How to navigate Medicare open enrollment season
April might be the cruelest month, but Oct. 15 through Dec. 7 have to be the cruelest days of the year. That’s when Uncle Sam asks millions of Medicare beneficiaries to review and change, if need be, their Medicare health plans and prescription drug coverage for the following year.
Here’s what you need to know to survive this year’s season.
Did you read your ANOC? The Centers for Medicare and Medicaid Services (CMS), the government agency responsible for Medicare, recommends the following: People in a Medicare health or prescription drug plan should always review the materials their plans send them, such as the “Evidence of Coverage” (EOC) and “Annual Notice of Change” (ANOC).
What’s an ANOC? “Your ANOC letter will explain any changes being made to your current plan for the upcoming plan year,” says Stephen Stellhorn, president of MSM Capital Management in Tampa and author of Navigating the Maze of Medicare. “For example, deductibles and/or co-insurance amounts may be increasing, drugs may be changing formulary tiers or benefits may be dropped. If there is no change or the changes are modest, and you’re satisfied with the plan you have, there is nothing else you need to do. Any changes will take effect on Jan. 1, 2016.”
Others agree. “If you are in a Medicare Advantage plan and are happy with it, you don’t have to do anything,” says Kip Piper, president of Health Results Group in Washington, D.C. “Same if you are in traditional Medicare plan and receive your drug benefit from a separate prescription drug plan — if you are happy with it, you may remain.”
Of note, Medicare Advantage plan providers can and do make changes to their plans each year, says Stellhorn. “New plans are introduced while some plans are dropped.”
But even if you’re happy with your current plan, it might be wise to comparison shop. Here are some questions to ask:
Any network provider changes? Is your network provider of physicians, hospitals or ambulatory centers changing? If so, find out whether the physicians, hospitals and medical service providers you use will continue to participate in the plan you have, says Stellhorn. “If not, you may want to consider changing plans just for this reason,” he says. “You don’t want any surprises after Jan. 1, 2016.”
The average American's Medicare drug plan costs: Do you pay too much?
Has your health changed from the prior plan year? Are you using medical services in 2015 that you didn’t use in 2014 and your condition warrants that you continuing using them in 2016? If so, Stellhorn says you might be able to find a plan with lower deductibles than what your current plan offers.
Are you planning any elective surgeries in 2016? “Many plans have co-insurance amounts, which is a percentage of the total cost for outpatient procedures,” says Stellhorn. “Deductibles are a fixed amount. You may be able to find a plan with a deductible. Deductibles are usually a lesser out-of-pocket amount than co-insurance payments.”
Are you taking any new drugs from the prior plan year? Formularies do change each year and drugs within those formularies can change tier levels, says Stellhorn. “A prescription drug in one plan provider’s formulary may be in a lower tier in another provider’s formulary plan,” he says. “You could save yourself hundreds of dollars by switching plans.”
Are you planning extended travel within the United States in 2016? Many Medicare Advantage plans have travel benefits allowing you to use services at in-network costs as opposed to having no coverage or paying out-of-network costs, says Stellhorn. “Check with your plan provider to see if they have travel benefits and in what states and counties they are covered in,” he says.
Budget proposal could mean no 52% jump in Medicare Part B premiums
Can you conduct your own Medicare plan review? For her part, Katy Votava, president of Goodcare.com in Rochester, N.Y., says it’s more important than ever for people to get back to basics with Medicare and do comparison shopping during this year's annual enrollment period.
“Major studies show that 90 to 95% of people in Medicare overspend, particularly on medications, by not selecting the plan that gives them the best coverage,” she says. “Right now everyone with Medicare drug coverage can comparison shop to make sure that they are getting the best coverage at the best price.”
What are some good ways to do that? Use the Medicare.gov website. You can enter medications and it will show you the various plans and pricing available, says Votava. You can also call Medicare directly at 800-633-4227 24 hours/day, seven days a week and talk with a Medicare customer service representative who will take a list of the medications and do the research for you for free.
“Don't assume that you can't do better in terms of pricing and coverage,” says Votava. “You can be in the 5% to 10% of folks who get it right.”
Stellhorn also suggests contacting the various plan providers directly to compare their plans and using an independent agent who may represent several different plan providers.
FYI: “If both spouses are enrolled in plans, depending on their health, they may find it makes economic sense for each of them to use plans from different insurance carriers. You do not need to have the same plan,” says Stellhorn.
Plan on switching? Before you switch plans, make sure all physicians used, hospitals, ambulatory centers and prescription drugs taken will be covered by the new plan, sells Stellhorn. “Make no assumptions about plan benefits and EOC when you decide to switch plans,” he says. “Double-check everything in the Summary of Benefits (SOB) and EOC documents. It could save you lots of aggravation later in 2016.”
Are you stargazing? “When comparing Medicare Advantage plans and stand-alone Part D drug plans, consider their star ratings,” says Piper. “Each plan has a star rating. The more stars the better. It’s an imperfect, incomplete, general measure of health plans and drug plans, but it may be useful. Star ratings are more useful for healthy seniors. For seniors with severe health problems, the star rating is not as accurate in describing a plan’s quality.”
For his part, Piper says Medicare Advantage plans provide, for most seniors, the best deal.
Of note, in 2015, 61% of Medicare Advantage plans are rated from four to five stars in Medicare’s Star Quality Rating, according to a Medicare Rights Center report. This is up from 52% in 2014 and 37% in 2013. Read Medicare Advantage 2015 Spotlight: Enrollment Market Update.
Know where to turn? As you evaluate your Medicare health and drug plan options, consider the following resources:
•The Medicare Rights Center at www.medicarerights.org
•Medicare Interactive at MedicareInteractive.org
•The Kaiser Family Foundation at kff.org
•The Center for Medicare Advocacy at www.medicareadvocacy.org.
•Also, call or visit the website of your State Health Insurance Assistance Program or SHIP at medicare.gov/contacts/#resources/ships. Your SHIP can help you to understand all of your Medicare coverage options.
Robert Powell is editor of Retirement Weekly, contributes regularly to USA TODAY, The Wall Street Journal and MarketWatch. Got questions about money? Email Bob at rpowell@allthingsretirement.com.