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  Medicare News from OneExchange
  Fall 2015 issue

We've created this newsletter to keep our participants updated on what's happening with Medicare medical and prescription drug coverage this year and next. We hope you find the information useful.

In this issue:
Information You Can Use
Medicare 2016 Open Enrollment Period
Prescription Drug Plan Check-up
Medicare Part D Prescription Drug Update
Medicare Turns 50!

Information You Can Use

This issue focuses on the upcoming Medicare Open Enrollment Period, a yearly event that allows people with Medicare Part D Prescription Drug plans or Medicare Advantage plans to reconsider their current coverage and enroll in new plans if they choose.

If you’re unsure whether you should change plans or continue with your current coverage, read on for information to help you make this important decision. You can evaluate your 2016 coverage options to see if there are better value plans by going to the OneExchange website starting on October 7, 2015. Please note that you do not have to do anything if you’re happy with your current coverage. Your coverage continues automatically unless you decide to change.

Lastly, this issue includes important news relating to prescription drug coverage, including an update about the Medicare Part D “donut hole” in 2016. You’ll also learn how you can conduct an online check-up on your Part D Prescription Drug Plan to see if you can lower your drug costs.

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The Medicare Open Enrollment Period: What You Need To Know

Every year, during Medicare’s Open Enrollment Period (OEP), you have the opportunity to make changes to your Medicare Advantage and Medicare prescription drug coverage for the following year.

You may wonder whether you should continue with your current coverage or make changes to it. No doubt, it’s an important decision that can be difficult to make. To help, we’ve identified reasons why you may want to change plans and also reasons why you may want to keep your current coverage.

Reasons for changing plans

Obviously, there are a number of factors that lead people to change plans. The following are just a few reasons you may want to consider. If you need to change plans, don’t worry, our OneExchange benefit advisors and online marketplace make it easy for you to find coverage that meets your needs and budget.

  • Medication-related changes that increase your costs: Every prescription drug plan is based on a list of drugs, called a formulary. In most plans, drugs are divided into tiers or levels with different copays depending on the tier. You may have chosen your current plan because your medication was in a tier with affordable copay. However, you may need to change plans if your plan provider moves your medication into a new tier, which can occur at the start or in the middle of a plan year, depending on the situation. If you notice that your out-of-pocket costs are significantly higher under your medication’s new tier classification, then it may be in your best interest to look for a new plan that reduces your costs. Or, if you started taking an expensive medication during the last year, you may want to review plans to see if you can find one that covers more of your costs.
  • Change of address: If you’ve moved during the year to a new ZIP code and haven’t changed your plan, it’s wise to investigate plans that are local to your new area. Plan prices vary by location across the United States so it’s a good idea to check to see if you can save money.
  • Premium increases: Premiums go up each year, and sometimes more than once a year, due to the ever-growing cost of medical services. Knowing how your premium compares to similar plans is key. If your premium is higher than similar plans, then you may want to change to a plan that offers a better value and fit for your needs. If your premium is still competitive with the premiums of comparable plans, then it may not make sense to change.

Around the end of September, your prescription drug plan provider or your Medicare Advantage plan provider will send you an Annual Notice of Change letter. Pay special attention to this letter. It will inform you of any changes to your plan’s premium, copays or other fees, and to the plan’s formulary. You’ll need this information to help you decide if you want to look for another plan during the Open Enrollment Period.

Reasons for keeping your coverage

It’s always good to review your plan options to determine if you need to make any changes to your current coverage. However, often the best decision is to stay with your current plan or plans.

This is especially true if you have Medicare Supplemental (Medigap) insurance. Unlike Medicare Advantage, Medigap is only “guaranteed issue” under certain circumstances — such as when you first become eligible for Medicare, if you’ve moved to a new area, or if your insurance company terminated your plan. In most other cases, if you want to change to another Medigap plan, you’ll have to go through underwriting, and you could be denied coverage. It’s not impossible to switch, but there are no guarantees you’ll be successful. Additionally, staying with your plan helps you avoid possible consequences, such as having to change doctors or pharmacies, which can be inconvenient or lead to lapses in care.

If your medication costs have increased, there may be ways to lower those costs that don’t require a plan change. For example, you can consider switching to a generic version of your drug if one is available. Coincidentally, one of the “triggers” for a brand-name drug being moved to a higher-cost tier is when a generic version becomes available. You can also reduce your prescriptions costs by buying medications via mail order or through your plan’s preferred pharmacies. It may surprise you to know that different pharmacies charge different amounts for the same medication—so it makes sense to buy from the one that offers you the lowest price.

And, remember, if you decide to keep your current coverage, you don’t need to do anything except continue to pay your premiums.

The bottom line

We recommend that you carefully consider your Medicare options by comparing your plan (including any new changes indicated in the Annual Notice of Change letter) with what’s available in the market. Be aware that plan premiums do go up almost every year—and an increase isn’t always a sign that you should change your insurance coverage. But if your prescription or health care needs change (or their cost to you), or if you move to a new place, it’s worth your time to review your options by visiting the OneExchange website during the Open Enrollment Period.

