Costs in the Coverage Gap

Most Medicare Prescription Drug Plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.

Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. In 2015, once you and your plan have spent $2,960 on covered drugs (the combined amount plus your deductible), you’re in the coverage gap. In 2016, once you and your plan have spent $3,310 on covered drugs, you’re in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.

Once you reach the coverage gap in 2015, you’ll pay 45% of the plan’s cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your plans has set with the pharmacy for that specific drug.

Although you’ll only pay 45% of the price for the brand-name drug in 2015, 95% of the price—what you pay plus the 50% manufacturer discount payment—will count as out-of-pocket costs which will help you get out of the coverage gap. What the drug plan pays toward the drug cost (5% of the price) and what the drug plan pays toward the dispensing fee (55% of the fee) aren’t counted toward your out-of-pocket spending.

Example: Mrs. Anderson reaches the coverage gap in her Medicare drug plan. She goes to her pharmacy to fill a prescription for a covered brand-name drug. The price for the drug is $60, and there’s a $2 dispensing fee that gets added to the cost. Mrs. Anderson will pay 45% of the plan’s cost for the drug ($60 x .45 = $27) plus 45% of the cost of the dispensing fee ($2 x .45 = $0.90), or a total of $27.90, for her prescription. $57.90 will be counted as out-of-pocket spending and will help Mrs. Anderson get out of the coverage gap because both the amount that Mrs. Anderson pays ($27.90) plus the manufacturer discount payment ($30.00) count as out-of-pocket spending. The remaining $4.10, which is 5% of the drug cost and 55% of the dispensing fee paid by the drug plan, isn’t counted toward Mrs. Anderson’s out-of-pocket spending.

In 2015, Medicare will pay 35% of the price for generic drugs during the coverage gap. You’ll pay the remaining 65% of the price. What you pay for generic drugs during the coverage gap will decrease each year until it reaches 25% in 2020. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.

Example: Mr. Evans reaches the coverage gap in his Medicare drug plan. He goes to his pharmacy to fill a prescription for a covered generic drug. The price for the drug is $20, and there’s a $2 dispensing fee that gets added to the cost. Mr. Evans will pay 65% of the plan’s cost for the drug and dispensing fee ($22 x .65 = $14.30). The $14.30 amount he pays will be counted as out-of-pocket spending to help him get out of the coverage gap.
If you have a Medicare drug plan that already includes coverage in the gap, you may get a discount after your plan’s coverage has been applied to the price of the drug. The discount for brand-name drugs will apply to the remaining amount that you owe.
Items that count towards the coverage gap: Your yearly deductible, coinsurance, and copayments, the discount you get on brand-name drugs in the coverage gap and what you pay in the coverage gap
Items that don’t count towards the coverage gap: The drug plan premium, pharmacy dispensing fee and what you pay for drugs that aren’t covered.


National Medicare Education Week

medicareConfused about Medicare? You are not alone.

In fact, you’ve got lots of company. According to the Medicare Made Clear Index, a 2013 survey of 1,000 older adults, 1 in 5 Medicare beneficiaries described Medicare as confusing, and most could not correctly identify what Medicare Parts A, B, C and D cover.

That’s one of the main reasons UnitedHealthcare created National Medicare Education Week. We’re committed to making Medicare easier to understand for the more than 51 million people who are currently enrolled as well as those who will be enrolling in the years ahead. And there are a lot of them out there.

Every day, about 10,000 baby boomers turn 65 and become eligible for Medicare.1 That’s one every eight seconds. As the Medicare population grows, the number of people in need of clear, easy-to-understand information about the program grows as well. National Medicare Education Week is one way we’re helping to meet this need.


Use these tools to help guide and support your Medicare education experience.

Medicare Education Checklist


Learning about Medicare shouldn’t be limited to just one week of the year. Taking the time to review your coverage options and stay informed about Medicare may help you feel better prepared to enroll in Medicare for the first time or make confident health care decisions during Medicare Open Enrollment (Oct. 15-Dec. 7). Use this checklist to help you learn more about Medicare.


Start with the Basics: Mastering the basics of the Medicare program may help you feel prepared to find the coverage that’s right for you. Check out the Learn about Medicare page, watch the Medicare Overview video or get familiar with some terms in the Glossary.
Ask the Right Questions: Medicare isn’t one-size-fits-all. You have lots of options as you’re deciding which coverage is right for you. But those options can sometimes feel overwhelming. Make it easier by asking yourself some key questions that will help you determine your needs .
Prepare: Be ready to make decisions about your coverage options during Medicare Open Enrollment (Oct. 15-Dec. 7). Visit the Coverage Examples page to see how four Medicare beneficiaries chose their plans. Or watch the videos about Medicare Parts A, B, C and D as well as Medicare supplement insurance.
— This information is provided by Medicare Made Clear – Medicare Questions?  We are here to help. Call our offices at 909-792-3300

Have You Reviewed Your 2014 Medicare Coverage?

