Why Social Workers Need to Understand the Medicare OEP
Medicare is integral to the economic security and health of people with disabilities and older adults. The type (or types) of coverage selected by beneficiaries during the OEP can have profound effects on health care access and cost.
The Centers for Medicare & Medicaid Services (CMS) encourages beneficiaries to review coverage options each year because the needs of each beneficiary and the coverage available change frequently. Yet, navigating Medicare annual enrollment can be challenging even for long-time beneficiaries and experienced family care partners (also known as family caregivers, with recognition of and respect for whomever a beneficiary considers “family”). A recent analysis found that beneficiaries who had disabilities and were younger than 65 years old were more likely to experience difficulty with Medicare enrollment and comparing coverage options, including ascertaining whether they qualify for financial assistance, than beneficiaries 65 years or older. Another analysis found that during the 2021 OEP, seven of 10 beneficiaries did not compare their coverage options—and that this proportion was even higher among four groups of beneficiaries: (1) people with an annual income of less than $10,000 (or, to a lesser degree, $20,000), (2) beneficiaries who identified as Hispanic (or, to a lesser degree, those who identified as Black), (3) individuals younger than 65 or older than 84, and (4) beneficiaries who were dually eligible for Medicare and Medicaid. Given that the type(s) of coverage selected by beneficiaries affect health care access and cost, enrollment patterns and decisions can exacerbate health inequities.
As a social worker, you can mitigate the challenges of annual enrollment and help reduce Medicare-related disparities in multiple ways:
Allowable Changes During the Medicare OEP
During the OEP, beneficiaries may join a Part D plan, switch from one Part D plan to another, or drop Part D. They may also switch from one MA plan to another, including shifting between plans with or without prescription drug coverage.
The OEP is also a time during which beneficiaries may switch from MA to original Medicare or vice versa. These changes have many implications, as illustrated in a Decision Tree infographic developed by the Center for Medicare Advocacy and the National Committee to Preserve Social Security and Medicare, two national nonprofit organizations with which NASW works closely. (The Decision Tree Infographic is one component of the Medicare Fully Informed Project. Although some of the cost information within this tool kit has not been updated in a couple years, the qualitative information—including the infographic—remains current and can help beneficiaries discern the appropriateness of original Medicare or MA for their individual circumstances.) Moreover, depending on the timing, beneficiaries who switch from MA to original Medicare may not have guaranteed issue rights. These rights prevent Medigap plan sponsors from denying purchase of a plan, charging more based on health status, or limiting coverage of pre-existing conditions. (Notwithstanding those rights, Medigap plan sponsors may adjust rates based on other factors, including age, gender, geography, marital status, and smoking habits. Furthermore, Medigap guaranteed issue rights may not apply to Medicare beneficiaries younger than 65 years.)
OOP Costs for Part A and Part B in 2024
Each year, CMS determines standard amounts most beneficiaries will pay out of pocket (OOP) for premiums, deductibles, and coinsurance in Part A and Part B. CMS recently released a fact sheet announcing the following information for 2024:
- Part A deductibles and coinsurance will increase in 2024:
- $32 for the inpatient hospital annual deductible ($1,600 in 2023 and $1,632 in 2024)
- $8 increase in daily coinsurance for the 61st through 90th inpatient hospital day (from $400 to $408)
- $16 coinsurance for each lifetime reserve day in an inpatient hospital ($800 to $816; each beneficiary’s 60 lifetime reserve days may be split across any hospitalizations that exceed a 90-day benefit period but can only be used one time—a sort of debit model throughout a beneficiary’s lifetime)
- $4 for skilled nursing facility coinsurance ($200 to $204)
- Part A premium: According to the CMS fact sheet, 99 percent of beneficiaries do not pay a monthly premium for Part A because either they or their spouse paid sufficient Medicare taxes while working. (CMS provides detailed information to help beneficiaries determine whether they qualify for premium-free Part A.) For beneficiaries who do pay premiums, costs will either remain the same or decrease by $1 per month ($278 or $505, respectively), depending on the beneficiary’s work history. People who do not qualify for premium-free Part A may also wish to check state or federal marketplaces to determine whether they qualify for an ACA subsidy on a non-Medicare plan.
- Part B deductible: The annual deductible for all Medicare Part B beneficiaries will be $240—an increase of $14 from 2023.
- Premiums for full part B coverage: The standard Part B premium will be $174.70 per month in 2024, an increase of $9.80 from 2023. According to CMS, this standard premium applies to 92 percent of beneficiaries—specifically, those with a modified adjusted gross income (MAGI) of $103,000 or less for beneficiaries filing individual income taxes and $206,000 for beneficiaries filing income taxes jointly. Beneficiaries with higher incomes will pay higher monthly premiums, as outlined in the fact sheet; the difference between the standard and higher premiums is known as the income-related monthly adjustment amount, or IRMAA. (For purposes of determining IRMAA, MAGI tiers above the $103,000 threshold vary for any beneficiary who is married and lives with a spouse at any time during the taxable year, but who files tax returns separately from their spouse.)
