Last fall my agency logged literally thousands of calls from our clients concerned about Obamacare affecting their Medicare coverage. Beginning in January of 2014, the Obamacare legislation created new guidelines that apply to individual health insurance policies. However, that only applies to people under age 65. Persons eligible for Medicare MAY NOT PURCHASE insurance in the individual marketplace, nor may they receive a subsidy.
This essentially means that Obamacare DOES NOT APPLY to people on Medicare. The good news about that is that you most likely do not need to change your Medicare-related insurance.
Let’s take a look at the two main types of Medicare-related insurance.
Medigap/Medicare Supplements: No Change
If you are on a traditional Medicare supplement like a Plan F, your insurance is not changing at all. People over age 65 will continue to have original Medicare as their primary insurance. Your existing Medigap plan will have the same benefits and coverage as it always has had.
Some people have asked our agency whether they should investigate individual health insurance plans under Obamacare instead. The answer to that question is NO. People on Medicare are NOT ELIGIBLE for individual health insurance plans under the Affordable Care Act.
Read more about Medicare supplements here.
Medicare Advantage: Funding Cuts under Obamacare
The Obamacare legislation did not change the nature or benefits of Medicare Advantage plans. These plans will continue to be available to consumers like you. However it DID change the funding for Medicare Advantage plans.
As the plans receive lower federal funding in the years ahead, you may see increases in your costs related to the plan. So if you have an HMO or PPO plan with a private insurance company where you pay copays for medical services to healthcare providers that are in the insurance company’s network, then over the next few years, you may see some changes.
When the federal government slashes funding for these plans, there a few predictable things that may happen. First, you may see an increase in the monthly premium that you pay for your Medicare health plan. For example, many Medicare HMO plans have had monthly premium of $0 in the past. You may see going forward that the insurance companies must now charge a premium. This premium might be something minimal like $20/month, but there could be plans out there that will see higher jumps in premium.
Likewise, some of the copays for services on these plans may also increase. As an example, perhaps your plan in 2013 has charged a $5 copay when you visit your primary care doctor. In 2014, you could be notified that the premium has increased to $10 per visit. Similarly, hospital stays may have higher copays. If your current plan charged you $150/day for hospital stays, be sure that you check to see what the new copay is in 2014 because it’s possible that is increasing.
Some plans may also have to cut some of the extra ancillary benefits. If a plan provided vision coverage up until now, it may have to drop that benefit. They could reallocate that expense to sustain lower costs for the medically necessary base benefits of the plan instead.
Read more about Medicare Advantage plans here.
Your Annual Notice of Change Letter
The easiest way to learn about any changing benefits in your Medicare Advantage plan is to review the Annual Notice of Change letter that you receive from your insurance carrier each year in September. This document outlines all the benefits in 2013 that have a benefit change for 2014. It will lay out all the changes side by side so that you can see the increases and decreases.
Be sure to check the document carefully to see other changes that may affect you as well, such as changes in the plan’s drug formulary. If a plan drops coverage of a certain medication or moves the costs of the drug to a higher copay tier, then these are changes you will want to be aware of.
If you have more questions about Obamacare and how it may affect your current coverage, please feel free to contact us for personal assistance.