Medicare Open Enrollment: Reviewing Your Coverage Options

Medicare’s annual open enrollment period begins on October 15, and it's crucial for recipients to take this opportunity to review their coverage options. Medicare plans can change from year to year, leading to fluctuations in monthly premiums, changes in network doctors for Medicare Advantage plans, and modifications in drug coverage. In fact, a report from GoodRx Research revealed that enrolling in the wrong Medicare Part D plan can cost members over $800 a year.

Taking Advantage of Open Enrollment

Comparing Your Options

Surprisingly, less than a third of Medicare beneficiaries compared their current Medicare plan with other plans available in their area during the 2020 open enrollment period, according to a KFF study. To ensure you make an informed decision, you can easily compare plans online using the Plan Finder tool found on medicare.gov. If you require assistance, unbiased guidance is available through State Health Insurance Assistance Programs.

Exploring Medicare Advantage

Medicare Advantage, also known as Part C, is a popular choice with approximately half of Medicare recipients enrolled in these plans. This rapidly growing program provides care managed by private health insurers that have a contract with the government to offer both Part A hospital coverage and Part B outpatient coverage. Most Medicare Advantage plans also include drug coverage and may even offer additional benefits not found in original Medicare, such as limited dental care and special perks for pets.

According to the Centers for Medicare and Medicaid Services, the projected average premium for Medicare Advantage plans in 2024 is $18.50 per month.

Understanding Network Participation

It's important to note that many Medicare Advantage plans are Health Maintenance Organizations (HMOs) with narrow networks of participating doctors and hospitals. To avoid any surprises, it is recommended to call your doctor's office directly and confirm their participation in your chosen Medicare Advantage plan, advises Jenny Chumbley Hogue, an analyst with medicareresources.org.

Understanding the Transition from Medicare Advantage to Original Medicare and Medigap

If you're considering making the switch from Medicare Advantage to original Medicare and purchasing a Medigap supplement plan, there are a few things you need to keep in mind. Medigap policies are medically underwritten, meaning that insurance companies will review your medical records when you apply. Based on your health status, they may charge you more for coverage or even deny you coverage altogether. However, it's important to note that certain circumstances and a handful of states have different rules regarding this matter.

It's a common misconception among beneficiaries that Medigap plans participate in open enrollment. However, most individuals are not guaranteed the ability to purchase coverage during this time. While you can always switch back to original Medicare, it's crucial to understand that without supplemental coverage, you'll be responsible for approximately 20% of your care costs, with no out-of-pocket cap in place.

Additionally, many individuals on original Medicare choose to purchase a stand-alone Part D drug plan. According to the Centers for Medicare and Medicaid Services, the average total Part D premium is projected to be around $55.50 in 2024. However, premiums are just one component of your total cost. By utilizing Medicare’s plan finder tool and inputting your medications, you can get an estimate of your overall costs, including copayments and coinsurance. It's essential to consider the full picture and compare prices among different local pharmacies, as costs can vary significantly.

There is some good news for individuals with high drug costs in the coming year. Under the Inflation Reduction Act, patient responsibility during the catastrophic coverage phase will drop from 5% to zero. However, one of the most eagerly anticipated changes—the implementation of a $2,000 annual cap on out-of-pocket medication costs—will not take effect until 2025.