Annual Enrollment Period (AEP)

Salvador Dali is credited with once saying, “What is important is to spread confusion, not eliminate it.”  If you’ve been on Medicare for more than 10 minutes, you probably think that the Centers for Medicare/Medicaid Services (CMS) came up with this line.  And it’s easy to see why.  The bureaucracy and complexity of Medicare can be overwhelming.  And certain times of the year seem to highlight this feature – like the Annual Enrollment Period (AEP).

The AEP is a timeframe each fall in which you can make changes to your Medicare coverage.  We have found that there is a lot of confusion around what you can and cannot do during this period.  Hopefully the information below will help clear some things up.

What the AEP is:

• AEP begins on October 15th and ends on December 7th.
• During AEP you may enroll into or disenroll from a Prescription Drug Plan.
• During AEP you may enroll into or disenroll from a Medicare Advantage Plan.
• If you already have a Prescription Drug Plan or Medicare Advantage Plan, you may change your plan during AEP if you wish.
• Any changes you make during the AEP will be effective January 1st of the upcoming year.

What the AEP is NOT:

• AEP does not affect a Medicare Supplement (Plan F, G, etc).  If you have a Medicare Supplement, you can change your coverage anytime during the year, and you are not required to do anything during the AEP.
• AEP does not require you to make any changes to your coverage.  If you are happy with your plan, it will continue into the next year with no action required on your part.
• AEP is not the end of the world.  :-)  

Although the AEP may seem very confusing and daunting, we assure you that we can help guide you through it all.  If you have questions about your coverage or your options during this AEP, please feel free to call or email us anytime.

ANOC

ANOC  (ә / näk)
   noun

1. An acronym that stands for:  Annual Notice Of Change. 
2. The document that is sent out each year by Prescription Drug and Medicare Advantage Plans that updates members as to changes in their coverage.
3. A very important document that should be reviewed carefully.

Well, it’s getting to be that time of year again.  Although it seems like it was just summer yesterday, we are already less than two weeks from October.  Of course you know that we are getting close to fall because you’ve started getting more and more email.  The Medicare Annual Enrollment Period is just around the corner, which means open season for Medicare marketers.  This means that you may find your paper recycle bin bulging at the seams as you try to keep ahead of all the solicitations and various junk mail.  There is however, one very important piece of mail for which you will want to be on the lookout.  That’s right, it’s your Annual Notice Of Change (ANOC).

If you have a Prescription Drug Plan or are enrolled in a Medicare Advantage Plan, you will get one of these every fall.  If you do not have a Prescription Drug Plan and you are not enrolled in a Medicare Advantage Plan, well then my friend, you can stop reading right here and take the rest of the day off!  But for those of you who do, keep reading. 

This document is very important because it will detail the changes in your plan for the upcoming year.  This will help you make the decision about whether or not you will keep your current plan, or shop for another.  The document itself is generally divided into two sections.  The first section is a brief summary of the highlights of the plan changes, and the second is a more detailed account of the previous year’s benefits next to the upcoming year’s benefits.  Typically this is done in a two column chart that makes comparison very easy.  As you look through these changes, we would recommend asking the following questions as a guide for keying in on some of the major, and sometimes harder to see, issues.

For Prescription Drug Plans ask:

    Did the monthly premium change?
    Did the drug copayments change?
    Are there any significant changes to the list of participating pharmacies?
    Are there any changes to the list of covered drugs that effect you (such as a change in drug tier)? 
    Are there any additional restrictions on the drugs that you're taking (such as step therapy, or quantity restrictions)?

For Medicare Advantage plans, ask the following questions in addition to those above:

    Did the annual out of pocket maximum change?
    Are there changes to the doctor, hospital, or nursing facility copays?
    Are there any changes to the out-of-network copays?
    Are there any changes to the extra benefits?

Note that sometimes the answers to the questions about prescription drug coverage may be found in the drug formulary that came with the ANOC and not in the ANOC itself.

Annual Election Period

Today marks the first day of the Annual Election Period.  What, you may ask, is the Annual Election Period?  The Annual Election Period, or AEP, is a window of time during which you can change the way in which you receive your Medicare benefits and in which you can add or drop prescription drug coverage.  Here are some quick pieces of info. 

