Retirees may finally be able to leave some workplace rituals behind, but the annual open enrollment period for health insurance is one that sticks around.
Medicare’s open enrollment starts Tuesday and runs through Dec. 7. People who are turning 65 can sign up for three months before and after their birth month, but most current recipients can only make changes to their coverage during open enrollment.
Insurance plans change, so recipients should look into their options and consider their needs each year, said Fonda Buckles, community resources manager for the Denver Regional Council of Governments’ area agency on aging. Of course, no one can know the future, but people covered by Medicare can reasonably expect to have more needs, and more health expenses, over time, she said.
“Typically, people are entering retirement, and they’re fairly healthy,” but the right choice then may not be the best one in a few years, she said.
Here is a guide to some of the biggest questions about Medicare’s open enrollment period:
What do I have to decide during open enrollment?
If you enrolled in traditional Medicare, your Part A and B coverage (which pay for hospital stays and outpatient care) stay the same from year to year. You could change your prescription drug plan, known as Part D, and your Medigap supplemental plan, which reduces how much you pay in out-of-pocket costs.
If you’re in a Medicare Advantage plan, which rolls up the four parts into one, you could switch from one plan to another.
You also could go back and forth between traditional Medicare and Medicare Advantage, but think carefully before you do. Insurance plans have to sell you a Medigap plan when you turn 65, but they could refuse or significantly increase the price if you decide to join later. That means, if you choose a Medicare Advantage plan where you don’t need Medigap, you could be left shouldering high out-of-pocket costs if you ever switch back to traditional Medicare.
What are traditional Medicare and Medicare Advantage?
The federal government runs traditional Medicare, while private insurance companies run Medicare Advantage plans. Most Advantage plans include benefits that aren’t part of traditional Medicare, such as limited dental and vision coverage, but they also have more hurdles to accessing care, including the need to get an insurance company to sign off before patients can have certain treatments.
Broadly speaking, traditional Medicare offers greater flexibility, since members can see any provider in the country who takes it, while Medicare Advantage plans are cheaper, but have narrower networks that focus on one state or metro area, Buckles said. Which is more important will depend on each person’s health and financial circumstances, and whether they qualify for programs that lower out-of-pocket costs for low-income people, she said.
People who have traditional Medicare are responsible for 20% of the cost of their Part B care, which covers outpatient care and ambulance rides. Part B doesn’t have an out-of-pocket cost limit, so people who don’t have a Medigap policy to cover those costs could rack up thousands of dollars in bills, Buckles said.
“Even though it gives you a lot of flexibility… some people cannot afford that 20%,” she said.
Medicare Advantage may initially appeal more because it generally costs less and offers additional services, Buckles said. But recipients need to be sure that the extra services actually meet their needs and that they have thought about how narrow networks might limit them in the future, she said.
“It may not be as glamorous as they think,” she said.
What do I need to consider?
Colorado’s State Health Insurance Assistance Program advised recipients to think about whether:
Their health needs are increasing
They will need specific services that not all options cover, such as eye exams, dental work or hearing aid fitting
Doctors, hospitals and other providers that are important to them are in their insurance networks
Costs have gone up in their specific plan
Their plans will cover care in other states or countries, if they plan to travel
What their prescription drugs will cost under their current plan
If they were satisfied with any experiences using their plan over the previous year
You can use Medicare.gov’s plan finder tool to compare your options.
If a recipient only remembers to check one thing when comparing plans, it should be whether the plan covers all of the prescription drugs they need, said Kathy Madden, SHIP services and training manager at the Colorado Division of Insurance. If they remember to check two things, calling their doctors to make sure they’re in the plan’s network would be the second priority, she said.
“If not all your drugs are on the formulary, that’s not the plan for you,” she said.
What’s changing this year?
People with Part D plans will have the option to spread their $2,000 maximum out-of-pocket cost evenly over a year. Typically, in insurance, people pay a larger share of their drug costs at the start of the year. Those payment plans aren’t automatic, though, so people need to apply with their insurance company, Madden said.
Other changes this year include eliminating the “donut hole” before “catastrophic” coverage kicks in for prescription drugs and allowing people who are eligible for both Medicare and Medicaid to switch their prescription drug plan more often, Buckles said.
The donut hole refers to a gap where recipients were responsible for a larger share of their drug costs, Madden said. Next year, they will pay the same out-of-pocket rates until they hit the out-of-pocket maximum, she said. (Some people still could pay more than $2,000, if they take medications that their plan doesn’t cover.)
I’m worried about costs. Are there any options for me?
Medicare savings plans may cover premiums and out-of-pocket costs in Part A and B for lower-income people, but people need to apply with their county human services office to qualify, Buckles said. Exact limits vary by program, with the highest level of assistance available to individuals with incomes of less than $1,275 per month and couples with incomes less than $1,724, provided they also have limited assets.
A separate program, called Extra Help, reduces prescription drug costs for individuals with incomes below $22,590 per year and couples with incomes below $30,660. Some people also can qualify for help with drug costs at higher incomes.
Where can I get help?
Generally, you want to avoid calling third party marketing organizations that flood the airways with ads featuring celebrities of a certain age, Madden said. They, like other brokers, can get paid by insurance companies, and may guide callers toward plans that aren’t right for them, she said.
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“If you see Joe Namath or William Shatner… on a commercial, that’s something to steer clear of,” she said.
Colorado, like all states, has a State Health Insurance Assistance Program, mostly staffed by volunteers. Each county has a designated organization with trained navigators to help Medicare recipients think through their options. They don’t receive any commission if you choose a particular plan.
“Our job is to make sure you have the information to make a good decision and sleep good at night,” Buckles said.
If you don’t know who runs the program in your county, you can call 888-696-7213 for direction.
Medicare’s customer assistance line also can assist people, and picks up calls when the SHIP navigators are booked up during the last week of open enrollment, Madden said. Ultimately, people do best when they don’t wait until the end to consider whether they have a cheaper option or one that better fits their needs, she said.
“By then, SHIP is inundated,” she said.
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