Medicare Plans in 2011: What You Need to Know

It's time to review your coverage options for the coming year

by: Patricia Barry, from: AARP Bulletin, November 15, 2010

Editor's note (July 2011): The following article, posted during Medicare's open enrollment period last year, analyzed the drug and health plan options available in 2011. The next enrollment period — for choosing 2012 Medicare plans — will run from October 15 through December 7. This is a date change from previous years.

Once again it's time for people with Medicare to review their drug and health plans and, if they want to, switch to another plan with better benefits or lower costs.

Changes at a Glance

Pay attention to Medicare's enrollment deadlines. — Photo by: Horacio Salinas/trunkarchive.com

Costs: If you fall into the Part D "doughnut hole," you'll get a 50 percent discount on brand-name prescription drugs.

Premiums: If you pay higher-income premiums for Part B, you'll also pay a higher premium for Part D drug coverage.

Choice: Some current plans will no longer be available, but you'll still have plenty to choose from — between 28 and 38 prescription drug plans in each state, and at least 10 Medicare Advantage plan options in all but 29 counties.

Free services: Traditional Medicare and most Medicare Advantage health plans will charge nothing for an annual physical and many preventive services such as mammograms and prostate cancer screenings.

Capped costs: Annual out-of-pocket medical expenses (excluding premiums and prescription drug costs) in most MA health plans will be capped at a maximum $6,700 for 2011. Some plans have much lower limits.

In the past, relatively few people took this opportunity. But major changes for 2011 — some the result of the new health care law — make it important to pay attention to what's in store for next year.

Being a savvy consumer means reviewing your current plan's costs and benefits for next year, which are all itemized in the "Annual Notice of Change" letter that the plan has sent you; comparing your plan with others available; and then, if you choose to switch, signing up with a different plan during open enrollment, which began November 15 and ends December 31.

Here's a checklist for assessing changes in 2011, for those enrolled in a "stand-alone" drug plan — your plan if you receive your medical benefits through the traditional Medicare program — and for those in a Medicare Advantage plan, which provides medical benefits and drug coverage in one package.

Will my plan still be there next year? Some drug and health plans will disappear in 2011 for specific reasons — though not as a result of the new health care law.

Drug plans: Some won't be available next year, because of new Medicare rules that officials say are designed to offer consumers clearer choices between plans. Any insurer offering two or three plans must now make each plan's benefit package significantly different — for example, by offering a much lower premium in one plan or coverage in the gap known as the "doughnut hole" in another.

Among the plans that won't be offered in 2011 are two of the largest: the AARP MedicareRx Saver plan, with more than 1.5 million enrollees, and the PrescribaRx Bronze, with more than 480,000. If you're enrolled in any plan that is unavailable next year, you'll automatically be switched to another offered by the same insurer, or you can choose a different plan during open enrollment.

Although fewer drug plans will be available in 2011, some new ones will arrive in the market and there will still be plenty of choices in every state — from 28 plans in Hawaii to 38 in Pennsylvania and West Virginia.

Health plans: Many people enrolled in the Medicare Advantage program — a collection of mainly HMO and PPO managed care plans — fear their plans will disappear because the new health care law will gradually reduce the government subsidies these plans have received for the past seven years. But that process doesn't begin until 2012.

However, some non-managed-care plans known as private fee-for-service (PFFS) have chosen to pull out of the program because of a different 2008 law that takes effect in January. For the first time, most of these plans will be required to establish contracts with doctors, hospitals and other providers — something HMOs and PPOs have always had to do — so that enrollees can be sure which providers will accept their plan. As a result, the number of PFFS plans nationwide will drop from 435 to 239 in 2011.