Thu, Nov 5, 2020

Choosing the Right Medicare Plan During Open Enrollment

During the Medicare Open Enrollment Period (OEP) October 15 through December 7, you can re-evaluate your current coverage (Medicare Supplement or Medicare Advantage Plan) to make sure you’re enrolled in the plan that best fits your needs.

If you’re signing up for Medicare for the first time, you follow a different schedule. To avoid a late enrollment fee, you must sign up during the 7-month period around your 65th birthday– three months before, the birthday month, or three months after the birthday month.

Even if you are satisfied with your current coverage, you should still make the effort to explore what’s new and different. Each year insurance companies make changes to drug formularies, provider networks, copays, and more. Your health needs—the doctors you visit or the medications you take—may be different this year, too.

“If you don’t take time to make sure you still have the appropriate plan, you could end up spending a lot more than you need to—or not getting the coverage you need,” says Fred Riccardi, vice president of client services at the Medicare Rights Center, a consumer service organization. 

Here’s what you need to know to make the most cost-effective choice for your Medicare coverage in 2021:

One option to consider is a Medicare Advantage plan, which is run by private insurers that offer coverage through HMOs or PPOs. Premiums for Medicare Advantage plans look very attractive to seniors because they are very low and in some cases zero premiums. And they typically include limited vision, dental care, and drug coverage.  Medicare Advantage plans may offer other health-related benefits, like home-health aids, and home-safety modifications, such as grab bars and wheelchair ramps. Those services are not generally covered under traditional Medicare. 

But These Plans Do Have Drawbacks

Low premium costs and the all-in-one simplicity of Medicare Advantage plans can be appealing and many seniors choose this option without fully understanding the details of the coverage. Medicare Advantage plans do have significant shortcomings: In a new report from the U.S. Health and Human Services’ Office of Inspector General, federal auditors cited “widespread and persistent problems” related to denials of care and payment in these plans.

The report also raised concerns that the insurers, who collect a fixed fee from the government for taking care of Medicare patients, have an incentive to “deny pre-authorization of services for beneficiaries, and payments to providers, in order to increase profits.”

Another caveat: If you enroll in Medicare Advantage, you may have a hard time getting supplemental Medigap coverage if you later decide you want to switch to traditional Medicare.

Under federal law, insurers cannot deny you Medigap insurance when you initially enroll in Medicare at age 65, and they must renew your coverage annually as long as you pay your premiums. But if you try to buy Medigap insurance outside of that initial enrollment period, insurers in many states can deny coverage or charge you higher premiums based on your health or pre-existing conditions.  

Low Premium Costs Can Be Misleading

Perhaps the biggest selling point of Medicare Advantage is that the premium costs often seem low, with some plans advertising $0 premium policies. But focusing on low monthly premiums alone is a mistake.

“There might be trade-offs that could result in higher out-of-pocket costs,” says Mary Johnson, a Medicare policy analyst with The Senior Citizens League, a nonpartisan senior advocacy organization.

A better strategy is to estimate your total out-of-pocket costs under the plan. Take a look at your past medical needs and consider what care you might need in the year ahead. Then add up the copays, deductibles, and coinsurance payments you are likely to pay. Your insurer may have an online cost estimator tool that may help, and you can find more resources at medicare.gov. Don’t forget to do a separate calculation for your prescription drug costs; more on that below. 

Do Your Homework before Enrolling

If, after weighing the pros and cons, you ultimately decide that Medicare Advantage is your preferred choice, you will need to decide whether to stay with your current plan or switch to another offering.

Your first step is to check your current plan’s offerings for 2021. Look at the details in the “annual notice of change,” which your insurer should send to you in September; you can also call your insurer or go to its website to get the information. Then use the Medicare Plan Finder tool or call Medicare to find out what other plans are available in your area and compare them.

Once you know which plan looks most promising, read the fine print and dig into the details—you want to make sure your medical treatment will actually be covered. Call the insurance companies, or check their websites, to learn what doctors and hospitals are in the plan’s network. Then double-check this information by calling your healthcare providers directly to make sure they’re still participating.

To avoid surprise medical bills, be sure to investigate what happens if you use an out-of-network provider, as well as what the referrals and pre-authorizations you will need to see a specialist. And find out whether, and how, you’ll be covered if you’re traveling out of your coverage area.

Review Your Drug Coverage

If you’re among the 72 percent of Medicare beneficiaries enrolled in a drug plan, whether a stand-alone Part D plan plus a Supplement or a Medicare Advantage plan which includes prescription drugs, it’s worthwhile to evaluate your current coverage. As with your medical plan, you should have received a detailed breakdown of changes for 2021 from your insurer. You can also compare your drug plan with other options by using the Medicare Plan Finder tool.

CMS projections show that the average basic premium for a Medicare Part D prescription drug plan will fall to $32.50 per month next year from its current $33.59. But here, too, you need to look beyond the premiums to determine your total costs: Make a list of your prescription medications, then check out your plan’s formularies to make sure your drugs are covered and to learn which tier your drugs are in. (The higher the tier, the higher your copay.) And look at the costs of deductibles and coinsurance, especially if you’re taking expensive specialty drugs.

Even if your prescriptions are covered, there may be hurdles to accessing them, so check the plan’s rules now. In 2019 Medicare Advantage plans were allowed to require “step therapy,” which means, in certain cases, you’ll need to try a less expensive drug before you’ll be covered for a more expensive one. Or you may be steered toward a preferred pharmacy instead of your local drugstore.

Reliable Help Is Available

With all the information about Medicare coming your way during open enrollment, assessing your coverage and finding the best plan can be confusing. On FirstCommunity’s website you’ll find extensive information about Medicare Basics and details about Medicare Advantage Plans and how they differ from Original Medicare and Medicare Supplemental plans. Visit our website or just call or stop by our office at 699-A Gallatin Street in Huntsville. We’ll be happy to go over all the options available to you, including Medicare  plan options and prescription coverage. Call Karen at 256-532-2783 or 256-532-2785.


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