Medicare changes you need to know about

Each year brings new rules in Medicare coverage. Here’s vital information as we head into 2013.

The donut hole

This year brings more efforts to close the gap in coverage for prescription drugs commonly known as the donut hole. Medicare prescription drug coverage (Part D) is provided by private insurers for an extra premium or as part of Medicare Advantage Plans. After you spend a certain amount of money for medicines included in the plan, you’ll pay all subsequent drug costs out of pocket up to a yearly limit.

As a result of the Patient Protection and Affordable Care Act and other legislation, the donut hole will gradually close by 2020. For 2013, you’ll hit the gap when you (and your insurance plan) have spent $2,970. That’s about $40 more than last year. You then must spend a total of $4,750 out of pocket to exit the gap. Deductibles and co-pays count toward total expenses, so keep a close eye on these amounts.

The star ratings

The Centers for Medicaid and Medicare Services provides a star ranking system for Medicare Advantage plans that you can easily access at Medicare.gov. This year Medicare is putting more emphasis on those rankings. For instance, you can no longer sign up for a plan on Medicare’s PlanFinder that carries a rating below three stars. (Then again, you wouldn’t likely want to sign up for such a poor performer unless there were absolutely no other options.) You’ll also get a letter from Medicare informing you that you are in an underperforming plan.

Skilled health care help

A federal court case recently decided in Vermont expands Medicare’s skilled care services. Previously, Medicare would not approve skilled care services for people who had no prospects for improvement in their health. Consequently, people with Alzheimer’s, Parkinson’s and other diseases were not covered for treatments such as physical therapy, respiratory therapy, speech therapy, etc. Under the ruling, patients suffering from such ailments who need help will get coverage. The case is still undergoing final approval in the courts, but a decision is expected early in 2013.

It’s important to stay on top of the ever-changing Medicare rules, and to prepare for all of your future health care costs. Talk to your Ameriprise financial advisor about how you can more effectively work toward these and other financial goals.