New EARLY Deadline For Switching Medicare Plans — December 7th!
Medicare premiums and out-of-pocket costs are one of the biggest expenses you have in retirement. Seniors routinely spend one-third or even more of their Social Security payments on healthcare costs. That portion of your retirement budget grows bigger over time, both because your need for services increases as you age and because healthcare costs grow several times faster than your Social Security benefits. Failure to take action to keep those costs in line leaves you with dwindling income and resources.
TSCL’s annual Senior Surveys indicate that the vast majority of beneficiaries don’t take any action during Medicare’s Open Enrollment period to choose better health and drug plans that would save them money. In 2011, 83% of respondents said they kept their Part D plan and 88% stayed with their Medicare Advantage plan.
The cost difference between staying with a current plan or switching, can be significant. For example, seniors in my zip code who take Singulair, an expensive brand name asthma drug that has no generic, can choose from Part D drug plans that range in cost from $804 to $2,152 (including premiums and drug co-pays). Medicare Advantage plans in my area (which also include basic hospital and medical coverage) range from $2,208 to $4,493 per year. Depending on where you live, cost swings can be even greater.
The single most important way to control your healthcare costs is to review your coverage options every year and be prepared to switch plans when the choice is right for you. Not only does your health change over time, but insurers make changes that will cost you money — like increasing premiums, co-pays or even dropping the coverage of your drug or other services. With Medicare’s annual Open Enrollment period starting earlier this year on October 15th, and ending December 7, 2011, it’s time to find out what your choices are and how much you could save with a new Part D or Medicare Advantage plan.
What’s the best way to find the right coverage? Here are three key things you need to know:
1. Get unbiased information from a source that isn’t making a commission selling Medicare plans: To ensure you are getting a complete list of your coverage options and to compare costs of plans, the Drug and Health Plan Compare database tools found on the Medicare website at www.Medicare.gov provides you with the most complete and reliable data. Your results will be customized, based on the area of the country where you live, the medications you currently take, and the pharmacies you use. Selecting a plan blindly without basing your choice on the prescriptions you take or the doctors and hospitals that you normally use can result in much higher costs.
2. Learn about and determine the best type of coverage for your particular needs: Which is best for you, a Medigap supplement with a Part D plan, or a Medicare Advantage plan? One reason you may be spending too much is the fact that you’re in the wrong type of health plan to begin with. Medicare Advantage plans are popular in many areas of the country because premiums tend to be low. In my zip code, one of the best-rated Medicare Advantage plan charges no premiums for the health plan or drug coverage at all. Some Medicare Advantage plans also offer extra benefits not covered by Medicare like eye and dental exams. But they aren’t for everyone.
Medicare Advantage plans may have a limited coverage area, which would not cover you if you have two homes and spend part of the year in another state. Enrollees have co-pays or co-insurance costs for most services, and Medicare Advantage can be costly for older and sicker seniors who require more hospitalizations, skilled nursing stays or expensive outpatient procedures. You can also wind up with hundreds of dollars in unexpected out-of-pocket costs if you unknowingly visit doctors and other providers who weren’t part of your health plan’s network. While Medigap policies tend to charge higher premiums than Medicare Advantage, they cover most of the out-of-pocket costs that Medicare doesn’t and the coverage tends to be accepted by most providers.
3. Get unbiased, trained help: Choosing the right Medicare plan is complicated — but it’s critical to both your physical and financial health. Get help from trained Medicare insurance counselors through your State Health Insurance Assistance Program (SHIP). For the contact information in your area visit the Medicare website or contact your local Area Agency on Aging. Do it now. The Medicare Open Enrollment period ends early this year on December 7th.