Medicare Open Enrollment: Your 3 Options Explained
While I am many years away from being Medicare eligible, many widows do rely on this government program for their health insurance coverage. If you’re one of these women, then you probably already know its Medicare open enrollment season.
Your first hint as to the time of year was the bevy of fliers landing in your mailbox from insurance companies. There is a good reason for the flurry of marketing materials: this is the one time of the year when you can change your Medicare coverage.
That’s right, October 15 – December 7 is your window of opportunity to change plans, and the insurance companies are hoping to woo you with their glossy brochures and earnest mailings. While there may be dozens of individual plans from which to choose, you really have three main options.
Here they are:
Medicare Open Enrollment Option No. 1: You can switch between original Medicare and Medicare Advantage.
If you have Original Medicare, your benefits come directly from the government. Your coverage is broken up into Part A and Part B. Part A pays for hospitalizations. Part B is medical insurance and will cover doctor visits and other outpatient care.
Most people don’t pay anything for Part A coverage, and the standard monthly premium for Part B is $121.80 although higher income people may pay more. Last year, the deductible for Part B was $166 (that’s how much you have to pay out of pocket before Medicare will cover anything). The Part A deductible was $1,288. As of this writing, 2017 figures haven’t been made available yet. You may also have co-insurance costs that equal 20 percent of your doctor bills.
Medicare Advantage plans offer all the same benefits as original Medicare, but your coverage is provided by a private health insurance company. They may also offer additional coverage not included in original Medicare such as vision, dental or prescription drug coverage. The price, deductible and co-insurance requirements for these plans vary from insurer to insurer.
During open enrollment, you can switch from one to the other. So if you had original Medicare this year, you could decide to try out a Medicare Advantage plan for next year. Or vice versa. To help you decide if a switch is in order, let’s sum up the pros and cons:
Advantages: Ability to see any doctor that accepts Medicare. No need to choose a primary care doctor or get a referral for a specialist. May be less expensive than Medicare Advantage plans. Disadvantages: Relatively limited coverage. Among other things, there is no vision, dental or routine foot care. You’ll have to buy a Part D plan for prescription drug coverage (see option 3 below). Advantages: Access to more benefits (although specific coverage will vary by plan). Convenience of having all your coverage in one place. Disadvantages: May be more expensive and restrictive. May require you to use only doctors and facilities within a specific network. May require referrals to see specialists.
Ask yourself: Are the standard benefits from the government adequate, or do I want to pay more to get extra benefits from a private insurance company?
Medical Open Enrollment Option No. 2: You can switch Medicare Advantage plans.
If you already have Medicare Advantage coverage or if you are switching from original Medicare to Medicare Advantage, open enrollment gives you a chance to pick a plan.
Even if you like your current Medicare Advantage plan, it’s a good idea to double-check the details and make sure nothing is changing for 2017. Here’s what you should review.
- Total out-of-pocket costs: How much is the premium, deductible and co-insurance? Remember, the deductible is what you have to pay out of pocket before Medicare will pay a dime. Is there a cap on your annual costs? Will brand name prescriptions cost you more than generics?
- Benefits: All Medicare Advantage policies MUST cover everything that’s included in original Medicare. What you need to consider here is what extra benefits are included. Is there prescription drug coverage? What about dental and vision? Will the plan pay for dentures, foot care or hearing aids? Does it offer any wellness programs to help you control chronic health conditions?
- Network restrictions: Most Medicare Advantage policies operate as PPOs or HMOs which means they have a network of providers that participate with the plan. You’ll need to use those providers or the company may not pay your bills. Make sure your preferred doctors participate. Also, check to see if you’re required to use certain pharmacies to fill prescriptions.
- Prescription drug restrictions: Just as insurance companies have a list of participating doctors, they also have a list of approved medicines. Known as a formulary, this list covers what drugs are covered and how much the co-pay will be. Make sure your prescriptions are listed before signing up.
Ask yourself: What services and doctors do I use most and will this plan pay for them?
Medicare Open Enrollment Option No. 3: You can select a new Medicare Part D plan.
This final option is for those who opt for original Medicare or who choose a Medicare Advantage plan that doesn’t include prescription drug coverage (there are a few out there that don’t!). In either case, open enrollment is your chance to buy or switch Medicare Part D plans.
Part D plans are standalone policies sold by private insurance companies to provide prescription drug coverage. Note: the government does not provide direct prescription drug coverage so the only way to get a plan is through a private company.
When you’re comparing Part D plans, you’ll want to look for pharmacy and prescription restrictions (see the last bullet point above) as well as the monthly premium and the co-payment you’ll have each time you fill a script.
Ask yourself: What prescriptions do I have, does this plan pay for them and how much will I have to pay each time they are filled? Bonus question: Can I fill this prescription at my local pharmacy?
What if I don’t do anything during Medicare open enrollment?
It’s all so overwhelming, I know. You may be wondering what happens if you decide to stick your head in the sand and ignore the whole thing. Well, the world won’t end. What will happen is that your elections from last year should simply renew for 2017.
If you have original Medicare and are happy with it, there’s really not much risk in simply renewing your policy. Just be aware your premiums will be going up about $20 a month.
However, if you have Medicare Advantage or a Part D plan, you should at least review your current policy to make sure there are no big changes planned for 2017. Networks, prescription drug formularies and out-of-pocket costs can change significantly from year to year. Even if you don’t want to spend time comparing other plans, you at least owe it to yourself to make sure there won’t be any unpleasant surprises when January rolls around.
Not sure how to read the plan information sent by the insurance company? Call their customer service line and ask a representative to walk you through any changes.
Will you be changing your coverage during Medicare open enrollment this year?
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