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FAQ of the Month

If I am actively working or my spouse is actively working with employer group health benefits and I turn 65, do I have to join Medicare?

The typical answer is NO, but the size of the company determines if you need to join Medicare.  If there are fewer than 20 employees, you should sign up for Parts A & B as Medicare will become your primary coverage.

If there are 20 or more employees, you may delay enrollment without penalty until later, usually at retirement.  If you’re eligible for premium-free Part A, you can enroll in Part A at any time after you’re first eligible for Medicare.*


The best action is to ask your company what impact Medicare will have on your benefits.

*If you are participating in a Health Savings Account, be careful.  Enrolling in Part A may have tax implications.  Be sure to stop contributing to your HSA 6 months before you enroll in Part A.

Annual Enrollment

Do I REALLY Have to Review My Medicare Part D Prescription Plan During Annual Enrollment?   

If you have been on the same Medicare Part D prescription plan for more than three years, you are probably paying too much for it!   It is important to realize that there are many moving parts to your Part D plan. Each of these parts may have an impact on the cost of your plan and each of these parts will most likely change from year to year. Five of the most important parts are the following:   · the drug plan premium 

· the drug plan deductible 

· your prescription costs 

· what pharmacy you use 

· your prescriptions   

First of all, it is rare that the premium for a Part D plan will remain the same for the new plan year. In August, the Centers for Medicare & Medicaid Services (CMS) announced that the average basic premium for a Medicare Part D prescription plan in 2018 is projected to decline to an estimated $33.50 per month compared to the actual average premium of $34.70 in 2017. This may have a slight impact on the new plan year costs. Each year the Part D insurance carriers re-calculate their rates and they are passed on to the Medicare beneficiary. There are approximately twenty-one drug plans in New Jersey so the competition can be fierce, which is good for the beneficiary, but the cost may increase.    

Secondly, the drug plan deductible typically increases each year as well. This is the dollar amount that beneficiaries pay for their prescriptions before the plan kicks in. For 2018, the highest amount for a plan’s deductible can be up to $405; it could also be less. It depends on the plan. Your current plan may be $0 or $360 or $400 or whatever they decide. But it is changeable.   One positive note is that some of the plans do not apply the deductible to Tier 1 and Tier 2 prescriptions. These are usually generic drugs that are commonly used by many patients and are fairly inexpensive. This encourages the beneficiary to use the generic version of their prescriptions because of the cost savings of the drug as well as not having to pay the deductible.   

The third moving part in a prescription plan is your prescription costs. Each year the insurance carriers negotiate the costs with pharmacy benefit managers and drug companies. The costs may cause the Tier levels of a drug to switch categories. A drug that was a Tier 4 non-preferred drug could move to a Tier 3 preferred brand drug bringing the cost down for the new plan year or vice versa. Depending on the carrier, a Tier 1 preferred generic drug with one company could be a Tier 2 generic drug with another company. Costs vary between plans, sometimes widely, and it is important to compare them.   

The fourth moving part is the pharmacy where you have your prescriptions filled. Many plans have “preferred” or “network” pharmacies where the price of the prescriptions will be the most cost effective. One year a particular pharmacy may be offering the best prices overall and the next year a different pharmacy comes out ahead. It rarely stays the same because they are dependent on the prices that are charged by the pharmacy benefit managers.   

Of course, the final moving part is your prescriptions. No one knows if your health will stay the same from year to year. You may stop using certain prescriptions as your health improves or the opposite may occur. The dosage of the drugs you’re taking may change. You and your doctor may decide to try something new that might be more effective. It could be a new generic drug that brings your costs down, or it could be a new drug that is very costly but worth a try if it will improve your health.   

So if the cost of the premium only goes up by a few dollars a month, you may think it is not worth researching a new plan.    If the deductible goes up by a few dollars or your plan now requires the deductible on Tier 1 and 2 drugs, you may think it is not worth researching a new plan.    You may not know your prescriptions costs until you go to fill them for the first time in the new plan year and are shocked at the new costs, but there’s nothing you can do until the next Annual Enrollment because you never got around to researching a new plan.    Your pharmacy may have been on the losing side of the new plan year’s negotiations and the pharmacy across the street has a better rate, but you have no idea that this has happened because you haven’t researched a new plan.    Lastly, your doctor may have changed your prescriptions and the plan that was cost effective three years ago when you chose it may not be your best bet for the new plan year, but you really don’t know because you haven’t researched a new plan.   If only one or two of these components goes up, it may have little impact on your costs. But if most of them go up over a few years, there can be a significant increase in your out-of-pocket expenses.   

So do you REALLY have to review your Medicare Part D prescription plan during Annual Enrollment? My experience working with many clients says “yes!” The savings can range from a hundred dollars to over a thousand depending on how many years it’s been since you last reviewed your plan. Doesn’t that make it worth researching a new plan this year?     Mary Jeanne Cullen www.medicareassistnj.com  

Getting Help

www.ssa.gov- the United States Social Security website where you can find your closest office and enroll in Medicare.
www.Medicare.gov- the official U.S. Government site for Medicare.
www.benefitscheckup.org- finds benefit programs that can help you pay for medications, health care, food, utilities and more.