Medicare Annual Enrollment Period Started November 15, 2010: Time to Review Coverage Options

The Annual Coordinated Election Period for Medicare Advantage and Medicare Part D drug coverage started November 15, 2010 and goes through December 31, 2010. During this period, Medicare beneficiaries who do not have a Part D plan can enroll in one, and those who do have Part D coverage can change plans. Beneficiaries can also return to traditional Medicare from a Medicare Advantage plan, enroll in a Medicare Advantage plan, or change Medicare Advantage plans.

Even beneficiaries who were satisfied with their plan in 2010 need to review their options for 2011. This is important because Part D plans can change their formularies (list of covered drugs), tiers, utilization management tools, exceptions and appeals processes, and other aspects of their Part D plans, and Medicare Advantage plans can change their entire benefit package and provider network.

Beneficiaries who take no action will remain in their current plan, with some exceptions for certain individuals who receive the Low-Income Subsidy (LIS) or who are in plans that are terminating their Medicare contract.[1]

A great deal of information is now available to beneficiaries about their options for 2011. While beneficiaries can begin enrolling in or changing plans November 15, they do not have to make a decision until December 31, 2010. The Centers for Medicare & Medicaid Services (CMS) has advised beneficiaries to enroll before the end of the enrollment period to avoid delays in getting evidence of their enrollment in their new plan.

Every Person With Medicare Can Be Affected By Changes To Their Drug And Other Health Coverage For 2011 And Should Therefore Review His or Her Options.

Part D prescription drug plans can make changes to their benefit package for 2011, including changes in covered drugs, utilization management tools, and premiums. While there will be fewer Part D prescription drug plans (PDPs) offered nationwide in 2011, the average Medicare beneficiary will still have a choice of 33 stand-alone PDPs. This reduction in the number of plan offerings is primarily the result of new CMS rules requiring plans to eliminate or consolidate duplicative or under-enrolled plan offerings. [2]

Starting in 2011, there are a number of changes to the Part D benefit; most notably the Donut Hole coverage gap will begin to close. The Center has described many of the changes in a previous Alert.[3]

Again, all Medicare beneficiaries should reevaluate their options for 2011, even if they were satisfied with their plan in 2010.

Part C Medicare Advantage (MA) plans can also make changes to their benefit package in 2011. According to the Kaiser Family Foundation, the average premium for all plans that are available to beneficiaries, without regard to enrollment choices, will decrease by 9% in 2011 (compared with an 8% increase in 2010). The average weighted premium, meaning the premium enrollees will pay if they remain in the same plan in 2011, will increase by 5% (compared with a 32% increase in 2010). [4]

In addition to fewer Part D plans, there will also be a 13% decline in the total number of MA plans offered nationwide, primarily due to a number of Private Fee for Service (PFFS) plans pulling out of the Medicare market in response to new network requirements pursuant to a 2008 law, as well as new CMS rules requiring plans to eliminate or consolidate duplicative or under-enrolled plans. On average, Medicare beneficiaries will be able to choose among 24 MA plans offered in their county (26 plans in urban areas and 16 plans in rural areas). [5]

Medicare Advantage plans can increase cost sharing, change the way the plan's out-of-pocket limit is calculated, and change the doctors and hospitals that contract with the plan. Even HMOs and other Medicare Advantage plans that have been serving Medicare beneficiaries for a long time are making changes.

Again, it is imperative that all Medicare Advantage enrollees review their plan's network and cost-sharing for 2011.

Factors To Consider When Renewing Membership In A Medicare Part D Prescription Drug Plan Or Choosing A New Prescription Drug Plan:

§ The number of tiers

§ The co-payments/co-insurance per tier

§ The placement of the drug on a specialty tier for costly drugs; specialty tiers often require large cost sharing

Additional Factors To Consider When Considering Enrolling In Or Renewing Enrollment In A Medicare Advantage Plan:

