For older Americans, Dec. 7 will always be remembered for Pearl Harbor.
But this year, that date is important for another reason. That's when Medicare's open enrollment period will end.
In the past, people could wait until the end of the year to pick their Medicare coverage for the following year. But that timetable has been moved up.
Open enrollment began Oct. 15 and will end Dec. 7.
That means America's 48 million Medicare beneficiaries now have six more weeks to review and revise their 2012 coverage plans. People can sort through drug coverage options. They can debate original Medicare versus private managed care. They can compare premiums, copayments and expected costs.
But by close of business on Dec. 7, they must settle on a plan or Medicare will simply reassign them to their current arrangement.
"We are telling people to get this done by Thanksgiving," says Joe Baker, president of the Medicare Rights Center, a consumer advocacy group. "Do your research early before you get wrapped up in the holiday season."
Even if you are happy with this year's coverage, it's important to research your options, Baker says. That's because insurance plans change their benefits and premiums from year to year.
If the cost of just a few of your medications changes, your out-of-pocket spending could go up or down by several thousand dollars. Other plans might offer you a more competitive package this year.
This issue of LifeTimes is designed to help you make choices. Charts list basic aspects of different plans. One story will guide you through Medicare's website — by far the best way to compare costs based on your particular circumstances. Another story explains Medigap insurance and how it fits in with your other Medicare options.
Let's get started.
Understand how Medicare works
Under original Medicare, Part A covers inpatient hospital care and a few other services. You get this automatically with no premium.
Part B covers outpatient hospital care, doctors' services, physical therapy and more services. This is optional and costs most people a monthly premium that is deducted from their Social Security check. If you don't sign up for Part B when you become eligible for Medicare, you may face a stiff penalty for the rest of your life if you need these services later. People with higher incomes may pay a higher monthly premium.
Part D covers prescription drugs. You buy these plans from private insurance companies for a premium as low as $15.10 a month, and they defray the cost of your medications.
These are the components of original Medicare. (For those who are curious, the term "Part C" is no longer in use.)
All parts of original Medicare carry deductibles and copayments that can add up to hundreds, if not thousands, of dollars a year.
Sometimes, health insurance from employers or unions will pay deductibles and copayments. Some people may cover them by buying "Medicare supplement" policies, known as "Medigap." Premiums tend to be high, but if you suffer a catastrophic illness, Medigap policies can pay off.
Several types of "Medicare Advantage" health plans provide alternatives to original Medicare. This is private managed care — usually an HMO or PPO — where you typically get service within the plan's network of providers.
You still have to pay a monthly Part B premium to get a Medicare Advantage plans, although some rebate part of that premium.
Medicare Advantage plans are subsidized by taxpayers and usually turn out to be less expensive than original Medicare — though not always.
They may offer some vision, hearing and dental benefits that original Medicare does not. Some may even offer transportation to a doctor.
The tradeoff is that original Medicare lets you pick any doctor or hospital in the country, whereas Advantage plans often restrict you to a network or charge a hefty fee if you get service outside the network.
Say you want treatment at a specialty cancer center or top-notch heart clinic in another state. Then original Medicare will usually be much cheaper than a private health plan.
Also, some Advantage plans skimp on coverage for hospital or skilled nursing care. Pay close attention to those benefits when picking a plan. Don't just choose the plan with the cheapest premium.
Many Advantage plans include drug coverage, but a few do not. The charts in this section list only Advantage plans that cover drugs.
Get drug coverage
Unless you already have prescription drug coverage through the Veterans Affairs Department, a union, an employer or some other comparable source, it's important to get some kind of drug coverage — either a Part D drug plan if you are on original Medicare or a Medicare Advantage health plan that covers drugs.
You should get coverage even if you don't use any prescription drugs.
It won't cost much — you can buy a Part D plan for less than $200 a year and some Advantage plans do not charge extra for drug coverage. If you get sick during the year, you may need an expensive drug and will be happy that you paid for coverage up front.
Medicare holds down costs by having healthy people contribute to drug plan pools. If you decline drug coverage now, the government will impose a stiff penalty if you want to sign up for it later.
