If you’re enrolled in Medicare but worry about the cost of health care, your chance to do something about it is right around the corner.
Most people enroll in Medicare when they become eligible at age 65. But every fall, they have the opportunity to change their coverage during an enrollment season that runs from Oct. 15 through Dec. 7. This is the time of year when you can switch between original fee-for-service Medicare and Medicare Advantage, the all-in-one managed care alternative to the traditional program. You also can re-evaluate your prescription drug coverage — whether that is a stand-alone Part D plan, or wrapped into an Advantage plan.
It’s a good idea to do a checkup on your coverage, even if you are happy with your current choices. Prescription drug plans often revise their lists of covered drugs, the rules under which they will be covered and their cost sharing. If you’re enrolled in an Advantage plan, it’s a good time to determine if your health care providers will be in your plan during the coming year, and whether a move to original Medicare makes sense.
Yet few Medicare enrollees take advantage of fall enrollment. For example, research by the Kaiser Family Foundation found that just 11 percent of Medicare Advantage enrollees voluntarily switch plans each year. Another study, conducted in 2013 by the foundation, found that 13 percent of Part D enrollees switch voluntarily. Yet nearly half (46 percent) of those who did switch plans cut their premiums at least 5 percent the following year.
“People are well aware that they should shop and compare, but it’s a lot of work,” says Tricia Neuman, director of the Kaiser foundation’s program on Medicare policy. “And they are not confident they’ll be able to choose a plan that provides better value.”
Fall enrollment provides the opportunity to make sure you’re getting the best-fit coverage and to save some money on premiums and other out-of-pocket costs.
Original or Advantage?
The most basic Medicare enrollment decision is whether to use original fee-for-service Medicare or an Advantage plan. Most of the 64 million people enrolled in Medicare this year use the original program, but 34 percent are in Advantage plans, Kaiser reports.
Advantage plans often include extra benefits, including some level of dental, vision or hearing services, and gym memberships. This year, most Advantage enrollees (88 percent) are in plans that include drug coverage, and more than half of them (56 percent) pay no additional drug premium beyond their Part B premium, according to Kaiser.
The trade-off is that Advantage enrollees must use health care providers within their networks, or pay more for out-of-network services.
Enrollees in original Medicare have access to a much wider range of providers, and they do not need to navigate the referral requirements and prior authorization steps used by many Advantage plans.
Many enrollees in original Medicare buy supplemental Medigap policies to cover their out-of-pocket expenses. These can be significant. There’s no annual limit on what you pay out of pocket; Part A (hospitalization) has a deductible this year of $1,364 for each episode of illness, plus fixed daily costs for extended stays. Part B (outpatient care) covers 80 percent after you meet the annual deductible ($185 this year). Users of the original program usually also buy a prescription drug plan, with premiums averaging just over $33 a month this year.
But original Medicare can be less expensive for enrollees who encounter a serious illness and use a lot of services. That is because the annual premiums for Medigap, which cover nearly all cost-sharing requirements in Medicare Part A and B, usually are lower than the out-of-pocket limit found in Advantage plans.
Advantage plans are required to cap total out-of-pocket spending — the average among all plans this year for enrollees in H.M.O. or PPO plans is $5,059 for in-network services, according to Kaiser; the average limit rises to $8,818 when Advantage PPO enrollees use out-of-network services.
Medigap premiums, by contrast, vary greatly by region — but often it is possible to cap out-of-pocket costs at a lower level than what is available in Advantage plans. In New York City this year, Medigap Plan G plans, among the most comprehensive options, range in cost annually from $2,640 to $5,460, according to Medicare data. But in Nashville, Tenn., the same plans carry premiums ranging from $1,044 to $2,580.
“It’s important to look at the doctors and hospitals in the network,” Ms. Neuman said. “Many people are less likely to think about this when they first join Medicare, especially if they are relatively healthy. They don’t really consider whether specialists are in network until they do get a serious illness, which may come years after they first go on Medicare.”
Advantage enrollees who think they may want to shift to original Medicare with a Medigap plan should do so while they are still healthy. When you first sign up for Part B, Medicare’s “guaranteed issue” rules forbid Medigap plans from rejecting you, or charging a higher premium, because of any pre-existing conditions. But after that time, Medigap plans in most states are permitted to reject your application or charge higher premiums.
