Medicare Open Enrollment
Medicare open enrollment begins on October 15th and ends on December 7th. Medicare beneficiaries should take time to do a thorough review of all plans available in 2016. Many plans have large premium increases for 2016 and some as much as 8%! If you do nothing then you could easily be paying more than you should. Below are some points you should consider when deciding which plan is best for you in 2016.
For your Medicare coverage, you have two main choices:
With Original Medicare you will want to add a Medicare Supplemental (Medigap) plan and a Part D Prescription Drug Plan. This option is best if you want to pay a set monthly premium and have little or no out-of-pocket cost throughout the year for medical. You will have copays/deductibles with all Part D prescription plans. It is advantageous for people to choose this type of coverage when they travel outside of Alabama and for people who want to choose their doctors without needing referrals or being restricted to doctors within a plan network
Medicare Advantage Plan
With Medicare Advantage Plans you combine Part A, Part B and usually Part D coverage and these plans act as a HMO or PPO. Depending on what plans are offered in your area you can have the choice of a plan with no or very low premiums. With Medicare Advantage plans you share the costs of your medical and prescription care. For example, you will have doctor copays and deductibles each time you see your physician or go to the hospital. Each plan has a different maximum out-of-pocket cost so you should carefully compare the Advantage Plans available in your area for the amount you would pay for copays, deductibles and annual maximums. You also need to check with your physician to ensure he/she accepts your plan. These plans are best if you are healthy and rarely visit the doctor and you are comfortable knowing you’ll share the costs of all doctor and hospital visits.
Prescription Drug (Part D) Planning
If you are choosing a stand-alone drug plan with original Medicare then be sure to carefully review your prescriptions and choose the best plan that matches your needs. Be aware of each plan’s preferred pharmacies where drug pricing can be much lower than non-preferred pharmacy pricing. The most expensive plan does not mean it will be the best plan for you. Be careful when identifying whether you take the brand or generic prescription drug because this can make a significant difference in your drug costs. You can ask your pharmacist or physician for this information. Some individuals have saved $25 to $50 per month just on their Part D premium by switching to a plan that best fits their needs. But that’s only part of the story… having the wrong plan could cost you thousands in out of pocket drug costs.
If you are unsatisfied with the plan you choose for 2016, Medicare has one option to switch plans outside of the open enrollment period, limited to one change per year. It is called the 5-Star Special Enrollment Period. Medicare uses information from member satisfaction surveys, plans and healthcare providers to give overall performance star ratings to plans. Plans are rated from 1 star to 5 stars. A 5-star rating is considered excellent. The 5-Star Special Enrollment Period allows you to change to a 5-star plan from December 8th of the current year to November 30th of the next year. You must have a 5-star plan available in your area to be eligible for a change during the 5-Star Special Enrollment Period. You can see the plans and ratings atwww.medicare.gov/find-a-plan.
You can save thousands of dollars per year in some cases by carefully choosing plans based on your specific health and financial situation. Your best research tool is Medicare’s website www.medicare.gov where you can input your personal data and they’ll help analyze which plan is best for you.
Kimberly Reynolds, MS, CFP®, is a partner at The Welch Group and has special expertise in the area of Medicare and Social Security benefits and serves as a guest writer for this post.