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Prescription Drug Plan Check-up: Can You Lower Your Costs?

It’s a good idea to conduct a check-up on your prescription drug coverage if your prescription drug costs have increased, your prescription needs have changed, or to simply see if you can get lower-cost coverage. Our online marketplace makes it easy for you to see if there are prescription drug plans that offer a better value and fit for your needs than your current coverage. By going to the OneExchange website, you can view comparable plans, compare plans against your current coverage, and enroll in a new plan. Simply follow these steps:

  • Log into your account on, then update your prescription information in the Prescription Profiler. Here you’ll see the medication information we have on file for you. Review this information to ensure it’s accurate and current with your prescription information. This is an important first step since our website finds plans based on your prescription needs. If you don’t have an account, you can easily create one and enter your prescription information.
  • Start your plan search through the Prescription Profiler by entering the requested information and following the steps to view a list of available plans. Select the tab that displays the results for prescription drug plans. Plans will be sorted by cost, with the most affordable at the top. Your current plan, and its updated costs, should be included in the list of plans.
  • Compare plans by selecting Add to Compare on all the plans that interest you. This will provide a side-by-side comparison of plans—making it easy for you to evaluate your options.
  • Enroll in a new plan if it offers a better value and fit for your needs. Select Add to Cart and complete the checkout process. Many plans allow you to enroll online—although some plans require you to call OneExchange to complete the enrollment. The website will guide you to complete your purchase. After you enroll in a new plan, your old plan will be canceled by your provider (by the effective date of your new plan).

If you have any questions, simply contact us. We are here to help!

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Medicare Part D news: what you need to know

Coverage gap or ‘donut hole’

One of the biggest changes to Medicare under the Affordable Care Act (ACA) is that the coverage gap or “donut hole” in prescription drug coverage will be closed by 2020.

The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. After reaching that amount, you have to pay all out-of-pocket costs for your prescriptions up to a yearly limit.

In 2016, you’ll reach the coverage gap once you and your plan have spent a total of $3,310 on covered drugs, and it will end after you spend $4,850 (the yearly limit).

Seniors who fall into the coverage gap in 2016 will get a 55% discount on brand-name drugs and a 42% discount on generic drugs until they reach their out-of-pocket yearly limit. As the donut hole continues to close, the savings will increase.

2016 formulary changes to Medicare Part D Drug plans

Prescription drug plan providers make changes to their drug formularies annually. These changes may include the addition of drugs, deletion of drugs or changes in costs. You can see if there are changes to your prescription drug coverage for 2016 by going to the OneExchange website and using the Prescription Profiler after October 7, 2015 (when we receive the formulary data from prescription drug plan providers).

By using the Prescription Profiler, you’ll be able to get prescription coverage information including a breakdown of your drug costs for the year across different plans. With this information, you’ll be able to see if there are plans with lower costs for your prescriptions than your current plan.

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Medicare Turns 50!

Fifty years ago, on July 30, 1965, President Lyndon Johnson signed the Medicare bill into law, establishing a federal health insurance program for older Americans. Since then, Medicare has been critical to protecting the health and financial security of people over 65. According to a recent study1, roughly 75% of Americans consider Medicare “very important”.

Before Medicare, almost half of people over 65 were uninsured. Today, only 2% of people aged 65 and older are uninsured.

Over the years, Medicare’s coverage has expanded to include hospice care, outpatient prescription drugs, and new treatments such as heart transplants and knee replacements. Under the Affordable Care Act (ACA), Medicare recipients now receive free preventative screenings and increased help with their prescription drug costs.

Remarkably, Medicare has significantly improved the health care of older Americans. Reports indicate that recipients are spending less time in the hospital, with an estimated 3.5 million fewer hospitalizations in 2013 than in 1999, and are living longer, roughly 6 years longer on average than before Medicare.

On top of that, Medicare is experiencing its slowest growth in spending over the past 50 years due mainly to health care reform changes, including reforms that emphasize coordinated care (especially for people with multiple chronic conditions), incentives that reduce the rate of hospital readmissions, and policies that create a slowdown in payments to hospitals and private Medicare plans.

Furthermore, the increase in spending per enrollee continues to be lower than overall health spending outside of Medicare.

With the slowdown in spending, Medicare’s solvency has greatly improved. In 2010, Medicare was projected to become insolvent by 2017. Today, Medicare is expected to remain solvent, paying full benefits, until 2030.

Medicare spending is projected to rise again with the near doubling of program recipients by 2030 (as baby boomers enter the system). The projected increase is from 3.5% of gross domestic product (GDP) in 2009 to 5.6% of GDP in 2040. Thereafter, Medicare’s spending is projected to grow more slowly, to 6.0% of GDP in 2089, which is significantly lower (nearly half) than what was projected before the enactment of health care reform.

Overall, good news for Medicare on its 50th anniversary.

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1. Kaiser Family Foundation Medicare and Medicaid at 50 Survey (conducted April 23-May 31, 2015)


Medicare Open Enrollment

October 15 through December 7, 2015


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Towers Watson
2929 Campus Drive
Suite 400
San Mateo, California 94403