One of the Biggest Financial Mistakes You Can Make In Retirement
If you're like most Medicare beneficiaries, you rarely make changes to your health or drug plans, but this is one of the biggest financial mistakes you can make in retirement. Insurers make numerous changes to drug and health plans that increase your out–of–pocket costs every year. Your health changes, and the plans that once were your best deal, may be full of high cost surprises now. Every year new plans, even new plans offered by your current insurer, compete for your business by offering similar or better coverage, for lower costs. Comparing your Medicare plan coverage every year and making changes when it's in your best interest, is one of the most important financial habits to get into.
Most seniors and their family members feel stymied by trying to figure out which plan would be the best choice. You may also worry that pre-existing health conditions make it difficult to change plans. That's not the case but either way, you will benefit from discussing your situation with a Medicare benefits counselor, not an insurance agent. Free, unbiased counseling is available through your State Health Insurance Assistance Program (SHIP) which operates in almost every area of the country. Local Area Agencies on Aging can refer you to counselors who help you learn about and understand your health plan choices, and to make a switch.
But first there's a lot you can learn for yourself online. Here are some things you need to know:
- Annual Open Enrollment Period: The annual Medicare Open Enrollment period runs from October 15, through December 7, 2012. During this period you can compare and switch Part D stand alone drug plans and Medicare Advantage plans.
- Drug and Health Plan Finders at www.Medicare.gov: The only way to be sure you're getting unbiased information is to use the drug and health plan finders on the Medicare website, not from a dot com (.com) or even a dot org (.org) website, because most others receive income from ads, selling health plans or prescription drugs. Using the Drug and Health Plan Finders you can get an overview of the Part D and Medicare Advantage options in your area and estimated costs based on the prescriptions you take. Click on the Drug and Health Plan Finder link on the Medicare.gov homepage and you will be taken to a page that will ask you a series of questions to get started. There's a Medicare Plan Finder online tutorial video to help show you what to do.
- Practice using the tool: Have your Medicare number (if you are enrolled in Medicare), information about your current coverage, and a complete list of prescription drugs, including dosages and the number you need per month at hand. The Plan Finder will ask you to provide information including your zip code, current Medicare coverage, the drugs you take, the pharmacies you plan to use, and whether you want to see just Part D stand alone plans or Medicare Advantage plans or both. For meaningful results accurately enter all your prescriptions. When complete get your Drug List ID number, print it out and save it. You don't want to enter it again every time you revisit the Plan Finder and invariably you will.
- Compare plans: Once you have entered all the information you will get your results. The results are available for both 2012 and 2013, but check and see which you are looking at. You first should compare how your current coverage is changing for 2013. You will also be surprised by what a difference a year makes in your lowest cost plan from 2012 to 2013. When making comparisons, check all the details. The results page allows you to compare up to three plans side by side. This is enormously helpful when juggling so many plans and details. Check the boxes of three you would like to compare. When comparing health plans, for example, you will see links to health plan benefits, drug costs and coverage, and plan ratings. Click each and print out results.
- Compare details carefully: When making health plan benefit comparisons, closely examine the co-payment structure between plans. Your lowest costing plan may not be the best deal if you have health conditions like diabetes, or cancer that require trips to specialists, and pricey outpatient services like CT scans. Refer to your 2012 medical expenses to give you an idea of what the costs would be under alternate plans.
- Before making a final decision talk it over with a Medicare benefits counselor: By the time you've combed through the coverage and cost details you may be ready to hit the "Enroll" link. Don't do it yet. Before making that decision talk it over with a local SHIP counselor. You can locate one in your area at www.shiptalk.org. This is especially important if you currently receive your coverage under traditional Medicare fee–for–service and you are considering switching to a Medicare Advantage plan, or if you receive your coverage through a former employer.
Get started now on a financial habit that can give you big savings for the time you invest in shopping around.
Find resources in your community using the Eldercare Locator.
Use the Health and Drug Plan Finder found at www.Medicare.gov.
Get free one–on–one counseling about your health and drug plans from an unbiased Medicare benefits counselor at www.shiptalk.org.