The federal health insurance program for people 65 and older has significant financial implications; the premiums alone can run thousands of dollars a year. Enrollees also have to sort through a maze of Medicare, Medicare Advantage, prescription drug coverage and Medigap offerings with regard to their particular health risks.
“It’s important to re-shop each year between Oct. 15 and Dec. 7,” said Ayse Tokbay, program manager with the State Health Insurance Assistance Program in Howard County, Md.
Seniors should explore their options even if they’re happy with their current plan, she said, because plans and options are constantly changing. Some plans can change dramatically year to year.
One popular drug plan more than doubled its monthly premiums, she noted. Another one dropped its premium nearly $4 but raised its deductible from zero to $395.
“You can’t always listen to friends or family who tell you one company is better than another,” Tokbay said. “You have to look at the details. You have to look under the hood. Do the math.”
For instance, she said, medication costs are driven primarily by the combination of the prescriptions you take and the pharmacy you use.
“Your well-meaning friend could be taking a low-tier, low-cost drug and doesn’t know how your drugs will be priced in all of the 20-plus plans offered through Medicare Part D,” Tokbay said. “The only way to know is to perform a personalized drug search through you using Medicare.gov’s Plan Finder tool or call 1-800-MEDICARE.”
To help with that task, Tokbay said, Medicare redesigned its Plan Finder tool so it can be linked to MyMedicare.gov. Once you have given yourself a username and password, Plan Finder can be used to compare drug plans.
Remember, she cautioned, Medicare plans can change from year to year. They can change their names, their monthly premiums and even their co-pays or deductibles.
“The first thing you want to look at is your monthly premium,” Tokbay said. “Plans can lower the cost, which is great. But it’s not uncommon to see some plans double their monthly premium or even a slow creep from year to year. A couple of insurers changed their plan name for 2020, flat-out doubled the premium and then opened a new plan with lower rate for 2020.”
If you are in what is commonly known as a Medigap plan — a Medicare supplemental policy — you don’t have to worry about the enrollment period. You can shop around for a supplemental policy anytime of the year. But note the fine print.
Unless you have a “guaranteed issue,” which is a special window that requires companies to sell you a policy at their best rate, you will be subject to medical underwriting, Tokbay said.
This means a company can ask about your medical history, prescriptions and/or require that you take a physical to determine whether to sell you a policy and set your premium accordingly, she said. If you are going to shop around, don’t cancel your current Medigap until you’ve been approved for a new policy.
It’s also important to note that open enrollment is the only window you have to go from original Medicare into another health-care path known as Medicare Advantage.
Medicare Advantage comes in all shapes and sizes, with some allowing additional benefits such as dental and vision that can seem very attractive. However, Tokbay said, Advantage plans come with their own sets of pricing, rules and physician networks that can become very inconvenient if you join without doing your homework.
“One path is not necessarily better than the other,” she said. “There is just always a trade-off. For instance, if you have doctors and providers you want to continue to see, you have to check to make sure they are in your Advantage network or you might have to pay for those services out-of-pocket and they could be a lot higher than what you could have paid staying with original Medicare.”
Tokbay said “the things that dazzle some people about Advantage plans is a lower monthly premium. But they don’t look under the hood. And they sometimes call me down the road when they are sick and cannot afford the co-pays.”