Medicare Coverage ReviewBusinesses often spend the first quarter of the year (January through March) planning for a successful year. How about spending some time reviewing your 2014 Medicare coverage? What you learn and the actions you take may have a big effect on both your health and your pocketbook in the coming year.

Here are a few things you can do.

1. Take note of changes in your plan.

You may have changed plans during Medicare Open Enrollment last fall. Even if you kept your 2013 elections in 2014, plans can change from year to year. So it’s a good idea to go through all of your 2014 plan materials to see what may be new for this year.

2. Get the most out of your coverage.

As you probably know, Medicare coverage isn’t free for most of us. Shouldn’t you be getting all you can out of the coverage you’re paying for?

One area in which you might be able to get more out of your coverage is preventive care. A good first step is to make an appointment with your doctor for a “Welcome to Medicare” visit (if you’re new to Part B in the past year) or Annual Wellness Visit (after the first year of having Part B). Together you can discuss screenings, preventive care, treatment options and medications that best meet your health care needs and fall within your Medicare plan coverage. By taking a proactive approach, you can help ensure that you’re getting the most from your coverage. Best of all, these visits are covered by Medicare with no cost to you; the Part B deductible doesn’t apply.

Medicare Part B covers a wide range of preventive screenings and services, from mammograms and prostate cancer screenings to nutrition therapy services. These often change in a new calendar year, so it pays to review what’s available. And remember that both the Annual Wellness Visit and preventive screenings are covered if you have a Medicare Advantage (Part C) plan, too.

3. Look for ways to save money.

If you have a Medicare Advantage or Part D prescription drug plan, take a look in your 2014 materials or on your plan website. You may find a cost-saving program that’s new this year, or one you simply overlooked in a previous plan year.

For example, it’s always worth checking to see whether you might save money on your prescription drug costs. Your insurance company may offer you a discount on your co-pays if you get your prescriptions filled at certain pharmacies. Or they may offer you lower costs if you order maintenance medications through a certain mail-order pharmacy. And it’s never a bad idea to look over your plan’s 2014 formulary (list of covered drugs) with your doctor, to see whether there’s a medication you take that could be replaced by a lower-cost option.

Knowledge is power.

Knowing all you can about your Medicare coverage can help empower you to meet your health care and cost goals for 2014. And one added bonus is that when it comes time to choose a 2015 plan (or plans) during Medicare Open Enrollment in the fall, you’ll be ready to review your choices.

–This information was provided by Medicare Made Clear

For more information visit or call our offices at (909) 792-3300

5 Reasons to Review Your Medicare Coverage Now

Medicare - 2 days leftSaturday, December 7, 2013, is the last day of Medicare Open Enrollment for 2014 coverage. If you don’t act now, it may be next year before you can make changes to your coverage, unless you qualify for a Special Enrollment Period. Next year’s Medicare Open Enrollment is October 15 – December 7, 2014.

The materials you received from your plan before Medicare Open Enrollment began are very important. The Annual Notice of Change or Evidence of Coverage explains any changes to your current coverage, premiums or other out-of-pocket costs for 2014.

Review this information carefully so you understand how any changes may affect you. Then you can decide if you may need to make a change.

Here are five things to consider when deciding if it’s time for you to change your Medicare coverage:

1. Have you received a new diagnosis or been given a new prescription? Changes in your health may mean you require more or different health care services. Make sure you understand what your current plan will cover and how much you will have to pay.

2. Is your doctor still in your plan’s network? Plans can change their network provider lists from year to year. If your doctor is no longer in your plan network, you may want to change doctors or choose a different plan.

3. Does your plan still cover the medications you take? Plan drug formularies are reviewed annually and may change.

4. Is your pharmacy still in the plan’s network? Just like provider networks, plans can change their pharmacy networks, too.

5. Has your financial situation changed? You’ll want to make sure you are still comfortable with your plan’s cost-sharing terms.

There is no one-size-fits-all type of Medicare coverage. Everyone has different health and budget needs, and these may change over time.

