If you’re like most Medicare enrollees, you probably aren’t planning to make any changes to your existing coverage for the coming year, but – like most beneficiaries – you should probably at least consider it during Medicare’s open enrollment period.
The annual open enrollment period runs from October 15 to December 7. Any changes you make during this period will take effect on January first.
Planning to stay put?
A Kaiser Family Foundation analysis found that during a four-year study, only about 13 percent of Medicare Part D (prescription drug coverage) enrollees switch plans from one year to the next, and 70 percent remained in the same plan. Similarly, only 11 percent of Medicare Advantage enrollees switched to a different plan from 2013 to 2014, and only 2 percent of Medicare Advantage enrollees opted to switch back to Original Medicare that year.
Clearly, most enrollees are either happy with their coverage – or possibly unaware of the alternatives that are available – or they’re daunted by the process of selecting and enrolling in a different plan.
But as I point out in the examples below, the possibility that your Medicare coverage will be changing in some way – or that there’s new, improved coverage available – makes it well worth your time during open enrollment to compare the options that are available to you for the coming year. You may end up keeping the coverage you already have, but you might very well find that another plan is a better fit for your needs.
Here are four ways you can change your Medicare coverage for next year, keeping in mind that in most cases, your opportunity to actually make the changes will be limited to the October 15-December 7 window this fall.
1. Pick a different Medicare Part D plan
Medicare Part D covers prescription drugs for people who are enrolled in Original Medicare, or in some cases, Medicare Advantage plans that don’t include prescription coverage (90 percent of Medicare Advantage plans have integrated Part D coverage, but stand-alone Part D plans can be purchased to supplement Medicare Advantage plans that don’t include Part D coverage). As of early 2019, more than 25.5 million people were enrolled in stand-alone Part D plans.
During the annual open enrollment period, Part D enrollees have a chance to switch to a different Part D plan, enroll in Medicare Part D for the first time if they didn’t enroll during their initial enrollment period (late enrollment penalties may apply), or drop their Part D coverage altogether.
But what if you already have a Part D plan that you like? You still need to pay attention to the options that are available during open enrollment, and any changes that apply to your current plan for the coming year.
Your plan’s premium will likely change for the coming year, and the benefit design of your plan – including the deductible, copays, and coinsurance – could also be changing. (The maximum allowable deductible for Part D plans generally increases each year, so keep an eye out to see if your plan’s deductible will be increasing.) Your plan’s formulary, and the formularies of the other plans available in your area, could be changing too.
And your own medical circumstances might be different from last year, which is just as much of a consideration. I know this because I’ve seen it firsthand:
My dad’s kidneys failed when he was 54. (You can read his story here.) He’s had Medicare Part D ever since it became available in 2006. For the first several years, he was on dialysis, and numerous accompanying medications, many of which were quite expensive. To cover them, he always selected one of the most expensive Part D plans, because the higher premiums were far offset by the lower prices he had to pay for the medications.
He was fortunate enough to have a successful kidney transplant in 2012, and needs very little in the way of medications now, other than immunosuppressants. (Medicare B covers those for enrollees who are 65+ and had Medicare coverage at the time of the transplant.) So during the open enrollment period following his transplant, he switched to a lower-cost Part D plan, and has maintained coverage ever since in one of the lowest-cost plans available in his area.
The take-away point here is that the plan that worked best for you this year isn’t necessarily the same one that will work best next year. During open enrollment, you can use Medicare’s plan finder tool to compare plans based on the specific prescriptions that you take.
Many Medicare beneficiaries find the shopping process overwhelming, and end up just keeping their existing plan to avoid the hassle. But there are assisters online, over the phone, and in your community who can help you, free of charge. Seek them out if you have questions.
2. Pick a different Medicare Advantage plan
The popularity of Medicare Advantage plans has been growing steadily over the last decade. Thirty-four percent of Medicare beneficiaries were enrolled in Medicare Advantage plans in 2018, up from 13 percent in 2004.
If you’re among the 20.4 million people who have coverage under a Medicare Advantage plan, open enrollment gives you the opportunity to switch to a different Medicare Advantage plan, including switching from one that doesn’t include prescription drug coverage to one that does, or vice versa.
The average premium for Medicare Advantage plans with integrated Part D coverage is about $40/month in 2019 (Medicare Advantage premiums are in addition to Medicare Part B premiums), but premiums can vary from one year to another — for the plan that you have, as well as the other options available in your area. And your benefits and provider network might be changing next year, and the same could be true of the other plans that are available to you.
The plan you have now might have been the best option when you first enrolled, but don’t assume that will always be the case. Take the time to compare the various options during open enrollment.
3. Switch from Medicare Advantage to Original Medicare
What if you’re one of those 20.4 million people on Medicare Advantage and you’ve decided you want to switch to Original Medicare? Open enrollment is an obvious opportunity to do so (along with the Medicare Advantage open enrollment period at the start of the new year).
But if you’re in poor health, you’ll also want to check into the availability of Medigap plans (Medicare supplemental coverage) before making the decision to switch to Original Medicare.
As Wendell Potter explains, people who are switching from Medicare Advantage to Original Medicare are often those who are experiencing serious medical issues. And although you’ve got the right to switch to Original Medicare during open enrollment, you don’t necessarily have access to a Medigap plan without medical underwriting in most states.
There are some exceptions, but this is an area where you’ll want to do your homework before making a decision, as your out-of-pocket costs under Original Medicare (without a Medigap plan) could be significant, depending on your healthcare needs.
4. Switch from Original Medicare to Medicare Advantage
Maybe you’re part of the majority of Medicare beneficiaries who have Original Medicare, but you want to give Medicare Advantage a try. During open enrollment, you can switch to any Medicare Advantage plan available in your area, as long as you don’t have end-stage renal disease (and starting in 2021, even people with end-stage renal disease will have access to all of the available Medicare Advantage plans during open enrollment).
Once you switch, you’ve got a one-year “trial period” during which you can switch back to Original Medicare and still have access to guaranteed-issue Medigap coverage — assuming you had a Medigap plan before you switched to Medicare Advantage and this was your first time switching to a Medicare Advantage plan.
The trial period provision makes it easier to try out Medicare Advantage, but it’s still important to read the fine print before you decide. You may be enticed by a zero-premium plan (keeping in mind that you’ll still have to pay premiums for Medicare Part B), but be sure to account for the scope of the provider network, and the out-of-pocket exposure.
Medicare Advantage plans can have maximum out-of-pocket limits as high as $6,700. (The average out-of-pocket limit in 2018 was $5,187). So keep the big picture in mind when you’re considering possible options for the coming year.
Regardless of the specifics of your situation, you owe it to yourself to check into the options that are available during open enrollment. If the options seem overwhelming, you can talk with an agent licensed to discuss Medicare coverage by calling one of our enrollment partners at 1-855-593-5633.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.