• Whether enrollees in the plan who are eligible for the Low-Income Subsidy (LIS or "Extra Help") will have to pay a portion of their premium
• If the plan was a Low-Income Subsidy plan in 2010:
• Whether it will remain a Low-Income Subsidy plan in 2011
• If not, the amount of premium people eligible for the full extra help will have to pay
• Whether the plan formulary includes or continues to include:
• The particular drugs needed by the Medicare beneficiary
• The strengths, packaging, and dosages of the drugs needed by the beneficiary
• The number of days covered in each prescription (Example: 30, 60, 90 days)
• The plan's utilization management tools
• Whether utilization management tools have been added to drugs that were on the formulary in 2010:
• The prior authorization requirements (Requirement that plan approve prescription for a formulary drug before it will cover or pay for the medication.)
• Whether the plan requires step therapy (Requirement that certain medication(s) be tried before that prescribed by the beneficiary's physician)
• Whether the plan uses tiered cost sharing (Different co-pays for generics, brands, or for specific drugs) and if so:
• Whether the plan offers therapeutic substitutions
• Whether there are quantity limits
• On the number of prescriptions in a month
• On the number of pills in a prescription
• On the dosage strength
• If the beneficiary received an exception from the plan in 2010 to cover a drug that is not on the formulary, by-pass utilization management requirements, or to reduce the beneficiary's cost-sharing:
• Whether the plan will honor the exception in 2011 and continue to cover the drug, and what the beneficiary has to do to make sure coverage will continue
• Whether the beneficiary must file a new exception request for 2011, when can the new exception request be filed, and what is the process for doing so
• Whether another plan includes the drug on its formulary so the beneficiary does not need to request an exception
• If the plan provides coverage for drugs in the "Donut Hole" or coverage gap:
• If coverage is provided, are all formulary drugs covered or are only some drugs covered?
• If coverage is limited to a category of drugs, such as generic drugs, are the enrollee's drugs among those that are covered?
• If coverage is provided, are the cost-sharing requirements higher?
• Whether the pharmacies in the plan's network include:
• The pharmacies used by the beneficiary
• The pharmacy used by the long-term care facility in which the beneficiary resides
• Whether there are price differentials among pharmacies in the network
• Whether mail-order is allowed or required
• The price differential for mail order, including whether mail order drugs cost more
• The number of days covered in each prescription (Example: 30, 60, 90 days)
• Whether the plan offers supplemental benefits:
• Coverage in the donut hole (keep in mind the phased-in closing of the donut hole starting in 2011)
• Coverage for generic drugs only
• Coverage for generic and brand name drugs
• How the plan coordinates with a State Pharmaceutical Assistance Program that may be available in the state. See http://www.medicare.gov/spap.asp for an up-to-date list of SPAPs that work with Medicare Part D)
• Who is the plan sponsor? Has the entity been in the community for a while? Is it reliable?
• The "Transition" process used by the plan (Temporary use of drug not covered by plan)
• Whether the individual has other insurance that covers prescription drugs:
• Through a Medicare HMO or other Medicare Advantage plan. If so, the individual must keep getting drug coverage through that plan if she wants to stay in that plan
• Through a retiree health plan. If so, has the former employer told the individual whether the insurance is as good as or better than Medicare's coverage (i.e., "creditable coverage") for 2011? If it is creditable coverage, the individual may stay in that plan without getting a late penalty on the premium if he or she later decides to change to a Medicare drug plan.
• Employers may change the coverage they provide. Drug coverage that was creditable in 2010 may not be creditable in 2011. Some employers that offered creditable drug coverage in 2010 may want retirees to enroll in a Part D plan in 2011, and will subsidize some Part D costs.
• Individuals with coverage through the Veteran's Administration, TRICARE, Federal Health Employee Benefit Plan, Railroad Retirement Board, Program All-Inclusive Care for the Elderly (PACE), or Indian Health Service, may continue receiving prescription drug coverage through one of those plans if that coverage is as good as what is offered from Medicare prescription drug coverage.
• The amount of the monthly premium
• The cost sharing for doctor visits
• If the plan charges a flat amount such as $25 per visit to a specialist, is this amount more or less than the 20% cost sharing under traditional Medicare?
• If the plan is a preferred provider organization (PPO), will the enrollee pay more than traditional Medicare to see a non-preferred doctor?
• How does the plan's cost-sharing (including out-of-network cost-sharing in a PPO) compare to the cost sharing under traditional Medicare for:
• Hospital care,
• Skilled nursing facility care,
• Home health care,
• Durable medical equipment (DME),
• Part B drugs (including cancer drugs)
• What is the plan's Maximum Out of Pocket limit (MOOP)?
• Is the MOOP the highest allowable amount of $6,700 in 2011, meaning the plan has less flexibility in what it can charge in cost-sharing for services in comparison to Traditional Medicare
• Is the MOOP a lower amount, meaning the plan has more flexibility in what it can charge in cost-sharing for services in comparison to Traditional Medicare
• Are the doctors, hospitals, and other health care providers the enrollee uses or might expect to use in an emergency:
• Part of the Medicare Advantage plan's network of providers if the plan is an HMO or PPO
• For Private Fee for Service (PFFS) plans offered in areas where there are not at least 2 local HMOs or PPOs (in other words, where PFFS plans will be able to operate under previous rules allowing them to forgo setting up a network of providers) – are providers willing to accept payment under the plan for all services?
• Does the plan require a beneficiary or doctor to seek prior authorization or prior approval before covering or paying for an item, service or procedure?
• Will the beneficiary have to pay more if he or she does not let the plan know before obtaining an item, service, or procedure?
• If the plan provides extra benefits such as vision or hearing benefits, are there limitations on the benefit, such as dollar caps on the cost of eyeglasses and hearing aids?
• If the plan provides extra benefits such as health club membership or bicycle helmets, are these benefits of value to the enrollee?

In summary: look before you leap!