A guide to Medicare changes for 2011

By Daniel Workman


Seniors on fixed incomes are particularly vulnerable to significant Medicare changes to be carried out in 2011.

Federal government subsidy cutbacks have resulted in widespread revisions to Medicare Advantage plans (private plans subsidized by Medicare). Plan changes involve many revised benefits, premiums, deductibles, co-insurance and co-payments.

Some private plans won't be back for 2011, including UnitedHealth Group's popular AARP Medicare Saver drug plan.

Meanwhile, new plans, like the low-cost Humana Walmart-Preferred Rx plan, are being introduced in 2011, with a monthly premium of $14.80. According to AARP, that amount is well below the average price for Medicare Part D (prescription drug) policies. However, buying preferred brand-name drugs from an outside drugstore instead of at Wal-Mart, Sam's Club or RightSourceRx mail-order pharmacy will almost double the co-insurance amount from 20 percent to 37 percent.

During the first 45 days of 2011, enrollees dissatisfied with their new Medicare Advantage plans can switch back to original Medicare.

Free and improved Medicare benefits
Medicare will introduce free benefits in 2011 for preventive care. Traditional Medicare plans and most Medicare Advantage plans will pay 100 percent of the costs for one annual wellness checkup.

Other free preventive care services include blood pressure, depression and diabetes screenings; colorectal cancer tests; mammograms; and counseling about healthy diets and tobacco use.

Then there are improvements that will help seniors cope with coverage gaps.
Currently, if a year's drug expenses surpass $2,830, patients find themselves in a controversial coverage gap commonly known as the "donut hole." While in the donut hole, seniors on Medicare must pay 100 percent of the cost of medicine until their out-of-pocket expenses reach $4,550 and catastrophic coverage finally kicks in. In 2011, Medicare beneficiaries in the donut hole will qualify for discounts of 50 percent on brand-name prescription drugs. Given that AARP's August 2010 Rx Price Watch Report found that the price of prostate drug Flomax soared 92 percent between 2005 and 2009, this discount could represent a substantial savings for Flomax users.
Generic drugs that beneficiaries buy in the donut hole will get a 7 percent discount in 2011.

But there's even more good news for those who find themselves in the donut hole. The full retail price of the brand-name or generic drug will be credited toward satisfying the threshold for catastrophic coverage, rather than the discounted price.

Excluding premiums and prescription drug costs, annual out-of-pocket medical expenses for most Medicare Advantage plans are capped at $6,700 for 2011. Some plans have much lower limits, but traditional Medicare still will have no out-of-pocket maximum.

Another upcoming change for 2011 is of interest to those with Medicare Advantage plans, which are provided by private insurers. Starting next year, consumers will be eligible for rebates from health plan providers if the share of their premiums spent on care falls below a certain percent -- 80 percent for individual and small group plans and 85 percent for plans in the large-group market, according to the Kaiser Family Foundation.

Medicare tools and tips for 2011
Seniors need to carefully research Medicare plans to find the one that meets their specific needs. Fortunately, there are some online tools to facilitate those searches.

First, consumers can visit HealthCare.gov, which has links to 5,600 insurance plans offered by more than 1,000 companies in all 50 states and the District of Columbia. In the future, a price comparison feature will be.

Another key tool is Medicare.gov's online plan finder. Based on Zip code, the plan finder helps compare total out-of-pocket costs, including premiums based on a consumer's specific medications and dosages.

While using these search tools, seniors should not fixate on plans charging the lowest premiums. Beneficiaries could end up paying more out-of-pocket expenses than under more comprehensive plans with higher premiums.

Finally, seniors should ask their doctors whether they can switch to generics or other lower-cost drugs before choosing a plan for 2011. The plan with superior coverage for brand-name medications might be different from the best plan for generic drugs.