Shopping for plans
Medicare plan searches often begin with the Medicare Plan Finder, the official government website that posts stand-alone prescription drug, Medicare Advantage and Medigap offerings. The plan finder is a tool that allows you to browse plan options that match your medication and health provider needs, along with premiums. But a recent redesign of the plan finder has prompted worries among Medicare consumer advocates and organizations that help enrollees with plan selection.
Several studies had criticized the plan finder for confusing navigation and incomplete or incorrect information. The Centers for Medicare & Medicaid Services aimed to correct these issues with the redesign, and Medicare advocates generally say the new tool is an improvement.
But the new plan finder was rolled out just before Labor Day, leaving little time for Medicare enrollment counselors to be trained and to identify problems before the busy fall enrollment period begins. (Users can choose between the old and new sites until Oct. 15; at that point, only the new site will be available.)
“October 15th is right around the corner, so the lead time has been very short,” said Ann Kayrish, senior program manager for Medicare at the National Council on Aging. Ms. Kayrish provides training to State Health Insurance Assistance Programs, a national network of federally funded programs that provide free Medicare counseling using volunteers.
“SHIPs are struggling to train their volunteers not only on the new plan finder, but also all the changes with Medicare plans for the coming year,” she added.
The new site has shortcomings. After a detailed review, the Medicare Rights Center, an advocacy group, wrote to CMS this month calling for changes that are “urgently needed” before fall enrollment to improve the tool’s accuracy and usability. A key criticism is that the new tool does not allow users to sort plans by total out-of-pocket costs, including premiums but also deductibles, copays and coinsurance payments. That feature was available in the old plan finder.
“There are an overwhelming number of plans available, and our hope is that this new tool will make it easier for people to choose the best plan option with respect to affordability and coverage,” says Frederic Riccardi, president of the Medicare Rights Center. “People are at risk of having to pay more for their drugs or plan by not reviewing their coverage. It concerns me that people pay more than they should or go without their prescription drugs due to plan restrictions.”
CMS declined to comment for this article, but in a posted FAQ about the new site it stated that a cost filter would be added, and that its plan to do so was “on track.”
The plan finder also lacks detailed information on health care providers in Advantage plans. That leaves enrollees the challenging task of reviewing directories provided by individual plan providers.
“Some plans give customers access to online search tools to look up a particular doctor or hospital,” Ms. Neuman said. “Others send out a PDF of a big, fat directory that you can look through.”
Directories often can be outdated or contain errors, studies have found. So it makes sense to ask your doctors and other providers directly if they participate in any plan you are considering.
The new plan finder also does not yet allow users to search for Medicare Advantage plans that will offer new nonmedical services next year.
The Chronic Care Act, approved by Congress last year, permits plans to begin paying for services such as grocery deliveries, caregiver support and retrofitting homes to support older adults with chronic conditions. They also are permitted to expand transportation services, which had been limited to visits to health care providers.
Advantage plans are not required to offer the new services, and they will be available on a very limited basis during 2020. Aetna, for example, expects to offer the expanded transportation services, fall prevention and help with meal preparation in just a few plans next year, said Christopher Ciano, senior vice president of Aetna Medicare.
“We’re still in a test and learning mode,” Mr. Ciano said.
Just as important, joining a plan that offers the new nonmedical benefits does not guarantee that you’ll receive them. The new benefits are targeted to enrollees with serious chronic illnesses or functional limitations, and Advantage plans will determine who qualifies. (Separately, President Trump signed an executive order this week instructing Medicare officials to propose ways to further beef up Advantage offerings and reduce their premiums. The executive order will not affect Advantage plan offerings for 2020.)
For now, the best way to find plans offering the new services is to contact plan providers by phone. But it’s not advisable to drive a plan choice solely by these new benefits, experts caution.
“It’s important to look beyond additional benefits, such as dental coverage or these new nonmedical services,” Mr. Riccardi said. “You need to look at the entire picture — the network of providers and cost-sharing for health services offered by the plan.”
Shopping tips
The choices facing Medicare enrollees are complex, and it makes sense to get some unbiased help. The State Health Insurance Assistance Program provides free one-on-one counseling every year to nearly three million beneficiaries, their families and caregivers. Each state has a SHIP program; use this link to find yours.
The Medicare Rights Center suggests signing up for plans by contacting the program directly at 1-800-MEDICARE. Take detailed notes on your conversation, including the date and the Medicare representative’s name to protect yourself if you encounter any problems with enrollment.