- Part B premiums for coverage of immunosuppressive drugs only: For the second consecutive year, reduced monthly premiums will be available to certain beneficiaries who are no longer eligible for full Medicare coverage because they have had a kidney transplant at least 36 months ago. These beneficiaries can continue Part B coverage solely for immunosuppressive drugs by paying a premium of $103 per month. Similar to premiums for full Part B coverage, IRMAA requires beneficiaries in upper-income tiers to pay higher premiums for immunosuppressive drug coverage, as described in the fact sheet; however, the space between the MAGI tiers is smaller than it is for full Part B coverage. Likewise, MAGI tiers beyond $103,000 vary for any beneficiary who is married and lives with a spouse at any time during the taxable year, but who files tax returns separately from their spouse.
Medigap OOP Costs in 2024
A high-deductible option is currently available for three types of Medigap plans:
- Plan F: The high-deductible version of this plan is available only to people who were newly eligible for Medicare—by virtue of age (65 years or older), disability, or end-stage renal disease—before January 1, 2020.
- Plan G: The high-deductible version of this plan is available only to individuals who were (or are) newly eligible for Medicare on or after January 1, 2020.
- Plan J: A high-deductible version of this plan is available only to beneficiaries who enrolled in the plan before June 1, 2010. Beneficiaries who were not enrolled in Plan J before that date cannot access either a high-deductible or standard-deductible version of the plan.
Each year, CMS establishes the amount of the annual high-deductible option for Plan F, Plan G, and Plan J. The high-deductible amount for each plan in 2024 will be $2,800, an increase of $100 from the preceding year. (These high-deductible plans may not be available in Massachusetts, Minnesota, and Wisconsin; as noted previously, each of these states authorizes its own standardized plans.)
MA OOP Costs in 2024
CMS projects that the average monthly premium for MA plans will be $18.50 per month in 2024 (a $0.64 increase from the 2023 premium of $17.86). CMS has developed fact sheets outlining the MA landscape (availability of plans and average premium costs) for each state and for the District of Columbia and Puerto Rico. MA plans are not available for residents of American Samoa, Guam, Northern Mariana Islands, or U.S. Virgin Islands.
OOP Costs for Part D in 2024
CMS projects that the average base monthly premium for Part D plans in 2024 will be $34.70, an increase of $1.96 from 2023. However, Part D premiums vary greatly and are influenced by multiple factors, such as geography, plan formulary, and plan deductible, copayments, and coinsurance amounts. CMS provides updated fact sheets regarding the Part D landscape for each state and for the District of Columbia, American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. Each fact sheet provides information regarding the availability of, and average premium costs for, Part D plans in the given state or jurisdiction.
Another significant factor in determining Part D premiums is beneficiary income. As a CMS fact sheet delineates, the average basic monthly premium for any Part D plan—regardless of plan features or geographic area—will increase for beneficiaries with a an individual or married-filing-separately MAGI of more than $103,000 or a joint MAGI of more than $206,000 (about 8 percent of beneficiaries enrolled in Part D plans). For example, four beneficiaries living in Alabama select the same Part D plan. Beneficiary 1 has an individual MAGI of $30,000; beneficiary 2 has a joint MAGI of $50,000; beneficiary 3 has an individual MAGI of $125,000; and beneficiary 4 has a joint MAGI of $240,000. Beneficiaries 1 and 2 will pay less for the same plan in Alabama than will beneficiaries 3 and 4.
CMS has set the following standard rates for Part D (prescription drug coverage) in 2024:
- The maximum Part D annual deductible a plan may charge in 2024 will be $545 (an increase of $40 as compared to 2023). Deductibles vary by plan, and some plans cover certain prescription drugs before the beneficiary meets the deductible.
- The initial coverage period—that is, the amount both the beneficiary and the Part D plan pay before the coverage gap begins—will be $5,030 in 2024 (an increase of $370 in relation to 2023). Each beneficiary’s “true OOP costs” (TrOOP) for the initial coverage period may not exceed $1,257.50 (a $92.50 increase); TrOOP for the coverage gap may not exceed $6,333.75 (an increase of $476.50).
- The threshold for the catastrophic coverage period in 2024 will be $8,000 (a $600 increase). When a beneficiary reaches this point, they will have no OOP costs until January 1, 2025, when the Part D benefit “resets” with a new deductible. In contrast, during 2023 beneficiaries have had to pay 5 percent of prescription drug costs during the catastrophic coverage period. This elimination of beneficiary cost sharing during the catastrophic coverage period is a result of the Inflation Reduction Act of 2022 (Pub. L. 117-169). In 2025, the OOP spending cap on Part D–covered prescription drugs will decrease dramatically to $2,000 per year, and beneficiaries will be able to divide that amount into monthly payments.
OOP prescription drug costs remain confusing for many beneficiaries. The Medicare Part D Cost-Sharing Chart, developed by the National Council on Aging (another nonprofit organization with which NASW collaborates), provides detailed descriptions of each coverage period and associated OOP costs.
