Just when you thought you understood your Medicare coverage, along comes yet another new or altered rule! Like the weather, Medicare seems to be forever changing -- what it does or does not cover, what it costs, and how to use it.
To help you cope, I asked Medicare and several experts at Medicare non-profits about the Medicare changes they think are most important for people to be aware of in 2018. Here’s the resulting list. It includes short descriptions and links to additional information if you’d like to learn more about each change and how it could affect you.
New Medicare Cards
After many years of complaints that Medicare cards disclose a person’s Social Security number, a new Medicare ID numbering system will begin taking effect this year, triggering new Medicare cards for all beneficiaries (here is an image). The current Medicare ID number – which is based on a person’s Social Security number – will be replaced by a randomly assigned number that Medicare says will provide greater security to people and help prevent identity theft and other fraud. Medicare will begin mailing these new cards in April and will continue the mailings on a rolling basis until April 2019, when everyone on Medicare should have received their new card.
2018 Changes in Premiums and Out-of-Pocket Costs
Social Security’s 2018 cost of living adjustment (COLA) has added 2 percent to total Social Security benefits. But because of the intricacies of the COLA’s impact on Medicare premiums, much of that increase will be spent on higher Part B premiums. As a result, millions of people won’t see much of a bump in their monthly Social Security payments.
Key cost changes for 2018:
- Standard Part B monthly premium: $134 (unchanged)
- Part B annual deductible: $183 (unchanged)
- Part A annual deductible: $1,340 (up $24)
- Daily coinsurance charges for hospitalizations longer than 60 days: $335 (up $6)
- Daily coinsurance charges for skilled nursing facility stays longer than 20 days: $167.50 (up $3)
- Maximum Part D annual deductible: $405 (up $5; some plans charge less)
Continued Shrinking of the Donut Hole
As a result of the Affordable Care Act, the donut hole has been gradually shrinking for several years, reducing beneficiaries’ share of drug costs. That shrinking continues in 2018, meaning you’ll pay less for your prescriptions if you fall into the donut hole this year.
In 2018, once you and your plan have spent $3,750 on covered drugs, you will enter the donut hole, also sometimes called the coverage gap. While in the gap, you will pay 35 percent of the cost of brand drugs (down from 40 percent in 2017) and 44 percent of the cost of generics (down from 51 percent last year).
Once your out-of-pocket costs hit $5,000, you will enter what’s called the catastrophic phase of Part D coverage. You’ll stay in that phase for the rest of the year and will pay only a few dollars for your prescriptions or, for costly drugs, no more than 5 percent of their price. Here is a look at the rules for how your drug spending within the donut hole is credited toward that $5,000 out-of-pocket total.
Starting in 2019, your share of the price for all drugs in the donut hole will not be more than 25 percent.
2018 High-Income Medicare Surcharges
Making enough money to trigger Medicare’s high-income surcharges is, I suppose, a nice kind of problem to have. But it doesn’t feel that way to people who must pay these surcharges, many of whom are surprised when they learn exactly how much their Part B and D premiums will increase. In 2018, the bite is even worse due to new rules that expand the income brackets triggering the biggest surcharge payments.
The standard Part B premium for most people this year is $134 but can be as high as $428.60 a month for people who filed a joint tax return for 2016 and reported more than $320,000 in what’s known as modified adjusted gross income (MAGI is defined midway down this IRS web page). Last year, a couple had to report more than $428,000 to trigger the highest payment. There normally is a two-year lag between the tax year and the year in which high-income surcharges are determined and applied, so the 2018 surcharges are based on tax returns for 2016.
Part D surcharges will add up to $74.80 to an enrollee’s monthly premium.
New Part D Prescribing Regulations
In the middle of last year, Medicare began requiring anyone writing a prescription for someone enrolled in Medicare to be licensed by Medicare, or obtain a formal exemption, in order for that prescription to be eligible for coverage by a patient’s Part D drug plan. While nearly all doctors are licensed by Medicare, the same has not been true for other prescribers, particularly dentists. Antibiotics, for example, are often prescribed when a patient is undergoing a routine tooth extraction or any procedure where infection is a concern.
To avoid an unpleasant rejection of a Part D claim for coverage of your prescription drugs, make sure your prescribers are either licensed by Medicare or can show you proof that they have been exempted from this rule.
Medicare Diabetes Prevention Program
More than 25 percent of Medicare beneficiaries who are 65 or older now have Type 2 diabetes, Medicare says, and that percentage is projected to double by 2050 based on current trends. In 2016, Medicare estimates it spent $42 billion more on beneficiaries with Type 2 diabetes than it would have spent had they not had the condition.
In April, Medicare will begin offering group education sessions as part of an expanded program to help people with prediabetes symptoms avoid the onset of Type 2 diabetes. Participating beneficiaries can take advantage of tools to measure their progress as well as perks to help them stick with the program, such as transportation to the sessions and child care, which could be especially helpful for those caring for grandchildren.
Waiver of Late-Enrollment Penalties for Marketplace Enrollees
People enrolled in health plans through the state insurance exchanges are supposed to drop their exchange plan and enroll in Medicare when they turn 65, but many don’t know this, and consequently, are late in enrolling. Typically this would trigger a late-enrollment penalty that increases the Part B monthly premium, but Medicare has been offering affected individuals a waiver from that penalty and has extended that waiver to Sept. 30, 2018.
Journalist Phil Moeller is an expert on retirement and aging. He writes the “Ask Phil” column for the PBS NewsHour and is the author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs” as well as the co-author of the updated edition of The New York Times bestseller “How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” You can follow him on Twitter (@PhilMoeller) or reach him via e-mail: AskPhilByUHC@gmail.com.
Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies. For Medicare Advantage and Prescription Drug Plans: A Medicare Advantage organization with a Medicare contract and a Medicare-approved Part D sponsor. Enrollment in these plans depends on the plan’s contract renewal with Medicare.