Medicare Open Enrollment – Redlands CA – Yucaipa CA

Changes To Medicare’s Open Enrollment


Medicare’s Open Enrollment has begun!  Below is some useful information about the some of the changes to Medicare’s Open Enrollment. Remember you are not alone, because we are here to help you with all of your Medicare questions.

Have great day!
George Litchfield

George Litchfield Insurance
California License #0B56846
Call us at (909)792-3300 or (888)891-5557

Changes in MedicareMedicare’s annual election period will begin October 15 and changes are expected thanks to the roll-out of the Health Insurance Marketplace. Due to the new Health Insurance Marketplace, those who are eligible for Medicare should know the differences between the two government programs.

Medicare beneficiaries have the option of making changes to their healthcare plans for 2014 during this annual enrollment period that runs from October 15 to December 7. That means anyone who has original Medicare, Medicare Advantage or Part D prescription drug plans can make any changes they desire to their coverage.

Some people may run into confusion when it comes to these two government-run health insurance exchanges. A Medicare beneficiary should know they are not required to enroll in a health insurance plan from the Health Insurance Marketplace if they already have coverage under Medicare. However, they should still evaluate their Medicare plan options for the upcoming year in order to make sure their coverage meets their medical needs.

Since the new healthcare law requires individuals to have coverage, anyone who will turn 65 during the annual enrollment period for Medicare should look for plans that will give them coverage through the end of 2013 as well as a plan that will begin on January 1, 2014.

One thing to know about Medicare is that it is not a part of the Health Insurance Marketplace. If you’re covered through Medicare then you won’t be charged penalties for being under-insured according to the Affordable Care Act (ACA). Remember that Medicare’s annual open enrollment runs from October 15 to December 7 while the Health Insurance Marketplace enrollment period is from October 1, 2013 to March 31, 2014.

Medicare changes to expect

A Medicare recipient who reaches the drug donut hole will benefit from lower costs. The gap in prescription drug coverage begins when someone reaches the initial coverage limit, which is estimated to be $2,850 in 2014. Once an individual spends $4,550, catastrophic coverage begins. When a beneficiary is in the donut hole, an individual may pay for costs out of their own pocket. However, in 2014, anyone who reaches the donut hole will be given a 52.5 percent discount on brand-name drugs and a 28 percent discount on generic drugs – up from a 21 percent discount in 2013.

Those with catastrophic coverage are responsible for a co-pay of $2.55 for generic prescription or preferred multi-source drugs that cost up to $51, a 10 cent decrease from 2013. The co-pay for drugs with a retail price of up to $127 is $6.35. In 2014, beneficiaries will be required to pay a 5 percent cost-sharing fee for any drugs with a retail price more than $127.

Changes are expected to Medicare Part B premiums, which are based on a beneficiary’s income. Information on premiums for a Part B plan for the upcoming year will be available by the time Medicare’s annual enrollment period begins.

Deductibles and premiums will change for Medicare beneficiaries with a prescription drug Part D plan. The initial deductible for Part D will decrease to $310 for 2014 and monthly premiums will be $31 for a basic drug plan. Keep in mind, however, that Part D premiums are subject to the same income-based thresholds as Part B plans.


Try to Avoid Medicare Late Enrollment Premium Penalties

discountsKnowing your Initial Enrollment Period deadline and the different Medicare parts before you’re eligible for Medicare may help you to enroll on time and avoid paying penalties on top of your monthly Medicare premium payments. It’s also important to know about different enrollment periods to help avoid a lapse in coverage.

When you become eligible for Medicare, you will need to sign up for Part A, Part B and Part D during your seven-month Initial Enrollment Period. For example, if you become eligible for Medicare when you turn 65, you can sign up 3 months before the month you turn 65, the month you turn 65, and 3 months after you turn 65.

If you didn’t sign up for Part A and/or Part B (for which you must pay premiums) when you were first eligible, you can sign up between January 1–March 31 each year. Your coverage will begin July 1. You may have to pay a higher Part A and/or Part B premium for late enrollment.

However, some people who meet certain requirements may not have to pay a penalty even if they did not sign up when first eligible.

Part A Enrollment Penalties

Most people are eligible for Medicare Part A, Part B and Part D at age 65. Coverage for Part A is usually available without having to pay a monthly premium as long as you or your spouse worked and paid taxes for ten years. If you aren’t eligible for premium-free Part A, then it’s especially important to sign up during your initial enrollment period to avoid a possible 10% penalty on top of your monthly premium. You would have to pay the higher premium for twice the number of years you were eligible for Part A, but didn’t sign up for it.

