COLUMN-What Obamacare will mean for retirees

Reuters

By Mark Miller

CHICAGO, Sept 26 (Reuters) - When the autumn leaves start tofall, it is time for Medicare enrollment. Starting on Oct. 15th,seniors can shop for prescription drug or Medicare Advantagemanaged-care plans in online exchanges that let them comparefeatures and prices.

Wait a minute, you're thinking - online health insuranceexchanges? Isn't that the Obamacare insurance market launch onOct. 1st?

No, these Medicare exchanges are completely different, butthey do sound alike - and that is causing confusion for someretirees, who are asking what the Affordable Care Act exchangelaunch means to them.

Here is the short answer: nothing. If you are already onMedicare, there is no need to use the Obamacare health insuranceexchanges; in fact, it is illegal for insurers to sell anexchange policy to anyone on Medicare.

Yet a recent survey by Medicare prescription drug planprovider Express Scripts found that one in five seniorsthinks that they can enroll in a medical and prescription drugplan through a health insurance exchange; while 17 percent thinkhealth exchanges could replace their Medicare plan altogether.

"There's a lot of confusion out there about which programsapply to different groups," says Matthew Eyles, executive vicepresident of Avalere Health, a healthcare consulting andresearch firm. "For Medicare-eligible people, nothing is reallychanging."

That is not to say the Affordable Care Act is not importantto retirees. The law made some important improvements toMedicare, including shrinking the catastrophic-level coveragegap - known as the "donut hole" - and adding a free annualpreventative check-up.

And the new insurance exchanges will be important forretirees ineligible for Medicare, either because they areyounger than 65 or have not worked at least 10 years (lifetime)in a job that required payroll tax payments.

For these folks, the Affordable Care Act will make it mucheasier to get coverage, because the law prohibits insurers fromturning away applicants with pre-existing conditions. Insurersalso can't put lifetime limits on the dollar value of coverageor rescind coverage if you become ill.

One wrinkle, so to speak, will affect anyone who turns 65sometime in 2014. If you are in that category, you will need tosign up for exchange coverage taking effect Jan. 1st in order toavoid the individual mandate penalty for failing to obtaininsurance. If you are already receiving Social Securitybenefits, you will be enrolled automatically in Part A andshould receive your Medicare card in the mail three monthsbefore your 65th birthday.

If you are not on Social Security, sign up three monthsbefore your 65th birthday. Then you can proceed to complete thepicture with traditional Medicare (signing up for Part Bfee-for-service and a Part D drug plan), or an all-in-oneAdvantage plan. And once you are certain of the start date foryour Medicare coverage, you can set termination of your exchangecoverage for that date.

But for anyone already over 65, it is time to keep onkeeping on. It is a good idea to use the Oct. 15-Dec. 7enrollment period to re-shop your current coverage using theMedicare Plan Finder (https://www.medicare.gov/find-a-plan/questions/home.aspx), just as you may have done in the past.

PRESCRIPTION DRUG PLANS

Premiums in the Part D drug program show why it can be soimportant to re-shop coverage annually. Prices are expected torise only 5.1 percent on average, according to Avalere Health.But half of the ten most popular plans are raising premiums atdouble-digit rates.

What is more, medication coverage can change from year toyear. Even if a plan lists a drug as covered, it is important tostudy the detailed "formulary," which specify the coveragerules.

"You need to look carefully to make sure your drug iscovered, any restrictions on quality, or special rules governinghow and when a doctor can order a drug for you," says PaulaMuschler, operations manager for Allsup Medicare Advisor, afee-based service that assists seniors with plan shopping.

The donut hole will be $80 smaller in 2014. You will enterthe gap when combined spending by you and your drug planprovider hits $2,850; you'll exit at $4,550. As in 2013, therewill be a combined 52.5 percent discount on brand name drugcoverage from manufacturers' discounts and government discounts.The discount for generics during the donut hole will increasefrom 21 percent to 28 percent.

MEDICARE ADVANTAGE

The Medicare Advantage plan market will be stable in 2014.Avalere says monthly premiums will be up 5 percent on average,with translates to just $1.64. If you like the plan you'reusing, check to make sure there won't be changes to premiums,deductibles and co-pays, or covered procedures, tests or medicalfacilities.

Some seniors will have to shift plans, because 142 planswill be discontinued across the country - a 5.3 percentdecrease, Avalere Health says. But the changes won't be evenacross all parts of the country, Eyles says.

"It really will vary by geographic area," Eyles adds. "Ifyou're in an urban or suburban area, there will still be plentyof choices. If you're in a rural area, you may not have as manyoptions."

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