Gains and Losses Reshape Medicare in 2018
For seniors, changes to Medicare premiums can make a big difference to their monthly bottom lines. In 2018 retirees are set to enjoy the largest Social Security cost-of-living increase since 2012, but rising Medicare premiums could take a bite out of these gains.
While the Social Security cost-of-living adjustment (COLA) has yet to be announced, trends suggest there will be an increase of 2 percent.
This is welcome news for seniors who have seen their buying power drop 7 percent over the last year. With healthcare inflation rising an average of 5.47 percent annually, COLA will struggle to keep up in the coming years.
According to Reuters, a couple reaching age 65 this year will spend 59 percent of their Social Security benefits on healthcare, while a couple turning 55 this year may end up spending 92 percent.
Medicare Advantage (MA) — the private, managed-care version of Medicare — has tripled enrollments from 5.3 million in 2004 to 19.0 million. With the government paying private health plans for the members they cover, changes in coverage, providers, and plans occur yearly.
Medicare Advantage provides traditional Medicare coverage plus extras like dental, vision and Medicare Part D prescription drug coverage. Since cost-sharing, co-pays, provider networks and drug coverage differ significantly between plans, comparing costs during Medicare’s open enrollment period (beginning Oct. 15 and ending Dec. 7) is crucial to getting the best care possible.
Though one-third of all Medicare recipients are enrolled in MA plans, some seniors with chronic illnesses have struggled to find care in smaller networks with fewer specialists. A recent study of 126 MA plans found that 35 had a high number of sick people dropping out due to an inability to find the care they need.
Alarmingly, 147 counties in 14 states will have no MA insurer in 2018. Therefore, seniors may want to look into Medigap, which pays for expenses not covered by Medicare Part A and Part B, or consider switching to a Private Fee-for-Service (PFFS) plan or a PPO that covers out-of-network providers.
When comparing plans during open enrollment, be sure to check out the number of nearby specialists in your provider network, and make sure your primary care physician is also covered — especially if you live in a rural area with fewer options.
Whether you’re comparing plans or just seeking advice, consult your State Health Insurance Assistance Program, which offers complimentary healthcare counseling designed to help you compare your insurance options.
Lower Drug Premiums
For the first time in five years, Medicare Part D prescription drug coverage is expected to decrease in 2018. That’s good news for 43 million Americans who will see their premiums drop to $33.50 a month — a savings of 3 percent!
However, it’s important to remember that drug plan premiums vary depending on a plan’s deductibles, copays, enrollee income levels and the kinds of prescriptions covered.