Part B Enrollment Penalties

Part B charges a monthly premium. The amount that you pay is based on your income and tax-filing status. You will need to sign up when you are first eligible to avoid an additional 10% of your Part B premium for every 12-month period you were eligible for Part B, but didn’t sign up for it. Usually, you will have to pay the monthly penalty for as long as you have Part B coverage. You can delay enrollment in Part B without penalty if you quality for a Special Enrollment Period (SEP). Find out how much you may have to pay if you miss your enrollment deadline with this Part B penalty calculator.

Part D Enrollment Penalties

One way to avoid having to pay Part D penalties is to sign up for a Part D drug plan as soon as you become eligible. Or, you can delay enrolling in Medicare Part D without penalty, but only if you have had other prescription drug coverage at least as good as Medicare. This is known as creditable coverage If it’s been more than 63 days since you’ve had creditable coverage, then the penalty may apply. For each month you delay, you may have to pay an additional 1% of the average premium per month. You will pay that penalty for as long as you’re enrolled in a Medicare Part D plan.

Learning about timely enrollment in Medicare could save you a lot of money later.

–This information was provided by Medicare Made Clear

Sincerely,  George
California License #0B56846
(909) 792-3300

Medicare Advantage defies expectations by growing

medicare advantageIf we used tennis scoring to track the progress of healthcare reform, this would be the moment to declare: advantage Advantage.

Obamacare opponents have been warning for several years now that Medicare Advantage, the private plan option that seniors can pick instead of traditional fee-for-service Medicare, would fail because of the healthcare law’s impact on the program. The prediction was that the gradual elimination of extra federal reimbursements to Medicare Advantage would kill it. But the opposite is happening.

Advantage plans, which combine Part A (hospitalization) Part B (outpatient services) and usually Part D (prescription drugs), are on a big-time roll. Enrollment has jumped an impressive 10 percent in each of the past three years, according to data compiled by the Kaiser Family Foundation (KFF), a non-profit healthcare research and policy organization. About 28 percent of all Medicare enrollees this year are in an Advantage plan

The growth of Advantage likely will shift into an even higher gear during the next few years following the launch of the state public insurance exchanges under the Affordable Care Act (ACA). Most are managed care plans – 65 percent are health maintenance organizations (HMOs) and 22 percent are preferred provider organizations (PPOs), according to KFF.

Savings on premium costs are a big driver of Advantage plan growth. Enrollees pay their regular Part B premium, which is$104.90 this year. The Advantage plans also can charge a supplemental premium, but many don’t. This year, 55 percent of enrollees are in plans with no extra premium, and two-thirds of HMO Advantage plan members pay nothing extra, KFF says.

That means Advantage participants do not pay standalone premiums for prescription drug coverage, averaging $30 per month this year. They also are not paying for Medigap supplemental plans, which are popular in traditional Medicare and cover deductibles and coinsurance for long hospital stays and outpatient services, and help lower out-of-pocket costs.

Advantage plans also are gaining because the baby boomers coming into the Medicare system are accustomed to managed care.

The savings on premiums are an important plus for healthy seniors, since their overall usage of care will be low and out-of-pocket costs will be minimal. Baker urges less-healthy seniors to proceed with caution.

If you’re a relatively healthy 65-year-old who goes to the doctor once a year, you will save some money on premiums,but costs can escalate if you get sick.

If you are inclined to take traditional Medicare, there is an advantage to picking it when you first enroll because the Medigap policy won’t be able to exclude you for any pre-existing condition or charge a higher premium due to any past health problems. Depending on your state, you might have trouble getting a Medigap policy, or have to pay more, if you try to get a policy past that point.

Sincerely,  George
California License #0B56846
(909) 792-3300

When to Enroll in Medicare Advantage or Prescription Drug Plans

perscription drug plansAfter you’ve completed your initial enrollment in Medicare Parts A and B, there are some key dates to keep in mind. Review these dates and explanations to get a clear picture of when to take action.

Initial Enrollment Period (IEP)
For most, your IEP begins three months before the month you turn 65, runs through your birth month and ends three months after your birth month.

If you wait to enroll in a plan, there’s a chance you will have fewer plan choices and you may have to pay more.

Annual Enrollment Period (AEP) – Oct15 – Dec 7
During this time, you may enroll in a Medicare Advantage plan for the first time OR you can change prescription drug plans, Medicare Advantage plans, or return to Original Medicare. Coverage for enrollment changes takes effect on January 1.

