8 Things to Look for In Your Medicare Annual Notice of Change
Each year, Medicare health and drug plans can change details about their plans. That means the plan you loved this year may not be the exact same next year.
In some cases, the changes are drastic, like when a drug plan is shelved, and you’re moved to a completely different plan. Other changes are minor, like your deductible going up $10.
In any case, we want you to fully understand how your health or drug plan may be changing for next year. Here are 8 things to look for in your Medicare Annual Notice of Change (ANOC).
Reminder! The Medical Annual Enrollment Periods is from October 15-December 7 – make an appointment if you'd like to go over your health and drug plans for 2023. Call our office at 217-423-8000 to get started!
Annual Notice of Change Examples
Your Annual Notice of Change (ANOC) will arrive sometime in September. This fairly lengthy document will inform you about any changes to your health or drug plan for the next year.
An ANOC letter will include two columns that compare your plan from this year to your plan for next year. You'll want to take a close look at all of the changes to make sure your plan still fits your needs and budget.
In this ANOC letter example, we can see the monthly premium and deductible are going up slightly, and the cost-sharing for covered drugs is now split up into standard and preferred.
In this example, we can see this particular plan has virtually no changes:
Even if you love your plan for next year, we always recommend shopping the market.
There may be a more competitive plan entering your county with a lower deductible and better supplemental benefits. If there's not, no harm done! But it can pay to shop around and be a savvy Medicare consumer.
1. Premium Changes
The first thing to look for in your ANOC is a change in premium. For the past few years, Medicare Advantage and Part D drug plan premiums have actually gone down.
As an example, the average Medicare Advantage premium in 2022 is $19 per month, whereas in 2021, it was $21.22 (CMS).
Here's an example of an ANOC letter where the plan actually saw a plan reduction for the next year:
We never know what trends will continue, but you may even see a premium reduction on your ANOC letter.
However, if there is an increase that's significant, you need to reach out to us so we can shop the market for you.
Insurance companies can "port" you over to a new plan if they terminate the one you're on. You can see an example of that in this ANOC letter:
If your premium is going to be significantly higher than it is this year, we definitely need to see what other options are available in your county.
2. Deductible Changes
The second thing you'll notice on your ANOC letter is the deductible. For the most part, deductibles will increase slightly as the allowed amount, announced by the Centers for Medicare & Medicaid Services (CMS), goes up.
As an example, in 2022, no Medicare drug plan can have a deductible higher than $480. That number will go up slightly for 2023, and many drug plans will follow suit by slightly raising their deductibles.
3. Copay Changes
On Part D drug plans, pay attention to your copays, or the amount you'll pay for drugs at the pharmacy. Drugs are divided into tiers with generics being on the lowest tier and brand name drugs being on the highest tier.
Make sure your copays for next year are going to work for you. If you're not sure, reach out to us and we can run a fresh drug comparison.
For Medicare Advantage plans, take a good look at all of the copays for highly-used and expensive services:
- Primary doctor visits
- Specialist visits
- Diagnostic tests
- Lab services
- Emergency care
- Urgent care
- Inpatient hospital coverage
- Outpatient hospital coverage
- Preventive services
- Ground ambulance
- Outpatient individual therapy visit
If any of these copays are increasing substantially for next year, it may be a good idea to shop the market in your county and see if more competitive options with richer benefits are available.
4. Coinsurance Increases
For Medicare Advantage plans, pay attention to the coinsurance amounts.
As an example, let's say you need durable medical equipment, like a wheelchair or oxygen.
What's your coinsurance for that equipment? If your current coinsurance is 10%, but it's going up to 35% next year, will you be able to shoulder that financial burden?
5. Network Changes
Medicare Advantage plans are network-based, so if you have any physicians or specialists that you rely on, please confirm they will continue to accept your plan for next year.
Oftentimes, an ANOC letter won't tell you what the specific network changes are. Instead, the letter will say something like, "There are changes to our network of providers for next year." Then, you'll be asked to visit the plan's website to look at their provider search tool.
6. Formulary Changes
Part D drug plans are allowed to adjust their formulary, or the list of drugs they'll cover. If they drop any of your medications, you may see steep price increases next year.
Our licensed insurance agents can run a fresh drug comparison for you to ensure your drugs are still covered. A bonus is we can also quickly see if any other plans could save you money for next year.
7. Changes to Prior Authorizations
Medicare Advantage plans are allowed to require enrollees to get approval from their plan before getting a service. If their plan doesn't grant approval, then it won't cover the cost of that service.
Ideally, prior authorization is supposed to stop patients from getting care they don't need. But sometimes, it can cause a roadblock and limits access to necessary care.
If your ANOC letter mentions anything about prior authorizations, talk to your licensed sales agent about whether or not this will work for you.
In reality, most Medicare Advantage plans require prior authorization for at least some items and services. If you don't want prior authorizations at all, you should consider Original Medicare with a supplemental policy.
8. Changes to Managed Care
Last but not least, Medicare Advantage plans are managed care plans, meaning they do have a say in what treatments you need to try first.
As an example, if one medication is cheaper than another, your plan may require you to try the less expensive one first before approving the more expensive one. This is called step therapy.
Like prior authorizations, if you don't like the managed care component of Medicare Advantage plans, you should consider Original Medicare with a supplemental policy. Our licensed insurance agents can walk you through the differences.
As we prepare for the fall Medicare annual enrollment period, make sure to take a good look at your Annual Notice of Change (ANOC) letter! If you have a Medicare Advantage or Part D drug plan, you will be getting one sometime in September.
Our agents can walk you through your letter and schedule an appointment during the enrollment period (October 15-December 7) to ensure you have the best plan for you.
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