Open Medicare enrollment begins today. Here’s what you need to know.
Medicare’s open enrollment period arrives predictably each fall, covering beneficiaries in advertisements. While it’s not necessary to review everything, it’s worth reviewing your coverage and making sure it still meets your needs.
From Oct. 15 through Dec. 7, the approximately 65 million Medicare beneficiaries can choose a new Medicare Part D drug plan, a new Medicare Advantage plan, or switch from Original Medicare to a Medicare Advantage plan or vice versa. Any coverage changes made during this period will become effective on January 1, 2023.
Amid all the marketing mail, it can be easy to miss important notifications from your plan, said Louise Norris, health policy analyst for Medicaresources.org. The Annual Notice of Change informs beneficiaries of any changes to your coverage that will take effect for the following year, such as how Part D covers drugs. These notifications are coming out in September, so if you haven’t received yours yet, reach out to your plan. You can use it to help you decide if you want to keep your current coverage.
The benefit adjustments to individual plans are separate from the changes coming to Medicare next year as part of the Cut Inflation Act of 2022. These new policies, like the $35 monthly cap on certain medical costs. insulin, apply to all recipients, regardless of where you re-enrolled.
Medicare’s online plan finder can help you find plans in your area. If you do nothing, you will automatically be re-enrolled to your current coverage. Here are some considerations for reviewing your coverage:
Benefit of Medicare
Nearly half of all Medicare beneficiaries are enrolled in Medicare Advantage, an alternative to original Medicare. Also known as Part C, it offers care managed by private health insurers, such as Aetna and UnitedHealthcare, who contract with the government to provide Part A hospital coverage and Part A outpatient coverage. B.
The average expected premium for Medicare Advantage plans in 2023 is $18 per month, down nearly 8% from the average premium of $19.52 this year, according to the Centers for Medicare and Medicaid Services. Many Medicare Advantage plans do not charge a premium (most enrollees still pay the standard Part B premium, which will also drop next year).
Most Medicare Advantage plans include drug coverage. A growing number of them cover benefits that the original health insurance does not cover, such as limited dental and vision care and even gym memberships. This often makes Medicare Advantage more cost effective than original Medicare, at least on a premium basis.
However, with these lower costs and expanded benefits come a trade-off: Many Medicare Advantage plans are HMOs with tight networks of participating doctors and hospitals. For this reason, they may not be suitable for snowbirds who split their time between states or those who need access to specific specialists. With Original Medicare, you can see any doctor in the country who accepts Medicare.
Changes to Medicare Advantage provider networks may not be included in the annual Notice of Change. You can check your plan’s website or Medicare.gov to see if your doctors participate in the plans you’re considering. Be sure to check not just the doctor’s name, but where you see the doctor, said Ari Parker, chief Medicare advisor at Chapter, an online Medicare insurance broker and author of It’s not that hard, a guide to the program. Sometimes doctors see patients in more than one location, and one will network but not the other, he noted.
When choosing a Medicare Advantage plan, many beneficiaries prioritize ancillary benefits, Parker said. Instead, put your general health needs first, he advised. “People over-optimize for dental care, but if there’s a very small network of doctors, you won’t be happy if you need care,” Parker said.
If you want to switch from Medicare Advantage to Original Medicare and buy a Medigap supplement plan, keep in mind that Medigap policies are medically underwritten, except in certain circumstances and a handful of states that have different rules. This means that insurance companies look at your medical records when you apply and may deny you coverage based on your medical condition. Serious conditions like cancer could make it very difficult to qualify for Medigap coverage.
Medicare Advantage often appeals to healthy beneficiaries. But if you receive an unexpected diagnosis and decide to switch from Medicare Advantage to Original Medicare plus a Medigap plan for more comprehensive coverage, then the reason you want to switch – a change for the worse in your condition – could be the the very thing that prevents you from doing so. Speak to a knowledgeable insurance broker or apply directly to the Medigap plan of your choice before dropping your Medicare Advantage coverage.
If you are denied Medigap coverage, you can still switch back to Original Medicare, but your costs will not be capped. Beneficiaries with only original health insurance are responsible for approximately 20% of their care costs, with no out-of-pocket maximum. Medigap fills gaps in Medicare coverage for a predictable monthly premium.
Medicare Part D
Many people with original Medicare purchase a standalone Part D drug plan to help cover their drug costs. The average base monthly premium for standard Part D coverage is expected to be $31.50 in 2023, up from $32.08 in 2022.
However, premiums are only one component of your total costs. If you enter your medications into Medicare’s plan search tool, it will show you your estimated total costs, which include copayments and coinsurance. Some plans may have a higher premium but better coverage of your prescriptions than a lower premium plan, so it’s important to look at the bigger picture.
You will want to check how your plan covers your medications. Each plan establishes its own formulary or list of covered drugs. Also be careful where you fill your prescriptions. You will generally find the lowest costs if you stick to the preferred network pharmacies in your plan. Drug plans are different enough that partners won’t coordinate their coverage, Parker said (unless they have the exact same prescriptions). It’s likely that the Part D plan that works best for one member of the couple won’t be the best option for the other.
There’s good news next year for recipients who take insulin: The Cut Inflation Act caps the monthly costs of insulin covered by Part D at $35 starting at next year. (Because this is a new benefit, the $35 cap may not be reflected in your estimated total costs under Plan Finder, Medicare note.) Make sure your plan covers the type of insulin you take .
One of Medicare’s most anticipated changes to the Cut Inflation Act won’t come into effect until 2025. That’s when prescription drug costs for beneficiaries will be capped at $2,000 per year, indexed to inflation. Currently, there is no cap on beneficiary spending. For 2023, once you reach $7,400 in total drug expenses for the year, you enter the catastrophic level of coverage and are responsible for approximately 5% of total costs.
The “doughnut hole” — an intermediate phase of coverage where Medicare paid nothing for drug costs — has been closed, but beneficiary costs still change based on how much you spent for the year. Starting in 2024, costs for catastrophic recipients will drop to $0.
Write to Elizabeth O’Brien at [email protected]