Medicare Advantage Dis-enrollment Period Jan1 – Feb 14
If you’re in a Medicare Advantage Plan, you can elect to return to your Original Medicare benefits from the federal government. If you switch to Original Medicare during this period, you will have until February 14 to also join a Medicare Prescription Drug Plan to add drug coverage.

Feb 15 – Oct 14
During this time you will not be able to switch coverage unless you qualify under certain circumstances for a Special Enrollment Period.

Generally, you must stay with your current coverage until January 1, when any new coverage you chose during the Annual Enrollment Period begins. – If you or someone in your family is 65 or older and is in need of a Medicare Supplemental Plan or already has a plan, but wants to make sure that it is the right plan please give us a call (909)792-3300 or (888)891-5557 or go to our website  and we will give you a quote and help you keep money in your pocket

Medicare is Not a Family Health Plan

Turning 65 CakeHello,

This article explains what families can do if there is a spouse who is turning 65 and has a spouse under 65 that might  also have dependents. If you find this to pertain to you or someone you know please give us a call.  We can help you or someone you know with Medicare supplement plan needs as well as health insurance for anyone under 65.

Have a blessed day!

George Litchfield
Medicare Plan Specialist

Call me today at 888-891-5557

The transition to Medicare might be smoother for many couples if every married person were the same age as their spouse. Why? Many couples get their health insurance through one spouse’s employer. If that spouse retires at age 65 and enrolls in Medicare, a younger spouse—and any dependents—may be left without coverage. This is also true for domestic partners covered under one partner’s health plan.

You can only get Medicare if you yourself are 65, unless you are eligible due to disability. You are not eligible for Medicare when your spouse or partner turns 65. (The use of “spouse” in the rest of this article also means “domestic partner.”)

Health Insurance for a Younger Spouse

It’s important to plan ahead when a younger spouse relies on health coverage through an older working spouse’s employer. There are a number of considerations, including:

  • How many years will it be before the younger spouse turns 65 and becomes eligible for Medicare?
  • Does the younger spouse work and have access to a health plan through their employer?
  • Does the retiring spouse have retiree health benefits from their former employer that will cover the younger spouse?
  • Does the younger spouse have a pre-existing condition that may be an obstacle to getting other coverage? (Note that starting in 2014, as part of the Affordable Care Act, insurers can no longer discriminate on the basis of a person’s pre-existing condition.)

Buying health insurance for a younger spouse until they are eligible for Medicare can become costly. If eligibility is several years away, the retiring spouse may want to continue working—at least for a few years. That way, the younger spouse can continue to receive benefits through the working spouse’s employer plan until he or she turns 65.

Alternative health insurance options for younger spouses do exist. You’ll need to do some homework to find the one that may work for you. Here’s a run-down of the types of coverage available.

COBRA Temporary Insurance

Spouses and dependent children may be eligible for COBRA insurance through the retiring spouse’s former employer. The COBRA law allows you to continue receiving benefits for up to 18 months. You must pay the full premium; the employer no longer pays its share. You may only have a short time to apply for COBRA after the older spouse retires. Talk to the plan benefit manager ahead of time so you can be ready to act if you choose to go with COBRA.

Individual Insurance

Most private insurance companies offer individual plans. An “individual” plan may cover one person, spouses/partners or families with dependent children. Historically, people with preexisting conditions could be denied coverage or charged a high premium. This will no longer be the case in 2014 when the Affordable Care Act goes into effect. is a good place to start when looking for insurers in your area. You may also want to contact your current insurer to see what individual plans are available.

Group Health Plans

Some organizations offer group health plans to their members. These might include professional, alumni and social organizations. Premiums may be lower for this type of coverage than for individual insurance. Check with the organizations you belong to and see if they offer this member benefit.

HIPPA-Protected Insurance

HIPAA, or the Health Insurance Portability and Accountability Act of 1996, allows individuals to buy insurance that doesn’t exclude or limit coverage for preexisting medical conditions. (Note that the Affordable Care Act provides additional protections.) You are protected by HIPPA if you’ve had group or COBRA insurance for at least 18 months with no break in coverage longer than 63 days. You can learn more about your protections from your state department of insurance.

Spouses facing Medicare decisions have many things to consider and choices to make. Take the time to understand your specific situation and learn your options.

–This information is provided by Medicare Made Clear – If you or someone in your family is 65 or older and is in need of a Medicare Supplemental Plan or already has a plan, but wants to make sure that it is the right plan please give us a call (909)792-3300 or (888)891-5557 or go to our website  and we will give you a quote and help you keep money in your pocket