I've noticed two articles recently on Fox Business that are loaded with Medicare errors and confused statements. These aren't politics-related stories or opinion pieces but sort of how-tos for senior citizens that are just plain wrong1. The latest example claims
“Starting on Oct. 15 and ending Dec. 7, those about to be or already eligible for Medicare can enroll for the first time in the Medicare Part D prescription drug program or change their existing health coverage.”
Those about to be “eligible for Medicare” can enroll in Part D or Part C whenever they become eligible. For D, the person would have to already be enrolled in at least Part A. For C, the person would have to be enrolled first in Parts A and B. The newly eligible do not have to wait for open enrollment.
This includes people over 65 just now retiring as long as they have had creditable coverage at their employers
“Open enrollment is the one time of the year enrollees can see what changes are being made to Medicare and change benefits accordingly.”
You can’t really change benefits, just plans. The new Medicare benefits are whatever they are. A senior could change to a Part C Medicare Advantage plan that has different benefits than their previous plan or Original Medicare.
“While the Health Care Reform Act will usher in changes in 2013, the Department of Health and Human Services says the average monthly premium for basic prescription drug coverage won’t change next year and will be $30.”
The use of the word “average” by HHS is very misleading. In Massachusetts for example, the six most popular plans' premiums have gone up in cost by 15%-25%. The insurance companies then introduce less desirable plans so that they can claim the average premium has not changed.
“According to the Center for Medicare and Medicaid, the initial deductible of Medicare Part D will increase by $5, the initial coverage limit will increase by $40 to $2,970 and the coverage gap will start once you’ve reached Medicare Part D plan’s initial coverage limit of $2,970 and ends when you spend $4,750.”
It is important that seniors understand that the $2970 is the “retail value” of their drugs according to their insurer’s agreement with their pharmacy. You don't enter the donut holde after you've spent $2970 but after you insurer has paid your pharmacist for $2970 worth of drugs at whatever they have agreed the drugs' retail value is. The $4750 on the other hand is the senior's theoretical out of pocket cost but it can also include the discounted amount while in the donut hole.
So the senior might enter the donut hole after spending "only" about $750 but then actually spend “only” about $2700 to exit the hole. After exiting the hole, the drugs are discounted 95%. The good news is that only 1% of seniors spend this much and only about 7% even reach the beginning of the donut hole, the $2970 retail-price level.
Low income seniors are never affected by the donut hole and also receive free insurance and nominal co-pays. And as described here, many states have State Pharmaceutical Assistance Programs that even reduce middle income seniors exposure to the donut hole
“With a Medicare Advantage Plan you have to choose doctors and hospitals in the plan’s network and in addition to a monthly premium, you could be on tap for co-payments and coinsurance for covered services.”
It is important to note that although with Original Medicare seniors can choose any doctor or hospital that accepts Medicare -- and that accepts new Medicare patients – the co-payments and co-insurance for Original Medicare are almost always much higher than with Part C Medicare Advantage. Also Original Medicare does not offer catastrophic coverage whereas Part C Medicare Advantage must offer catastrophic coverage.
You won't hear this from me often but for the straight skinny on Medicare, stick with the government's prime sources: medicare.gov and a SHIP volunteer at your local senior center. I haven't seen many reporters that understand Medicare well enough to write about it accurately and those that do have an agenda to either sell insurance or sell a political point of view.
-- Dennis Byron
1 Typically I would just write the author with this non-opinion sort of stuff but Fox Business does not allow that.