What to Do Now
Are you sure you’re in the right Medicare plan for your needs? Every year, Medicare beneficiaries can make changes to their enrollment for the following year during the fall open enrollment period, also known as the annual election period. This is an important opportunity, and you don’t want to miss out on your chance.
If your financial or medical situation has changed during the year, you may find that your current plan is no longer a good match for you. Also, plans can change from year to year, and new plans may appear in your area, so it’s always good to check your options.
AEP starts on October 15 and ends on December 7, but you shouldn’t wait until then to start thinking about coverage. Here’s what you can do now to prepare.
1. Get familiar with your options.
Medicare beneficiaries have multiple coverage options. This gives you the ability to pick a plan that works for you – but it can also be a little overwhelming at first.
Here are your two basic options:
- Original Medicare refers to Medicare Parts A and B. If you enroll in Original Medicare, you will need to enroll in a Medicare Part D Prescription Drug Plan to cover your prescription drugs. You can also purchase a Medicare Supplement Plan, sometimes called Medigap, but be careful – if you don’t enroll in a Medigap plan as soon as you first become eligible to do so, you might be denied coverage due to pre-existing conditions.
- Medicare Advantage plans, sometimes called Medicare Part C, are plans offered by private insurers. Most people have multiple Medicare Advantage plans to choose from, and the number of options has been growing. CMS estimates that there was an average of 39 plan options per county in 2020. Medicare Advantage plans combine Medicare Part A and Medicare Part B coverage. Most Medicare Advantage plans also include prescription drug coverage, but if your plan doesn’t, you can enroll in a separate Medicare Part D Prescription Drug Plan. You cannot enroll in Medigap if you are enrolled in Medicare Advantage.
2. Determine your health coverage needs.
You can’t predict what medical emergencies or new diagnoses you might have in the coming year, but you can assess your current healthcare needs and make sure they will be met.
Consider the following issues:
- What care will you need? Think about the treatments that you might need other than routine and preventative care. For example, are you expecting to need any type of surgery? If so, you’ll want a plan that covers it with few out-of-pocket costs. Also, do you need vision, hearing or dental care? These services aren’t usually covered under Original Medicare, but some Medicare Advantage plans provide coverage. Medicare Advantage plans may also provide other additional benefits. Make a list of everything you want coverage for and rank it in terms of importance.
- Which providers will you want to see? Medicare Advantage plans may use networks of covered providers, so if you join one, you want to make sure your preferred providers are covered. Make a list of your primary doctor, any specialists you see, and your preferred hospitals so you’ll be able to check whether they’re included in a plan’s network.
3. Make a list of your prescriptions.
Most prescription drug plans use a formulary, or a list of covered prescriptions. To avoid paying too much out of pocket, you’ll want to make sure that your prescriptions are covered. You’ll also want to compare the copays in different plans.
Make a list of all your prescriptions, including the drug name and the dosage. Also write down the pharmacies you like to use. This information will be very helpful once it’s time to compare plans.
4. Calculate your budget.
Medicare isn’t free. Although most people qualify for premium-free Medicare Part A, you will have to pay a monthly premium for Medicare Part B coverage.
Some Medicare Advantage plans have a $0 premium, which means that there is no extra premium charge, although beneficiaries still have to pay their premiums for Medicare Part B coverage. In 2020, the average monthly premium for Medicare Advantage is $23.
If you enroll in a separate Medicare Part D Prescription Drug Plan, you’ll have to pay for that, too. In 2020, the projected average monthly premium is $30.
However, it would be a mistake to consider the premium and nothing else. You will also have other out-of-pocket costs, including copays or coinsurance and deductibles. If you’re not careful, these costs can add up quickly. If you’ve spent more than you expected to on healthcare this year, you’ve probably already realized this.
To make sure you’re picking the right plan for your needs, you’ll have to do a little math. You’ve already made lists of your expected coverage and prescription needs. When you start looking at plans during AEP, you’ll use this information to calculate how much you can expect to pay in copays and deductibles. Once you add this to the premium, you’ll have your total expected costs, and you can see if this works with the amount you have budgeted for healthcare expenses.
But what about unexpected costs?
If you’re worried about unexpected medical emergencies putting a strain on your budget, it’s important to note that Medicare Advantage plans have an annual out-of-pocket cap, which limits the amount you can be required to pay in a year. Original Medicare does not have an out-of-pocket cap.
5. Shop for an agent.
Picking a Medicare plan is a complicated task with high stakes. The good news is that you don’t have to do it alone.
Medicare agents have the training and experience needed to understand the ins and outs of coverage. They can explain your options, make recommendations and help you enroll in the right plan for your needs. Many Medicare agents contract with multiple insurance carriers to provide you with as many options as possible.
You don’t need to worry about the cost, either. Medicare agents get paid by the insurance companies, not by the clients. In other words, you don’t need to shell out any money for their help.
Medicare agents tend to get very busy during AEP, so it’s a good idea to reach out to agents ahead of October 15.