Every year The Centers for Medicare and Medicaid Services (CMS) make changes to the Medicare program. CMS has posted the numbers for 2013 and there are no alarming changes, but it is important to know what out of pocket expenses to expect going forward.
Deductible and coinsurance amounts will increase January 1 and that will affect the cost sharing provisions of all Medicare supplement plans. Supplemental insurance plans are not “grandfathered-in.” Changes to Medicare by CMS affect all Medigap plans – both new and old.
|Medicare Feature||2012 Amount||2013 Amount||$$$ Increase|
|Part A Deductible (Inpatient Hospital)||$1,156||$1,184||$28|
|Part B Deductible (Physician’s Services & Supplies)||$140||$147||$7|
|Hospital Coinsurance Days 61-90||$289||$296||$7|
|Hospital Coinsurance Days 91-150 (lifetime reserve)||$578||$592||$14|
|Skilled Nursing Facility Coinsurance||$144.50||$148||$3.50|
At face value, there are no significant changes to the Medicare cost sharing amounts. As in past years, the limits to what certain Medicare supplement insurance and some Medicare Advantage plans must cover have only increased incrementally. However, these new numbers are something to keep in mind when you experience rates increase on your privately insured Medigap coverage.
The good news for those who purchased or are considering purchase of either Plan G or Plan N is the nominal increase in the Part B deductible. The increase was only $7 – moving to $147 for 2013 – up from the current amount of $140 for 2012.
This means that CMS is working to keep the Part B annual deductible low going forward – at least in the short run. Consumers worried about high out of pocket costs with Medicare supplement plans that do not cover the Part B deductible (like Plans G & N) can rest easy. The cost share is low and will continue to remain that way.
Thus, paying more for traditional Plan F is not necessarily the best option for some seniors. If Plan G is more than $12.25 less per month than Plan F, then Plan G can make good financial sense. There may little reason to pay more for Plan F considering that it only covers an extra $147 for 2013. As always, it’s important to keep in mind that the Part B deductible will likely increase going forward.
The new deductible for HD Plan F is $2,110 which is a $40 increase from 2012. For comparison sake, the amount was an even $2,000 in year 2010. This is a modest increase by most measures, so High Deductible Plan F will continue to be a popular option for many seniors.
The HD version of Plan F is a good choice for those who want to keep their monthly premiums low while eliminating the worry of a network driven plan. The trade-off is the potential for higher out of pocket expenses however. Those who are in good health and are comfortable with a $2,000+ deductible oftentimes purchase HD Plan F. Premiums in many parts of the country can be near $30 a month for those in their mid to late 60’s.
By many estimates, supplemental Plans K and L were designed to mimic Medicare Advantage coverage. These two coverage options have more out of pocket and cost sharing amounts than most other Medigap plans. In return, the monthly premiums are lower and can be well under $100 for seniors in their 60’s and 70’s.
The 2013 out-of-pocket maximum for Plans K and L are $4,800 and $2,400 respectively. This is a $140 increase for Plan K and a $70 increase for Plan L. Again, these appear to be reasonable numbers when compared year over year and compare favorably with most Medicare Advantage plans.
For those who are new to Medicare or who have been enrolled for several years, it is important to note that there are no dramatic changes to the 2013 cost sharing amounts. Medigap Plan, F, G, N, K, L and High Deductible F are and will remain good choices for coverage.
First year premiums and renewal rates will vary depending on several factors. It is always a good idea to speak with an independent agent before purchasing; or while shopping around for new supplemental coverage. This way, you can learn more about the nuances and history of competing insurance carriers that you might be considering.
Hyers and Associates, Inc. is an independent insurance brokerage specializing in the senior market. Contact us today to discuss Medicare supplements, Advantage plans, and Part D prescription policies.