Philip Moeller is an expert on retirement, aging, and health. He is co-author of the recently updated New York Times bestseller, “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” His companion book, “Get What’s Yours for Medicare: Maximize Your Coverage; Minimize Your Costs,” has just been published.
Understanding Medicare’s Annual Open Enrollment Period
By Philip Moeller
Despite all the complexities and shortcomings of Medicare, the program offers one compelling saving grace to the 55 million people it covers – an annual enrollment period that in most respects permits people to correct any problems with their coverage by signing up for a new set of Medicare policies without penalty.
This annual Medicare open enrollment period begins each year on Oct. 15 and extends through Dec. 7. During this period, you can shop for new Medicare policies and even switch from Original Medicare (Parts A and B) to a Medicare Advantage plan or vice versa.
Despite this annual “do over” provision, most people don’t change plans, despite studies that repeatedly find they could save money and improve their coverage by doing so. Doing nothing here means you actually are doing something — automatically re-enrolling in your current plan.
UNDERSTAND THE BASIC CHOICES YOU HAVE
People with Original Medicare have the option during open enrollment of buying a Medicare Advantage plan, which must cover at least what Original Medicare covers. They cannot be denied coverage or required to pay more because of pre-existing conditions. (An exception to this rule is that people with end-stage renal disease are not eligible for a Medicare Advantage plan.)
Likewise, if you have a Medicare Advantage plan, you are free to pick a different Medicare Advantage plan, or you can drop Medicare Advantage and switch to Original Medicare.
Everyone with Medicare — the roughly 70 percent with Original Medicare and the 30 percent with Medicare Advantage — has the option during open enrollment of purchasing a private Part D prescription drug plan or changing to a different Part D insurance plan.
PART D PLANS
For 2017, active plan shopping can yield big benefits. Each year, the private insurers who sell Medicare Part D prescription drug plans and Medicare Advantage plans (technically known as Part C of Medicare) change key features of their plans.
A plan that was great for you this year may be less suitable next year than other plans. But you won’t know if you don’t do some homework. Fortunately, doing a thorough job of researching Medicare changes needn’t take more than an hour or two.
Here’s what to look for:
- How will your overall costs change next year?
- Are all your prescription drugs still included in your plan formulary (the list of prescription medicines covered by the plan)?
- If you take any expensive medications, how will they be treated?
- Can you still get your prescriptions filled at your local pharmacy, and at what price?
- Are your prescriptions written by a Medicare-enrolled provider?
- What does the coverage gap (also known as the donut hole) look like?
- Is your income low enough to qualify for Medicare’s Extra Help program?
MEDICARE ADVANTAGE PLANS
Medicare Advantage plans must cover everything that Original Medicare covers. Many plans actually cover more, including hearing, vision, dental and even gym memberships. They combine these features in a single insurance policy, usually including Part D drug coverage, and it often costs less than Original Medicare, Medigap and a stand-alone Part D drug plan.
Original Medicare allows you to use any health care provider that accepts Medicare, and nearly all do. Not so with Medicare Advantage plans. One of the primary reasons they can afford to offer additional coverage features is because most of them require people to get their health care needs from a provider network created and managed by the plan. These networks can create big savings for insurers, but can also sharply restrict health care provider choices for Medicare beneficiaries.
Here are three shopping tips for Medicare Advantage plans:
- Pay attention to plan ratings.
- Look at total out-of-pocket costs.
- Find out who’s in your Medicare Advantage plan provider network.
People with Original Medicare (Parts A and B of Medicare) can also choose whether they want to buy a Medigap policy, also known as a Medicare supplement policy. And people who already have a Medigap policy can buy a different Medigap policy.
Medigap policies fill, to varying degrees, the holes in Original Medicare. The biggest hole is that Original Medicare pays only 80 percent of covered expenses, leaving beneficiaries on the hook for the other 20 percent. As anyone who’s stayed in a hospital or had major surgery knows, that can be 20 percent of a very, very big number.
People with Original Medicare who switch to Medicare Advantage cannot keep their Medigap plan should they have one. Medigap plans do not provide any coverage to people with Medicare Advantage.
People have guaranteed rights to Medigap policies on favorable terms when they’re first eligible for Medigap. But later on, these rights are not available in many states, possibly adding to Medigap policy costs and perhaps even restricting their availability. So, if you drop Medigap as part of a switch to a Medicare Advantage plan, you should consider these consequences should you wish to return to Original Medicare with a Medigap policy in the future.
If you need help with open enrollment decisions, I recommend you call a counselor in your state with the State Health Insurance Assistance Program (SHIP). This is a free service.
Good luck in finding your best Medicare solutions!