Medicare Open Enrollment: Now Is the Time to “Shop Around”
Medicare plans definitely aren’t a dime a dozen, like Smokey Robinson sang. Don’t get “sold on the very first one.” With the annual Medicare Open Enrollment Period upon us, experts say that people with Medicare who “shop around” could lower their health-care costs. Medicare open enrollment began just a few days ago and runs through Dec. 7, 2016, so it’s prime time to consider Medicare Advantage and Part D drug plans and make changes in your coverage.
“Open enrollment” is defined differently by Medicare than you might recall from your days with employer-sponsored health coverage. In this case, it’s not the time to enroll in Medicare. Most people enroll in Medicare before their 65th birthdays. Instead, open enrollment is the time Medicare designates each year to make changes in coverage, such as leaving original Medicare (Parts A and B) and joining a Medicare Advantage plan, choosing a prescription drug plan or changing current coverage.
Let’s take a look at some of the options you might consider during the Medicare Open Enrollment Period. First, we’ll give a quick overview of Medicare Advantage and Medicare’s drug plans. Then we’ll discuss what you can change during the Open Enrollment Period and how these changes could save you money.
What Is Medicare Advantage?
Medicare Advantage (also known as Part C) offers a number of coverage options, such as health maintenance organizations (HMOs), preferred provider organizations (PPOs), fee-for service plans and more. With Medicare Advantage, most of your health services will be covered under this plan rather than original Medicare. A benefit of Medicare Advantage is that most plans have built-in prescription drug coverage.
What is Medicare’s Prescription Drug Benefit?
Medicare prescription drug coverage (also known as Part D) has a number of different plans that cover different medications. The Medicare Plan Finder allows you to search for plans that cover the medications you take. You also can find out how Part D works with your other insurance on the Medicare.gov website.
It’s important to know: Medicare has specific rules about Medicare Advantage plans and prescription drug coverage. If you enroll in a Medicare Advantage HMO or PPO that does not offer drug coverage, you can’t enroll in Medicare’s Part D coverage separately. (This rule does not apply to fee-for-service plans.)
What Can You Do During Medicare Open Enrollment?
People with Medicare can make a number of changes during the Open Enrollment Period. According to Medicare.gov, you can:
- Leave original Medicare (Parts A and B) and join a Medicare Advantage plan.
- Leave a Medicare Advantage plan and return to original Medicare.
- Switch between Medicare Advantage plans.
- Switch from a Medicare Advantage plan that doesn’t have drug coverage to one that does or vice versa.
- Join a Medicare Part D drug plan.
- Switch between Medicare Part D drug plans.
- Drop your Medicare Part D drug plan.
Which Changes Should You Make? Should You Change Your Coverage?
Brenda Abrahams of Medicare.com offers a helpful checklist to decide whether changes in your coverage are necessary. She recommends the following steps:
1. Confirm your eligibility to enroll.
Your first step should be to make sure you have Medicare Part A and Part B and that the Medicare Advantage plan you want is available in your area, says Abrahams. The same applies to the Part D drug plans.
2. Decide if your current coverage still meets your needs and review any coverage changes.
Consider your health needs – the services you use and whether your current coverage is sufficient. Abrahams offers the example of vision and dental services. If you need coverage for these services, joining a Medicare Advantage plan could be helpful. Abrahams also recommends reviewing documentation from Medicare about changes in covered services and medications. These documents are called “Evidence of Coverage” for Medicare Advantage and “Annual Notice of Changes” for Medicare Part D drug plans. The plan mails these documents to you before the Open Enrollment Period.
3. Be aware of how joining a Medicare plan may affect your other insurance.
Abraham advises that if you have other health coverage, such as an employer-sponsored plan or VA benefits, you should check with your plan administrator to confirm how your other plan works with Medicare. You also should find out whether your other insurance covers services Medicare doesn’t.
It’s important to know: Be certain you understand your other health plan’s policies about Medicare enrollment, particularly for Medicare Advantage or Part D drug plans, before making changes or joining these plans. Your other health plan may have policies that require you to maintain Medicare or that could result in losing your other coverage if you join Medicare Advantage or Part D.
4. Find the best price for your coverage.
Abrahams outlines a number of factors to think about when considering the cost of Medicare plans:
- Compare costs even if you’re happy with your present plan and coverage. You may be able to find the same coverage for a lower cost.
- Keep in mind that Medicare Advantage plans likely will charge a separate premium in addition to the Part B premium you’ll still have to pay. Despite this, Abrahams says the total cost should still be lower than with original Medicare.
- Check the provider network to be sure your doctors are still listed. If your doctors aren’t on the preferred provider list, you may pay more if continue to use them as out-of-network providers.
- Be sure that your prescription drugs are covered in the plan. The cost of your medications may vary from plan to plan.
- Consider the total costs to you: Costs involve more than premiums, Abraham says. She recommends factoring in premium costs, copays, deductibles and out-of-pocket maximums to determine the total cost of the plan.
- Review plan ratings for quality and customer satisfaction. Plans with a 5-star rating indicate excellence, Abrahams says.
U.S. News and World Report confirms Abrahams’ checklist with a similar set of guidelines. While they also recommend double-checking the preferred provider network, U.S News adds a suggestion to check the pharmacy provider list as well. Having both your doctors and your pharmacy in-network will cost less than out-of-network services.
Why Should You Shop Around for a Better Plan?
One significant reason to research other plans during Medicare open enrollment is the possibility of substantial savings. U.S. News reports that each year about 8 in 10 people on Medicare Advantage and Part D drug plans stick with the coverage they have rather than shopping around during open enrollment. But that kind of loyalty can come at a steep price: People who switched Part D policies saved about $600 in drug costs. The savings could be even greater for people who switch Medicare Advantage plans: They may save more than $1,000, says U.S. News.
Still not convinced? A Kaiser Family Foundation study found that people who changed their plans were more likely to have lower costs than those who stuck with the same plan. From 2006 to 2010, 46 percent of those who switched plans lowered their premiums by at least 5 percent, while just 8 percent of those who stayed with their plans had the same reduction in premium costs. And the data get even worse for people who stick with their plans: Kaiser found that 78 percent of people who stayed with their plans saw a premium at least 5 percent higher than the previous year.
If you decide to stick with the coverage you have, do take the time to make sure your plan and its benefits haven’t changed.
What If You Don’t Know How to Decide on a Plan?
If you want to shop around, but you’re not sure where to start or how to weigh your options, you can get help from several resources:
State Health Insurance Assistance Programs (SHIPs): Every state in the U.S. has a SHIP that helps people with Medicare make decisions and understand their benefits. The SHIPs are objective, educational resources – not salespeople. They provide one-on-one insurance counseling for people with Medicare.
The Medicare Plan Finder: Medicare offers the Plan Finder to help you find Medicare Advantage and Part D drug plans that will meet your needs. You’ll also see star ratings from one to five stars that show the quality of both Medicare Advantage and Part D drug plans.
Medicare Rights Center: This organization has counselors available to help people with Medicare with questions about their insurance options, their rights, their quality of care and much more.
Tell Us About Your Experience.
What experiences have you had in changing your health coverage during Medicare open enrollment? Were you able to save money by changing plans? Did you choose to stay with your plan? How did it work out? Tell us in the comments.