These six moves will help you find a Medicare plan that fits your health care needs
By Mary C. Hickey
If you’re one of the 58 million Americans on Medicare and you’ve been happy with your coverage, you may be tempted to ignore this fall’s open enrollment period, which began in mid-October and runs through Dec. 7 for most beneficiaries. Do nothing and you’ll likely be automatically re-enrolled in your current plan for 2018.
A good idea? Not at all. Insurers are constantly altering their coverage from year to year, including the amount you pay in premiums, copays, and deductibles. Your health needs may change too.
“The plan that was right for you last year may not be the best one for next,” says Patricia Barry, author of “Medicare for Dummies” (Third Edition). “Shopping around to make sure you’re selecting the right plan can save you hundreds, even thousands of dollars.”
Yet most seniors don’t bother to make any changes. Only about 18 percent of Medicare Advantage members switched policies during recent open enrollment periods, according to a Kaiser Family Foundation report. A study by the National Bureau of Economic Research found that Medicare Part D enrollees who changed their drug coverage saved an average of $180 the following year.
These six guidelines can help you get the best coverage at the lowest cost:
1. Look for changes in your plan.
Fall open enrollment allows seniors with traditional Medicare (Parts A and B) to change their Part D prescription drug plan, and for those enrolled in Medicare Advantage to change to another version of the plan.
“If you’re in those plans, you should have received an ‘annual notice of change’ in the mail in late September,” says Samantha Morales, associate director of client services at the Medicare Rights Center, a nonprofit consumer service organization. (Call your insurance company or visit its website if you’ve misplaced that letter.)
Check that information for any changes to the plan’s “formulary,” which is the list of prescription drugs it covers. Insurers also assign drugs to one of five tiers, each with a different copay, which can also change.
A prescription drug with a $5 copay one year could have a $10 copay the next year, or a brand-name drug may be dropped from the formulary completely. So you’ll need to compare the next year’s drug line-up with the list of medications you are taking.
With Medicare Advantage, which typically provides health care through an HMO or PPO, you may see changes in the doctors and hospitals included in their networks. Some of these plans also include vision and perhaps dental coverage, so find out if those offerings will be the same next year as well.
2. Add up your total out-of-pocket costs.
Premium costs for most Medicare Advantage recipients will average $30 a month next year, which is two dollars less than in 2017, according to the Centers for Medicare & Medicaid Services, the federal agency that oversees these programs. The average premium for Part D will go down by $1.20 to about $33.50 a month, the first decline since 2012.
For those who are collecting Social Security, which automatically pays your Part B premium, your costs will be about $109 because of a federal law that prevents Medicare from lowering your Social Security payment.
If you’re not on Social Security, the average Medicare Part B premium will be about $134 a month, roughly the same as it was in 2017. But the premium costs for many high earners will rise—for individuals earning between $133,001 and $160,000 ($267,000 and $320,000 for married couples filing jointly), Part B premiums will jump by $80 a month.
Still, “consumers really need to look beyond the premiums to understand their total out-of-pocket costs,” says David Lipschutz, senior attorney at the Center for Medicare Advocacy, a national nonprofit organization.
To understand the true cost of your plan, add up what you will likely pay in deductibles and copays, which can offset any savings in premiums. Use your benefits statements and medical bills for the past year as a guide.
3. Assess your medical needs.
By this point, you will have gathered a list of your prescription medications and recent medical expenses. Now consider how those health care costs might change next year: Will you need a costly knee replacement surgery? Have you been prescribed an expensive specialty drug? If so, a different plan might be in order.
Think about convenience and your personal preferences, too. Some prescription plans will steer you toward a “preferred pharmacy” instead of your favorite local drug store or give you a better deal if you order prescriptions by mail. Others mandate “step therapy,” which means you have to try a generic before you can use a brand-name drug.
Medicare Advantage plans often require pre-authorization to see specialists, have strict rules about using out-of-network providers, and have varying levels of copays for hospital services. Check out all of a plan’s particulars before deciding what best works for you at a price you can afford.
4. Consider the consequences of switching.
During fall open enrollment, you have the option of changing from traditional Medicare to Medicare Advantage, and vice versa. But switching to traditional Medicare after being in Medicare Advantage can be difficult if you want to enroll in a Medigap plan, which is private insurance that helps defray costs not covered by Parts A and B.
Under federal law, insurers cannot deny you a Medigap policy when you initially enroll in Medicare—you have a seven-month window around your 65th birthday month to sign up. The law also requires that insurers renew your coverage each year as long as you continue to pay your premiums.
But if you try to buy a Medigap policy after the initial enrollment window, insurers might be able to turn you down based on your health, or charge higher prices, due to a pre-existing condition. (There are exceptions: Some states provide greater protections, so be sure to check.)
The fall open enrollment does not apply to Medigap policies, which aren’t part of the government Medicare program. If you want to make changes to your Medigap plan, contact insurance companies for information on what you can do and when you can do it.
5. Use these helpful resources.
Plan to spend a few hours doing your research. The best place to start is with the Medicare plan finder tool. After you enter your zip code and specific information about your medications, you can compare the overall costs of the various Part D options.
This same tool lets you compare Medicare Advantage plans, but you’ll need to perform two different searches: one to compare medical benefits, and the other to compare drug coverage. (If you’re not comfortable using an online tool, you can get the same information by calling Medicare at 800-633-4227.)
Another good resource is the State Health Insurance Assistance Program (SHIP) which provides free help over the phone. To find your state’s program, go to Shiptacenter.org or call 877-839-2675.
Once you have the information, the Medicare Rights Center advises confirming everything by calling the insurance company you plan to use. “Make sure to write the date and time of your phone call, and get the name of the customer service representative you spoke with,” Morales says. For extra peace of mind, she suggests calling your doctors for confirmation, too.
Finally, low-income seniors should check out the Medicare Savings Program, which can help with out-of-pocket costs. Those who are eligible may also be automatically enrolled in Part D Low Income Subsidy or Extra Help program, which can reduce the cost of your prescription drugs. To find out your eligibility, go to benefitscheckup.org, or call your state’s SHIP program.
6. Don’t miss your deadline.
For most beneficiaries, your enrollment decision must be made by December 7. But if you live in a place affected by recent hurricanes, you have until Dec. 31 to sign up—those areas include Florida, Georgia, Louisiana, South Carolina, Texas, Puerto Rico, and the U.S. Virgin Islands.
Once you’ve made your selection, you can enroll in a new plan by calling Medicare at 800-633-4227. Take detailed notes of your phone conversation with the Medicare representative in case of any problems down the line.
After all that work, if you conclude that your current plan is still your best option, do nothing and you’ll be automatically re-enrolled. Your new coverage starts Jan. 1.