• Begins.  The AEP begins on October 15th of each year.
• Ends.  The AEP ends on December 7th of each year.
• Effective Date.  Any changes made during the AEP will be effective January 1st of the following year.
• Medicare Advantage.  During the AEP you can change from Original Medicare to a Medicare Advantage plan (or vice versa), or you may change from one Medicare Advantage plan to another.
• Prescription Drug.  During the AEP you can add, drop, or change prescription drug coverage.
• Applications.  If you apply for a prescription drug plan or Medicare Advantage plan and decide that you would like another plan, you may make another selection.  In fact, there is no limit to the number of applications you can submit during the AEP.  If you do submit more than one application, the last one submitted is the one that sticks. 
• Medicare Supplements.  The AEP does NOT effect Medicare Supplements at all!  A Medicare Supplement does NOT have to renewed each year, nor will it change from year to year.  If you have a Medicare Supplement, October 15th is just another day in October.
• Marketing.  The above explains why you may have noticed a sudden up-tick in the amount of marketing material you've been receiving lately :)  Not to worry.  If you have any questions about making a change to your Medicare Advantage or prescription drug coverage, please feel free to call (800-817-9223) or drop us an email (info@tweedyinsurancegroup.com) anytime.

2013 Baseline Prescription Drug Plan

CMS has recently released the 2013 advised structure for all prescription drug plans.  While each company may design their plan in any way they choose, they must be at least "actuarially equivalent" to this standard design.  That is, they cannot offer coverage that, all things considered, is less than the standard coverage. 

The changes of note from last year are...

• Deductible change from $320 to $325
• Donut Hole threshold change from $2,930 to $2,970
• Generic discount during the Donut Hole increased from 14% to 21%
• Catastrophic Coverage threshold change from $4,700 to $4,750

To see a full breakdown of the 2013 standard plan, click here.

Annual Notice of Change (ANOC)

Hey look - more acronyms!  The federal government loves acronyms, and even when they work together with private industry (as is the case with PDPs and MA Plans) they still abound like they're going out of style.  So what is the Annual Notice of Change (ANOC)?  Do I get one?  Does it even matter?

The Annual Notice of Change is a document that Prescription Drug Plans (PDPs) and Medicare Advantage Plans (MA Plans) send out each fall to inform you of the changes in your plan.  If you don't have a PDP or an MA Plan, then no, you will not get one.  But for everyone else, expect to see this arriving on your doorstep sometime around the first of October.  Now we come to the $64,000 question - does it matter?

Yes.  I know, I know.  You wanted me to say no.  But the truth is, this is a very important document.  Why?  Each year a PDP or MA Plan files a new contract with the federal government.  This contract is totally different from the prior year's and can change items such as copayments, deductibles, monthly premiums, and even covered drug lists.  Because these changes can be so drastic, the plan is required to send you an ANOC to inform you of the differences between the current year and the upcoming year. 

So now you're probably all excited to read through your ANOC, right?  Well that will probably only last until it arrives.  Depending on your plan, your ANOC will weigh between 5 and 6 tons and come with it's own pillow.  Okay not really, but you get the drift.  While the whole publication does have merit, we have some tips to help you use this document efficiently.  So below are some questions that we would suggest you answer before just deciding to toss (or drag) it out.

For PDP plans:

• Did the monthly premium change?
• Did the drug copayments change?
• Are there any significant changes to the list of participating pharmacies?
• Are there any changes to the list of covered drugs that effect you?
• Are there any additional restrictions on the drugs that you're taking?

For MA plans, ask the following questions in addition to the above:

• Did the annual out of pocket maximum change?
• Are there changes to the doctor, hospital, or nursing facility copays?
• Are there any changes to the out-of-network copays?
• Are there any changes to the extra benefits?

Common Insurance Terms

Ha, you think!  The only thing common about insurance terminology is that they're all confusing.  We understand.  After all, insurance terminology is the second cousin to legalese!  Trying to read through a Summary of Benefits, or other health insurance material can be an exercise in frustration if you don't know the lingo.  That's why we've put together the following guide: Insurance Terminology in Plain English. 

Because we love simplicity, this isn't an all-inclusive guide of every insurance word ever used.  But, it will hit many of the most commonly used terms.  If you'd like to dig a little deeper, check out the two links below.

• A Glossary of Medicare Terms (c) Medicare Interactive
• Medicare.gov/Glossary

What is "Extra Help"?

If you have a Prescription Drug Plan (PDP) or have heard anything about them, perhaps you've heard the phrase "Extra Help".  You might be wondering, what is it, who is it for, and how do I get it?  Good questions! 

Extra Help is a program administered by the Social Security Administration (SSA) that provides assistance to Medicare beneficiaries to help with the cost of their prescription drugs.  If awarded, Extra Help can provide assistance in the following ways.

• Premium.  Extra Help can lower or completely eliminate your premium based on your income level and/or the PDP you're enrolled in.
• Deductible.  If your PDP has a deductible, Extra Help can lower or completely eliminate your annual deductible depending on your income level.
• Drug Copays.  Extra Help can lower your drug copays.  The base benefit lowers your copays to a flat 15%, while the most generous benefit reduces your copays to two fixed amounts - $2.60 for generics and $6.50 for brand name drugs.  The level of benefit depends on your income level.

Extra Help is available to any Medicare beneficiary that meets certain criteria.  The two prime criteria are income level and resources.  To receive benefits, a single person needs to have an annual income of less than $16,755.  For married persons the limit is $22,695.  The resource limit to receive benefits is $13,070 for a single person, or $26,120 for a married couple.  Not all assets, however, count as resources.  For example, the value of your primary residence, your car, or any life insurance you may carry does not count towards the resource total.  Click here for more information on what is classified as a resource.

There are three ways to apply for Extra Help.

• Online.  Click here to be directed to the SSA website to begin an application.
• By Phone.  You can call 800-772-1213 (or 800-325-0778 for TTY users) and submit an application over the phone.
• Social Security Office.  You can also stop by a local Social Security office and apply in person.  To find the office nearest you click here.

For more detailed information on the Extra Help program, you can visit the Extra Help page on SSA's website:  http://ssa.gov/prescriptionhelp/index.htm.  

Generic vs. Brand

We've probably all heard of generic drugs, but what exactly are they?  Are they safe?  Can they actually same me money?  These and other common questions hang like a cloud over the brand vs. generic debate.  Here are a few facts to help clear things up a bit.

• Brand name drugs are protected by patent for up to 20 years.  During this time the drug manufacturer holds exclusive rights to produce and sell the drug. 
• Generic drugs can be released when a patent expires (or is proved invalid).  These drugs must have the same active ingredients (the chemical that treat the condition) and meet the same FDA requirements for quality, purity, and safety as the original brand name drug.
• After the drug patent expires, however, the drug manufacturer may still hold exclusive rights to the delivery method.  For instance, a drug and it's generic counterpart may have the identical active ingredient, but the brand name drug may provide a slower release of the medication thus extending it's effectiveness over time.
• Generic drugs can differ, however, in color, shape, taste, inactive ingredients (fillers) from their brand name counterparts.
• Because of the two reasons immediately above, some generics are not as effective as brand name drugs for some people.
• Generic drugs are often much cheaper.  For example, the average cost of the type II diabetes drug Glucophage is $90, while the average cost of Metformin, the generic counterpart, is only $7. 

Conclusion

Although there may be some very slight differences between a brand name drug and it's generic counterpart (inactive ingredients and possible delivery methods), generics generally are effective for most people.  And as far as safety is concerned, even most critics of generic drugs concede that they are safe to use.  Given the difference in cost between the two, most experts agree that it is a good idea to at least consider trying a generic.

One last thought.  Many brand name drugs do not have generics.  However, for many brand name drugs there exist "similar generic alternatives."  These generics are not identical generics like we discussed above.  That is, they have different active ingredients, and may work slightly different.  However, they are similar in that they are used to treat the same symptoms or conditions.  For example, Crestor does not have a generic counterpart available in the United States.  However, both Simvastatin and Pravastatin function very similarly, and have been used with great success by many people looking to regulate their cholesterol.  If you are on a brand name medication that does not have a generic, and you would like to see if there are similar medications that you may be able to discuss with your doctor and pharmacist, click here to visit a website that will help you explore alternative medications.

Lock-In

The Medicare Lock-In.  A very ominous sounding phrase, but what is it?

In short, the Lock-In refers to the time of year when, generally speaking, a Medicare Beneficiary is unable to change from Original Medicare to a Medicare Advantage Pan (or vice-versa) or change their Prescription Drug coverage. 

As you may know, there are only two ways to receive your Medicare benefits; either through Original Medicare (Part A & Part B) or through a Medicare Advantage Pan (Part C).  However, Medicare no longer allows a beneficiary to change back and forth between the two at will.  Instead, Medicare requires that once you make your decision, you stick with it for one calendar year.  During the Annual Enrollment Period (that runs from October 15th through December 7th) you are able to choose between the two.  Your decision will take effect on January 1st, and you will be "locked-in" to that decision until December 31st. 

Likewise, you may use the Annual Enrollment Period (AEP) to add, drop, or change your prescription drug coverage (Part D).  This change also takes effect on January 1st and continues throughout the entire year. 

But as with all things government, there are exceptions.  Countless exceptions.  These exceptions are called Special Election Periods (SEPs).  If you are unhappy with the plan that you are currently on and would like to see if you qualify for an SEP, please give us a call (800-817-9223) or shoot us an email and we can let you know what your options are.

Lipitor generic available!

On November 30th Pfizer's patent on Lipitor expired.  Since 1997 it has earned the pharmaceutical giant $81 billion, and the title of best-selling prescription drug of all time.  But now, Ranbaxy has released a generic version: Atorvastatin. While some generic medications can function somewhat differently than their brand-name counterparts, all projections for Atorvastin are predicting that it will be a good alternative.  Most prescription drug plans have now added Atorvastatin to their list of covered drugs.  Read more about the story here.