Turn on a computer
The charts in this section compare estimated costs based on a hypothetical person in good health. But depending on your health and the drugs you take, the costs of plans can vary widely from those estimates.
The only good way to compare costs tailored to your circumstances is with Medicare's online "plan finder," which factors in your general health condition and the cost of your particular drugs.
If you don't use a computer, find a friend or family member who does. Look for the story in today's section that explains the ins and outs of using the Medicare's website.
Drug coverage and the gap
When Medicare started paying for prescription drugs in 2006, Congress wanted to offer the most protection to people with huge drug bills while making sure that all beneficiaries shouldered a share of the cost.
The result was what Medicare calls the "coverage gap," often called the "doughnut hole."
Whether you buy a stand-alone Part D drug plan or a health plan with drug coverage, it works like this:
You may pay a deductible, though many plans waive it. Then you are responsible for copayments for each drug you purchase. Copayments can range from nothing for generics to $70 or more for brand-name drugs. Your insurance plan negotiates a price from the pharmacy and pays any remaining balance.
You reach the coverage gap when the total cost of all your drugs for the year reaches $2,930, a threshold set by Congress. Note that the total cost is calculated by what the insurance company pays the pharmacy, not just your share. If your plan buys your drugs for $500 a month, but charges you only $100, for example, you will hit the coverage gap in less than six months because the total cost will have reached $3,000.
In the coverage gap, you pay the bills unless your insurance plan offers additional coverage. Some plans cover no drugs in the gap. Some cover only generics. Some cover generics, plus a few brand-name drugs. Because of the Affordable Care Act, plans must now offer 50 percent discounts on brand-name drugs in the gap and a 7 percent discount on generic drugs.
You stay in the gap until your out-of-pocket expenses for the year total $4,700. Then the plan must offer you "catastrophic" coverage, where you make only small copayments for generic and brand-name drugs.
Your deductibles and copayments count toward your costs, but drug plan premiums do not.
Discounts you receive in the gap count toward this out-of-pocket expense. For example, if a drug costs $100 and you get a 50 percent discount, you will pay $50, but the full $100 will count toward getting you out of the gap and into catastrophic coverage.
Other things being equal, Part D drug plans or health care plans that offer gap coverage are usually better than plans that don't. Even if you take few drugs now, your health could deteriorate next year and coverage in the gap could save you a lot of money.
For low-income people
People with limited income and minimal assets may qualify for subsidies that can dramatically lower their out-of-pocket costs for a Part D drug plan or a Medicare Advantage plan that covers drugs.
A single person could qualify with a 2011 income of less than $16,335 and liquid assets of less than $12,640. A married couple could qualify with an income of less than $22,065 and assets of less than $25,260. (Liquid assets include stocks, cash and savings accounts. Ownership of homes and cars, for example, is not counted.)
If you fall below these thresholds or are just a little above them, contact the Social Security Administration to see if you qualify. Call toll-free 1-800-772-1213 or apply online at www.socialsecurity.gov.
People on Medicaid receive premium subsidies for their Medicare coverage. The state usually notifies them that they should pick a drug or health plan where the subsidy covers the entire premium cost — but that could be a mistake.
Sometimes a low-premium plan won't cover important drugs you need, but a competing plan will. After the subsidy, you may have to pay only a few dollars a month in premium but then your expensive drugs are covered.
Run your drugs through Medicare's plan finder to find the best plan for you. Don't just accept a plan the state suggests.
Florida's SHINE program, administrated by the Department of Elder Affairs, offers volunteers who can help people over 65 and disabled people with insurance issues. When you call for an appointment, the volunteer will call you back. They are trained to use Medicare's website to help you find a personalized plan.
Before you contact SHINE, make a list of all your drugs, dosages and monthly usage. Call the Florida Senior Hotline toll-free at 1-800-963-5337 from 8 a.m. to 5 p.m. weekdays. You will be referred to the nearest SHINE office.
You also can call Medicare toll-free at 1-800-633-4227 and get help. These government workers generally do not have as much time to spend with you as SHINE volunteers do.
Stephen Nohlgren can be reached at [email protected] or (727) 893-8442.