Open Enrollment: What to Watch this Year

BY Lea Winerman  November 15, 2010 at 6:00 PM EST

For the tens of millions of Americans covered by Medicare, it’s time to to begin poring over handbooks and pamphlets and considering health insurance options. Medicare open enrollment begins Monday and lasts until December 31, giving seniors their yearly chance to choose between regular Medicare coverage and a privately-run Medicare Advantage plan.

Meanwhile, it’s also open enrollment season for many workers covered by employee health insurance plans.

This year there’s an extra reason for people to take a look at their coverage options. Although the bulk of the changes in the new health care reform law don’t begin for another couple of years, there are a few early provisions that may affect plans. Below, find a list of some changes to watch for this fall:

For Medicare

  • Medicare enrollees will need to choose carefully this fall. They’ll have until Dec. 31 to choose a Medicare Advantage plan or traditional fee-for-service Medicare. Then, between January 1 and February 14, 2011, participants who decide that the Medicare Advantage plan that they chose does not work well for them will be able to switch back to regular Medicare. However, under new regulations (and unlike in years past), they won’t be able to switch to a different Medicare Advantage plan during that time.

  • Seniors who want to sign up for a Medicare Advantage plan will have an average of 24 plans to choose from, according to an analysis by the Kaiser Family Foundation [[PDF](http://www.kff.org/medicare/upload/8117.pdf)], despite the fact that there will be 13 percent fewer Medicare Advantage plans overall than last year. The change is not due to the health reform law, the Kaiser analysis finds. Most of the changes that will affect Medicare Advantage — and, controversially, will reduce payments to the program — don’t go into effect until 2012 at the earliest. Instead, most of the changes this year are due to new regulations enacted in 2009 that, among other things, encourage consolidating low-enrollment and duplicate plans.

  • Medicare Advantage premiums will actually decrease slightly on average compared to 2010, according to the Center for Medicare and Medicaid Services. Federal officials say they kept prices down by negotiating with insurers, the New York Times reported.

  • For those with traditional Medicare, the health reform law will bring some benefits next year, including:

    -No copayments or deductibles for routine preventive care, such as mammograms and prostate cancer screenings.

    -One free “wellness visit” per year.

    -People who fall into the prescription drug coverage gap — the “donut hole” — will get a 50 percent discount on brand-name drugs.

  • High-income patients with regular Medicare will be paying more next year for their Part D drug benefits. Individuals who make more than $85,000 and couples who make more than $170,000 will pay up to $69 per month more for their Part D coverage than those who earn less.

For Employees

  • Once again, employees’ costs are likely to go up this year. A September survey by the benefits consulting company Mercer found that employers expect premiums to rise 9 to 12 percent, and that many of these firms will contain costs by raising the percentage of the premium paid by employees. Some insurers have laid the blame for the increases on the new requirements in the health care law, but researchers have estimated that these new requirements will add only about 2 percent, on average, to premium costs — and that most of the rise will be due to rising health-care costs, as before. The Washington Post examined the cost issue in greater detail.

  • Speaking of new requirements, employees will find next year that under the new law, health insurance plans:

    -Must cover preventive care such as mammograms and immunizations with no copays or deductibles.

    -Must allow young adult children to stay on their parents’ insurance until age 26.

    -Cannot impose lifetime coverage limits, or annual limits less than $750,000.

  • However, employees must check with their particular insurer — or their company’s human resources department — to find out whether all of these new rules will apply to their coverage. Plans that were around before the law went into effect and that have not changed significantly since then may be “grandfathered” in and may not have to comply with all the new rules.

  • People who set aside money in a flexible spending account to pay for medical expenses may want to set aside a little less next year. Beginning in January, you can no longer use FSA money to purchase over-the-counter drugs or other health items without a prescription.