Medicare for the upcoming calendar year.  As a part of this bid, these companies must tell Medicare what drugs they’re going to cover, what benefits they’re going to offer (copay tiers, etc.) and how much monthly premium their plans are going to cost you, the consumer.  Once Medicare accepts an insurance company’s bid, the company is locked into those prices and benefits for the entire year.  Likewise, once you pick a Medicare Part D plan during the AEP, you’re usually stuck with it for a year.

What are your options if this happens to you?  Well, for one, you should call your doctor and ask him or her to switch your prescription to something else that is on the formulary.  That’s by far the easiest solution. If you’ve tried everything else and really need to keep that prescription going, you can call your insurance company and request an exception be made.  The process is long and tedious and yes, there are lots of forms to fill out and phone calls to sit on.  If that’s your thing, or you for some reason really need the particular prescription that’s being affected, then by all means please travel down this path.

But at Prepare for Medicare, we strive to simplify Medicare, so your best bet is to get your doctor to find an alternative prescription, or simply pay for it out of your own pocket until the fall.  Then, vote with your feet!  AEP begins October 15.  Grab your prescriptions, head on over to Medicare.gov and find a new Medicare Part D drug plan that meets your needs.