Each year, from October 15 through December 7, people with Original Medicare have the option to switch to a Medicare Advantage plan, which must cover at least what Original Medicare covers. They cannot be denied coverage or required to pay more because of pre-existing conditions. (People with end-stage renal disease are not eligible for a Medicare Advantage plan but Medicare has a test that provides this right to some MA plans.)
Likewise, if you have a Medicare Advantage plan, you are free to pick a different Medicare Advantage plan, or you can drop Medicare Advantage and switch to Original Medicare.
Everyone with Medicare — now roughly split between Original Medicare and Medicare Advantage — also has the option during open enrollment of purchasing a private Part D prescription drug plan or changing to a different Part D insurance plan.
People with Original Medicare (Parts A and B of Medicare) can also choose whether they want to buy a Medigap policy, also known as a Medicare supplement policy. And people who already have a Medigap policy can buy a different Medigap policy.
Medigap policies fill, to varying degrees, the holes in Original Medicare. The biggest hole is that Original Medicare pays only 80 percent of covered expenses, leaving beneficiaries on the hook for the other 20 percent. As anyone who’s stayed in a hospital or had major surgery knows, that can be 20 percent of a very, very big number.
Most people shop for Medigap during the annual enrollment period, but you can select a Medigap plan anytime during the year. There are 10 different Medigap “letter” plans. Coverage within each type of plan must be identical. This means that all letter A plans are the same, all letter B plans, and so on. But premiums can and do vary a lot. So shopping around for the best rate is a must. Specific coverage requirements of the various plans can be found in the annual “Medicare & You” handbook.
People with Original Medicare who switch to Medicare Advantage cannot keep their Medigap plan should they have one. Medigap plans are not allowed for people with Medicare Advantage.
People have guaranteed rights to Medigap policies on favorable terms when they’re first eligible for Medigap. But later on, these rights are not available in many states, possibly adding to Medigap policy costs and perhaps even restricting their availability.
So, if you’re thinking of changing Medigap policies, check with your state insurance department or call a counselor with the State Health Insurance Assistance Program (SHIP) to learn about rules where you live. And if you drop Medigap as part of a switch to a Medicare Advantage plan, you should consider these consequences should you wish to return to Original Medicare with a Medigap policy in the future.
PART D DRUG PLANS
Active plan shopping may yield big benefits in Medicare Part D prescription drug plans. Premiums, deductibles, and copays change every year. So might your health, leading to different drug needs. With 20 to 30 different Part D plans available in most parts of the country, comparing costs makes sense.
Many Part D beneficiaries qualify for low-income subsidy (also known as LIS) or benchmark plans that charge zero monthly premiums.
Here are seven questions to ask:
- How will your overall costs change next year?
- Are all your prescription drugs still included in your plan formulary (the list of prescription medicines covered by the plan)?
- If you take any expensive medications, how will they be treated?
- Can you still get your prescriptions filled at your local pharmacy, and at what price?
- Are your prescriptions written by a Medicare-enrolled provider?
- What does the coverage gap (also known as the donut hole) look like in 2016?
- Is your income low enough to qualify for Medicare’s Extra Help program?
MEDICARE ADVANTAGE PLANS
Medicare Advantage plans must cover everything that Original Medicare covers. Many plans actually cover more, including hearing, vision, dental and even gym memberships. They combine these features in a single insurance policy, usually including Part D drug coverage, and it often costs less than Original Medicare, Medigap and a stand-alone Part D drug plan.
The plans can afford to offer these additional features because most of them require people to get their health care needs from a provider network created and managed by the plan. These networks can create big savings for insurers, but can also sharply restrict health care provider choices for Medicare beneficiaries.
Here are four shopping tips for Medicare Advantage plans:
Pay attention to plan ratings.
Check out the Centers for Medicare & Medicaid Services’ (CMS) five-star rating system for Medicare Advantage plans, which is based on more than 30 variables (there are additional measures used when rating Medicare Advantage Prescription Drug plans).
Look at total out-of-pocket costs.
Low Medicare Advantage premiums and zero premium plans may be appealing at first glance. However, as I’ve been stressing and stressing about, premiums are just one cost component of Medicare coverage. You also need to look at plan deductibles, coinsurance and copays.
MA plans offer an annual limit on out-of-pocket health spending for covered items, but individual plans are free to set lower caps. Make sure you compare the caps — known as MOOP, for maximum out of pocket costs.
There can be a separate ceiling for out-of-network health costs, which apply to Medicare Advantage “PPO” or preferred provider organization plans. Medicare Advantage Prescription Drug plans include yet a third out-of-pocket number for drug costs.
Find out who’s in your Medicare Advantage plan provider network.
Medicare Advantage insurers have online search tools to let you know if your preferred physicians, hospitals and other care providers are in their provider networks. You don’t want to sign up for a new Medicare Advantage plan only to learn that your doctor is not in it.