Here at the AgingOptions Blog, it’s our goal to provide you with news and features that are relevant to your life as a retiree or as someone planning for retirement. As Rajiv Nagaich always reminds us, decisions we make about our medical coverage are often among the most important choices of all, since so much of aging rises or falls on how successful we are at staying healthy for as many years as we can.
That’s why we put such emphasis on Medicare’s annual open enrollment period, which as of this coming week is approaching the halfway mark for 2022. You may be among the few who has diligently done your homework, read the fine print, and compared several possible strategies. Or you may be like the vast majority of those with Medicare coverage, who allow open enrollment to pass them by without even considering other plans to see if they’re on the right track.
Today we’re looking at this recent article from NerdWallet in which Kate Ashford, certified senior advisor and NerdWallet finance writer, walks us through some of the essentials you need to know while open enrollment is still active. Besides giving us a basic overview of the process, Ashford’s article ends with a helpful “Now, what?” section in which she describes what actually happens with various Medicare scenarios. Like similar Blog articles from one week ago and also from two weeks back, this information is here for one reason: to help make you a better health care consumer. So – let’s dig in.
70 Percent of Beneficiaries Don’t Compare Plans
Ashford’s NerdWallet article begins with a statistic that helps explain a lot. “Medicare open enrollment [started October 15 th],” she writes, “but 7 in 10 Medicare beneficiaries say they don’t compare Medicare plans during this period, according to a 2021 analysis by KFF, a health policy nonprofit. That’s not great.”
One of the biggest reasons that statistic is so shocking is that plans change. This is especially true of Medicare Advantage plans (explained in this earlier NerdWallet article). These plans, writes Ashford, “operate much like the private insurance you may have had through an employer” and “change from year to year.” Examples are many, but a few are especially troublesome: the doctor you like may no longer be part of your network, or your prescription drug prices may have gone up. In either case, a change of coverage might be called for.
But as Ashford emphasizes, open enrollment is for every beneficiary, not just those on Medicare Advantage. If you have original Medicare with a prescription plan, you need to check to see whether your Part D prescription drug coverage is adequate. You may also find it best to switch from Medicare Advantage to Medigap coverage (if you qualify) or vice versa.
With so much at stake, here’s how NerdWallet suggests you approach the decision about switching Medicare plans.
Don’t Overlook Open Enrollment Periods
As we stated, there’s a lot riding on the choices you make for your coverage, so the first piece of advice is to shop while you can. “If you have a Medicare plan, Medicare open enrollment from October 15 th to December 7 th is your opportunity to change coverage,” Ashford writes. “You can switch from Original Medicare to Medicare Advantage, or vice versa, or enroll in or change Medicare Part D prescription drug plans.”
It’s hard to imagine, but there may be some people who still think they can switch plans whenever they choose during the year – but that’s not the case. With some exceptions, this window of time is it when it comes to comparing and switching Medicare health plans – although that’s not quite the whole story for those with Medicare Advantage plans. “You can also use Medicare Advantage open enrollment from January 1 st to March 31 st each year to switch plans or go back to Original Medicare and sign up for a Medicare Part D drug plan,” Ashford explains. But your choices during this “second open enrollment period” will be much more restricted.
Consider the Cost and Availability of the Prescriptions You Take
“If you’re on any prescription medications, understand how your current plan will cover them in 2023 and whether another plan might be more affordable,” says Ashford. While this homework sounds complex, it’s really not.
“It can be as simple as putting your drugs into Medicare.gov,” says Scott Maibor, a Medicare advisor based in Boston. “You should at least verify that ‘This is the plan I’m on, this is the plan that’s recommended, what are the savings?’”
Once again, the biggest reason to examine your plan is because Part D plans get altered every year. “Part D prescription drug plans — whether you’re with Original Medicare or getting coverage through a Medicare Advantage plan — can change each year,” writes NerdWallet. “You may find that one of your prescriptions will cost more in 2023, or that your plan will stop covering it. Or you may have started a new medication and you can find a plan that charges you less for it.”
Moreover, you need to consider not only which drugs are covered, but how far you’ll have to go to get them. “Don’t forget to browse your drug plan’s preferred pharmacies,” Ashford reminds us. She spoke with Karen Schechter, professor of healthcare management at Maryville University, who told NerdWallet, “It’s not even just a matter of cost sometimes, it’s a matter of location. If I’m a person who needs to refill a prescription once a month, I may not want to go to a place that’s far away.” Finding out too late that your Part D plan no longer covers your preferred pharmacy is a rude awakening.
Don’t Be Hasty About Giving Up Your Medigap Plan
One of the biggest surprises for new Medicare beneficiaries concerns what’s called Medigap coverage. “You’re first eligible for a Medicare Supplement Insurance, or Medigap, plan once you’re 65 or older and you have Medicare Part B,” Ashford explains. “This six-month Medigap open enrollment period happens only once, and you can buy any policy you want, regardless of your health. After that, you may not be able to get a Medigap plan — or it might cost more.”
Why do you need Medigap? It’s because you’re at far greater risk of skyrocketing costs without it. “Medigap pays many of the out-of-pocket costs of Original Medicare,” says NerdWallet. “If you have a serious or chronic health condition, that can lead to significant cost savings. Some people switch to Medicare Advantage plans during open enrollment, not realizing they might not be able to switch back to a Medigap plan later.”
One of the biggest reasons people switch from Medigap to Medicare Advantage is relentless advertising. “Our clients are sitting at home, they’re seeing these commercials on television talking about the free gym membership, zero premiums and they go ahead and make changes on their own,” says Emily Gang, owner of The Medicare Coach. “They realize early in the year that they made a mistake and [they] can’t go back.”
You’ve Decided – so Now What?
Here’s where the NerdWallet article gets very practical, as Ashford explains what happens when you enroll or switch plans. “To sign up for a new plan, you’ll need your Medicare number and the date your Part A and/or Part B coverage started,” she writes. (All of this information is on your Medicare card.) We’ll quote the remaining bullet points straight from Ashford’s article.
You may be able to enroll online, but you might also have to make a call or two:
- If you’re moving from one Medicare Advantage plan to another, you’ll be disenrolled from your previous plan automatically once your new coverage kicks in.
- If you’re switching from Medicare Advantage to Original Medicare, call 800-MEDICARE to make the change or call your plan provider to disenroll. Don’t forget to sign up for prescription drug coverage (Part D) to avoid paying a penalty.
- If you’re switching from Original Medicare to Medicare Advantage, your new plan will transfer your benefits from Medicare.
- If you’re switching Part D drug plans, your old coverage will end when your new coverage starts.
- If you’re staying with your current plan, do nothing. Your coverage will renew automatically.
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(originally reported at www.nerdwallet.com)