Thanks to the Inflation Reduction Act, Medicare beneficiaries will enjoy other additional or continued savings related to prescription drug coverage in 2024. These savings are outlined in the next two sections.
Insulin and Vaccine Coverage
Beneficiaries who use insulin products that are covered by Medicare will pay no more than $35 per month’s supply of each covered insulin product in 2024; moreover, covered insulin products will not be subject to an annual deductible. These benefits, which were phased in during 2023, apply both to beneficiaries who use insulin products covered by their respective Part D plan and to those who use insulin through a traditional (that is, nondisposable) pump covered under Medicare Part B’s durable medical equipment benefit. (Please refer to NASW’s Medicare OEP 2022 Tips & Tools for additional details about insulin coverage under Part B and Part D.)
This consistency in coverage, combined with updates to the online Medicare Plan Finder (also known simply as “Plan Finder”), drastically simplifies Medicare coverage selection and enrollment for beneficiaries. During the current (2023) OEP, beneficiaries will be able to compare insulin coverage by using Plan Finder or calling Medicare, as they were able to do during the 2021 OEP and preceding years. (Contact information for Medicare is included in the “Enrollment Tools” section at the end of this publication.)
As in 2023, Part D enrollees will incur no OOP cost (including no deductible) for all adult vaccines recommended by the federal Advisory Committee on Immunization Practices. These include not only the vaccines for respiratory syncytial virus (RSV) and shingles, but also the combined vaccine for tetanus, diphtheria, and pertussis (whooping cough), commonly known as “Tdap,” and any ACIP-approved vaccines for SARS-CoV-2 (COVID-19). (As of this writing, Medicare covers the Pfizer-BioNTech, Moderna, and Novavax vaccines. Monitor Medicare coverage of COVID-19 vaccination and learn about Medicare coverage for other vaccines.)
Extra Help for Part D OOP Costs
Access to the Part D Low Income Subsidy (LIS) program, also known as “Extra Help,” is expanding in 2024. Any beneficiary who has an income of less than 150 percent of the federal poverty level (FPL) and who meets statutory resource limit requirements will receive the full LIS. In the past, the full LIS was available only to beneficiaries with an income of less than 135 percent of the FPL. (Learn more about 2024 OOP costs associated with Extra Help.)
Please refer to NASW’s 2022 Medicare OEP Tips & Tools for information about other types of financial assistance for Medicare beneficiaries.
Other IRA–based improvements to Medicare coverage for prescription drugs will take effect in 2025 and subsequent years.
CMS sent a print copy of its Medicare & You 2024 handbook by postal mail to all Medicare beneficiaries in September. The handbook is available in the following languages and formats:
- English—standard print, large print, audio compact disc, podcast, Braille, and eBook
- Spanish—standard print, large print, audio compact disc, podcast, and Braille
- Chinese, Korean, and Vietnamese—standard print
Although Medicare & You is updated annually, it includes only basic information regarding Medigap, Part D, and MA plans. CMS encourages beneficiaries to use the handbook for quick comparisons and to seek more thorough information from the following resources.
For users who have access to and are comfortable with digital technology, the Medicare Plan Finder (also known simply as “Plan Finder”) may be an appropriate tool for obtaining information about Medicare coverage options. Plan Finder is accessible by direct link or by clicking “Find health & drug plans” on the Medicare.gov home page.
Live support from CMS is available 24 hours per day, seven days per week, except on some federal holidays. According to CMS, 10 a.m. to 4 p.m. EST are the busiest hours on any given day, and Mondays and Tuesdays are the busiest days of the week. CMS offers three options for live support:
- Telephone—Users who do not have internet access or who wish to talk with a CMS representative can call 1-800-MEDICARE (1-800-633-4227). CMS representatives can converse directly with beneficiaries in English and Spanish, and language line interpretation is available for more than 200 other languages.
- Live chat—Users can initiate a live chat by clicking the chat icon in the top right corner of any Medicare.gov page, from the Contact Medicare page, or by going to Medicare.gov Live Chat.
Another resource for Medicare beneficiaries who need live assistance is the federally funded State Health Insurance Assistance Program (SHIP). SHIP can be especially helpful for the following people:
- beneficiaries with low literacy, including health and financial literacy
- beneficiaries with end-stage renal disease or other complex health conditions
- beneficiaries with a second type of coverage, including Medicaid
SHIP receives federal funding through the federal Administration for Community Living (ACL) and provides free, one-on-one counseling and assistance regarding Medicare and other health insurance questions. Unlike private insurance brokers, SHIP counselors do not sell Medicare plans or receive commissions for enrollments. Therefore, SHIP is an unbiased, trustworthy source of information.
SHIP sites exist in all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Availability of virtual and in-person appointments varies based on location and beneficiary need. Appointments tend to fill quickly during the OEP, although SHIPs without available appointments may still be able to help beneficiaries by phone. To find a SHIP site in your state or jurisdiction, visit the SHIP Locator or call 1-877-839-2675.
Social workers and beneficiaries seeking accurate information about Medicare coverage options may also find the following free resources useful: