AARP Bulletin - November 2011

Medicare Advantage Plans in 2012

Medicare Advantage plans provide an alternative way for people to receive Medicare benefits, typically through private HMOs and PPOs. The plans currently have about 12 million enrollees. Despite dire predictions that the new health care law—which begins cutting government subsidies to these plans in 2012—would destroy the program or increase premiums, neither has happened, at least not yet.

Almost all beneficiaries will have access to a Medicare Advantage plan in 2012, except in 31 counties in rural Colorado, Utah and Idaho, and in many places there are dozens of choices. Premiums will fall an average 4 percent, benefits remain “robust” and enrollment in the plans is projected to rise by 10 percent, Medicare officials say.

For example, in the highly competitive Medicare Advantage market in Miami, beneficiaries will have a choice of 47 plans that include prescription drug coverage (two more than this year), and 34 of these charge no premiums, compared with 25 this year. Across the state, premiums fell by 26 percent on average, according to Sen. Bill Nelson, D-Fla. “This should be welcome news for the seniors who were scared into thinking they were going to lose benefits or see higher premiums,” he said.

“poor” to five for “excellent”— according to a range of quality measures such as customer service.

In 2012 four plans will carry the gold star: the MedicareBlue Rx Standard and Premier plans in six states (Iowa, Minn., Mont., Neb., N.D. and S.D.) and the Rx1 and Rx2 plans in N. Y.

If enough beneficiaries take advantage of it, the system could act as an incentive for poorer-perform-ing plans. “Plans that do a better job serving the needs of their Medicare members should be rewarded, and all plans should be encouraged to improve their performance,” says Jonathan Blum, Medicare’s deputy administrator.

Going for the Gold

Until now, people enrolled in Part D drug plans and Medicare Advantage plans have been able to switch plans only during open enrollment, except in special circumstances.

In 2012 they’ll be able to switch once a year at any time of the year if they choose a plan that has earned Medicare’s top five-star quality rating. These plans are highlighted by a gold star on Medicare’s plan finder website at medicare.gov.

For several years, Medicare has rated all its drug and health plans with stars—ranging from one for

of $8 or less for this drug, whereas most have copays in the $30 to $45 range, and 12 plans do not cover it at all. ; Plavix: In California, copays for Plavix 75 mg, used to prevent heart attacks, range from $35 to $90.42 for a 30-day supply. Of the 33 plans offered, most charged copays between $40 and $50, and eight plans charged $70 or more.

; Zyprexa: In New York, copays for the antipsychotic drug Zyprexa 5 mg range from $34 to $163.98 for a 30- day supply. Of the 29 plans offered, 10 plans charge copays of under $90 for this drug, 19 plans charge $90 or more, and seven plans charge more than $115.

Such huge disparities in copays for the same drug are common because each plan decides its own copay structure and makes its own trade-offs. Some plans charge fixed dollar amounts for copays. Others charge a percentage of the drug’s cost— 25, 33 or even as high as 53 percent in a few cases. Paying a percentage rather than a flat copay for expensive drugs explains some of the highest prices shown in the examples above.

cost. You can also call the Medicare help line at 1-800- 633-4227 and ask a representative to do this search.

Of course, costs aren’t always the only consideration. On the plan finder you can find out what kind of service to expect from any plan by looking at the quality ratings Medicare gives it. If you travel a lot, you can see which plans offer nationwide pharmacies. Also, if you don’t take any drugs right now, the plan with the lowest premium will give you coverage at the least cost.

For the Bulletin’s guide to Medicare, go to

aarp.org/medicare

Finding your best deal

So how do you figure out what you’ll pay for your own unique set of medications?

The most effective way is to use Medicare’s online plan finder program at medicare.gov. If you enter your ZIP code, the names of the drugs you take plus their dosages and how often you take them, this program automatically does the math to find the plan in your area that covers your drugs at the least overall out-of-pocket

More ways to save in 2012: ; Savings in the Part D doughnut hole: The manufacturers’ discount on brand-name drugs in the coverage gap known as the doughnut hole continues to be 50 percent in 2012, but the government discount for generic drugs goes up from 7 to 14 percent. ; More generics will become available: Cheaper generic copies of some expensive, blockbuster drugs such as Lipitor, Plavix and Zyprexa will come on the market in 2012. The original brand-name drugs, however, typically retain their high prices when this happens. ; Low-cost drug coverage: About 2 million people who are eligible for subsidized coverage under Part D’s Extra Help program are not enrolled, according to Medicare estimates. “The eligibility requirements are more flexible than they were a couple of years ago,” says Medicare administrator Don Berwick. “If you were turned down in the past due to income or resource levels, you should reapply.” To apply, call Social Security at 1-800-772-1213 or go to ssa.gov. ;