Medicare beneficiaries should have received (or shortly will be receiving) their Annual Notice of Change (ANOC) documents that outline changes in their current Medicare Advantage Prescription Drug (MAPD), Medicare Advantage and stand-alone Prescription Drug plans.
Plan benefits change every year and, in particular, it's important to check how your drugs will be covered for the coming year. Tier levels change on some medications [e.g. a medication like carbamazepine may be changed from tier 2 to tier 3; utilization management techniques (quantity limits, prior authorization, and step therapy) may be instituted or be changed; and co pays or coinsurance amounts on medications may change].
There will also will be changes to medical benefits in the Part C (medical) portion of Medicare Advantage or Medicare Advantage Prescription Drug plans.
As soon as you receive your ANOC we recommend that you read the document, determine how medical and non-medical items like vision, dental and will be changed and, possibly most important, check your medications to see how they will be covered in 2018. Many individuals assume that all drug plans cover the same medications at the same co pay/coinsurance, but this is not true. Drug plans must meet minimum CMS requirements, but formularies (the list of covered drugs) differs between carriers and co pay and coinsurance levels differ, as well.
There will be changes in stand-alone drug plans next year and one or more new stand-alone drug plans will be introduced.
Preferred Pharmacy Changes: Determine Who Your Preferred Pharmacies Are (This Could Have Changed From 2017)
Also, some carriers change preferred pharmacies (primarily between Walgreen's and CVS). Walgreen's may have been a preferred carrier for 2017, for example, but the carrier may have negotiated a new contract with CVS (or vice versa) that provides better drug pricing. Although not all drug plans are affected, a number of plans switch between Walgreen's and CVS as preferred providers. If your plan offers both preferred and standard pharmacies (some plans have both preferred and standard network pharmacies while others make no distinction between preferred and standard pharmacies), you'll receive lower pricing by using a preferred pharmacy, where applicable, and it's important to know who the preferred pharmacy(ies) will be for 2018.
You can check out drug plan changes and pricing on carrier websites or on the plan finder at
www.medicare.gov. The 2018 plans should have been posted by the time you receive this newsletter or will be shortly.
2018 Guide To Medicare
You'll also soon be receiving (or already have received) your annual
Guide to Medicare. This is a very important document to retain, and it also contains summaries of Medicare Advantage and Prescription Drug plans that will be offered in your area for 2018.
Significant Changes to 2018 Part D IRMAA: 35% To 58% Payment Increases For Individuals Earning Incomes Between $135,000--$214,000 And Couples Earning $267,000--$428,000
Since 20111, people with Medicare who earn over $85,000 have been paying an ADDITIONAL monthly premium or Income-Related Monthly Adjustment Amount (IRMAA) for their Medicare Prescription Part D coverage--whether on a stand-alone basis or when included with a Medicare Advantage Prescription Drug Plan. [In addition, people with Medicare who have higher incomes also pay a separate IRMAA for their Medicare Part B (medical) coverage].
Also, starting back in 2011, Medicare Part D IRMAA payments were determined by using five (5) income levels. These income levels have remained constant through 2017. However, the limits of these five income categories will change in 2018 based on the passage of the Medicare and CHIP Reauthorization Act of 2015 (also called the "Doc Fix" law).
Starting in 2018, Medicare Part B beneficiaries formerly in Part D level four (4) will be merged into level five (5), and level three (3) will be split into level three (3) and level four (4). These income level changes can be seen in the following
chart and the result is that some people will pay considerably higher Part D IRMAA in 2018 (up to a 58% increase)..
The 2018 Medicare Part D Income Related Monthly Adjustment Amounts (IRMAA) (and new income levels) are shown in two charts. Please note that an individual with MAGI between $133,500 and $160,000 will see a monthly IRMAA increase from $34.20 per month to $54.20 per month--paid in addition to their Part D premium, their Medicare Part B premium, and their Medicare Part B IRMAA. The IRMAA increase is also applicable for people filing taxes jointly with MAGI between $267,000 and $320,000. (See this
chart
to see how single individuals and individuals filing jointly are affected.)
In addition, the monthly IRMAA rates to be paid by beneficiaries who are married and lived with their spouse at any time during the taxable year, but filed a separate tax return from their spouse are as shown in this
chart.
Here are a few additional notes and reminders about IRMAA:
- The additional monthly Part D IRMAA is not collected by the Medicare Part D plan, but instead is paid directly to the Federal government.
- 2018 IRMAA is calculated using the most recent tax returns available to the IRS--for 2018, this would in most cases be your 2016 tax returns that were filed in 2017.
- "Income" for purposes of IRMAA is defined as Modified Adjusted Gross Income (MAGI). MAGI is calculated as your total adjusted gross income (AG) including your TOTAL Social Security benefit and tax exempt interest income.
- The amount of your IRMAA is directly deducted from your Social Security, Railroad Retirement Board, or Office of Personnel Management benefits.
Pre-AEP
The Pre-AEP period started October 1 and runs through October 14. During this period agents can discuss plans with you but you can NOT enroll you in a new plan until October 15, when the annual (open) period for 2018 starts. This period runs through December 7 for a January 1, 2018 effective date.
We'll Be Communicating With You
If you're a client, you should be receiving a card from us that suggests you check out your plan for next year. You don't need to do anything if you decide to keep your present plan, but if you want to change plans we'll help you complete the required, new enrollment form.
During the first week of October we'll be attempting to call all our Medicare clients to determine what they'd like to do for 2018. The annual enrollment period runs from October 15 to December 7 but Obamacare enrollment will occur on an overlapping and compressed basis (it will run only between November 1 and December 15). Agents will be hard-pressed to service all their existing clients this year, so it's a good idea to determine your 2018 plan choices as early as possible this year.
