Your New Medicare Card is Coming

New Medicare CardYou read about identity theft every day and we are deluged with information about various ways to protect ourselves. Nevertheless, those of us over 65 carry a Medicare card in our wallet or purse that, in most cases, displays our Social Security Number (SSN). Despite all the concern about protecting that sensitive SSN, the government has insisted on using that number for Medicare for many years. That is about to change!

The Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, contained a provision requiring the Centers for Medicare and Medicaid Services (CMS) to remove SSN’s from Medicare cards. Beginning in April, CMS will begin sending out new cards to Medicare recipients with an ID number that is randomly generated and bears no resemblance to your SSN. The cards won’t go out all at once but some will be mailed out each month until the process is finished in April 2019.

According to the CMS Press Release last month, “The goal of the initiative to remove Social Security numbers from Medicare cards is to help prevent fraud, combat identify theft, and safeguard taxpayer dollars,” said CMS Administrator Seema Verma. “We’re very excited to share the new design.”

After testing 10 different designs, CMS ended up staying with the familiar red, white and blue theme as shown in the photo above. The new cards will go out to about 58 Million people with instructions to securely destroy their old card once the new one is received. Even with the new card, Medicare recipients are advised to keep their Medicare Claim Number confidential to avoid claims fraud and abuse.

3 Reasons Not to Ignore Medicare AEP

AEP (Annual Election Period) for Medicare Advantage and Part D Drug Plans starts on October 15 and ends on December 7. Even if you have no complaints about your current plan, there are three reasons why it is still a smart move to review your options.

  • Your Plan Benefits or Premium May Be Changing: Every year companies review the plans and often change the premium and the actual benefits. Prior to AEP, they will send you notification of changes but many people ignore the notice. For instance, your plan may add a Drug Deductible of $300 to upper tier drugs and you will suddenly find that out in January when you refill your prescription. Or, they may have changed the “per day” hospital copay from $250 to $400. With an average hospital stay of just over 2 days, that means your next inpatient visit will jump from $500 to $800. And, of course, all companies adjust their premiums so the plan that was the best value for you last year may not be this year.
  • Your Particular Needs May Have Changed: During the past year, your doctor may have added a new prescription. You may find that your plan has a higher copay on that drug than another plan might. The copay for Outpatient Surgery or Primary Care Office Visits may have increased. You may now have a need for hearing aids or glasses for which many plans have benefits included. Some plans have Dental Care either included or available as extra-cost options. Many plans also include gym memberships at no additional charge.
  • Networks May Have Changed: Often the choice of a plan revolves around whether your doctor or specialists are considered “in-network” or not. Companies are always trying to expand their networks. A plan that did not include your doctor last year may include him this year, which now makes that plan a viable choice for you.

There is absolutely nothing wrong with being happy with you plan and continuing with it for years to come. If you decide to do that, you don’t need to do anything as the plan will be automatically renewed (as long as it is still being offered in your area) and your premium will be adjusted to the new year prices. On the other hand, It just makes good sense to take a few minutes during AEP to review the options to make sure your plan is still the best choice for your particular needs. Agents usually have all the details about the new plans by October 1. If you don’t have a local agent, and you live in the North Idaho area, feel free to contact me for an appointment at your convenience.

The Death of Plan F Medicare Supplements

Plan F is about to be killed by the Feds and you need to know that. For many years a Medicare Supplement Plan F has been considered the “gold standard” for supplements. There are two main reasons for this.

First, while most supplements pay the Medicare Part A (Hospitalization) Deductible, not all pay the Part B (Outpatient) Deductible. Plan F does this. Second, depending on the state you live in, doctors are allowed to charge up to 15% above the Medicare Allowable Charge for services. That means that Medicare pays 80% of the Allowable Charge, some supplements will then pay 20% of the Allowable Charge, but if the doctor charged 115% of the Allowable Charge then you are still on the hook for what is called the Excess Billing. Plan F covers that Excess Billing so you end with nothing out of pocket. Naturally, Plan F has carried a higher premium than other supplements but many people felt that the additional monthly cost was well worth the confidence of knowing that their doctor bills would be covered 100%.

Unfortunately, in 2015 Congress passed the Medicare Access and Chip Reauthorization Act (MACRA) which takes aim at Plan F as well as the less popular Plan C. In their “wisdom”, Congress decided that people who faced no out of pocket cost when visiting the doctor would simply be running to the doctor for every little sneeze or splinter and running up the costs to Medicare. Now, I don’t know about you, but going to the doctor’s office is not high on my list of social options regardless of the cost. Nevertheless, from the protective bubble that exists around Washington, DC, that’s how our elected representatives see it. So, within MACRA is a new rule that forbids the sale of any Medicare Supplement plan from paying the Part B Deductible after January 1, 2020.

No need to panic if you happen to have a Plan F because the new law allows anyone who has such a plan prior to the cutoff date to keep their plan. However, that option may have its own problems as well. In the insurance business, history has shown us that any time a health insurance plan stops accepting new (healthy!) enrollees, then the claims tend to rise above normal expectations as the remaining enrollees get older and sicker. When that happens, premiums tend to rise more than would be typical based simply upon the increasing cost of medical care overall. While no company representatives I have talked to expect the increases to be immediate, within four to five years they all anticipate Plan F renewal premiums to increase faster than other plans.

For new Medicare enrollees, and for those already on Medicare looking to switch plans, there is a very good alternative. Plan G pays those Excess Charges just like Plan F, but it does not pay the Plan B Deductible so it is not affected by the MACRA rule. As a bonus, some of my clients are finding that the premium savings for Plan G versus Plan F are more than enough to cover the Part B Deductible. Let’s look at the numbers.

The Part B Deductible for 2017 is $183, so the math is pretty simple. If, for instance, a Plan G will save you $20 per month over a Plan F ($240 per year) then you are saving more than the deductible and are money ahead. The only caveat is that the Part B Deductible usually increases each year. In 2016 it was $166, so it increased about 10% for the current year. It is conceivable that the deductible could reach $240 in another three years if that increase is stable. Personally, I would want to see no less than $100 per year in savings to give me at least a few years’ cushion if that was my sole reason for selecting a Plan G today. However, as noted above, the premium savings today might not be the sole reason if you also consider what will probably happen to Plan F premiums after 2020.

The death of Plan F is certainly not the end of the world with regard to Medicare Supplements, but it is important to be aware of the upcoming change so that you won’t be taken by surprise. You can find more information about Medicare Supplements for Idaho Seniors by clicking here to visit our page devoted to that topic.