Once you have enrolled in Medicare, you have two main time frames during which you can change your Medicare coverage: during the Medicare Annual Enrollment Period (AEP) that runs from October 15 through December 7, and during the Medicare Advantage Open Enrollment Period that runs from January 1 to March 31 each year. You should consider the following important factors when weighing different Medicare coverage options.
The Cost of Your Medicare Benefits Plan
The monthly premiums and annual deductibles for your Medicare plan will likely change over time, regardless of how you obtain your Medicare coverage. While Original Medicare coverage (Part A and Part B) generally remains the same (though Part B costs typically increase year over year), additional benefits offered under Part D Prescription Drug plans, Medicare Advantage plans and Medicare Supplement plans can and do change. These changes may or may not favor your needs, but either way, the expansion or loss of benefits or coverage will likely affect your overall plan costs. Ideally, when you first enroll in Medicare, you should find a plan that fits your needs while keeping the total out-of-pocket costs, expenses such as monthly premiums, deductibles and copayments, within your budget.
For those enrolled in a Medicare Advantage plan, you should also be aware that your out-of-pocket maximum is subject to change annually. For covered care and services, the maximum out-of-pocket established by CMS is $6,700 in 2020 and has been increased to $7,550 for 2021. However, you will find plans in your area that will offer a lower maximum out-of-pocket to help in managing your Medicare expenses. The out-of-pocket maximum is a key consideration when changing Medicare coverage because it impacts the overall cost of the Medicare plan.
When you experience changes to your Medicare benefits in the form of higher monthly premiums, yearly deductibles or annual OOP maximum limit, you should review your plan and others available in your local service area.
Do You Have Other Coverage?
If you’re enrolled in other healthcare plans besides Medicare, consider if they will be affected when you change your Medicare coverage. Your Medicare coverage may overlap with your other health plan benefits, for instance, your employer’s healthcare plan. You must maintain creditable coverage (meaning it’s equal or superior to the coverage offered under Medicare) or face penalties from gaps in coverage. Before making changes to your Medicare plan, it’s important to consider if you will still maintain necessary coverage under both your new Medicare plan and your other healthcare plan.
Choice of Doctors, Hospitals and Pharmacies
Unlike Original Medicare, most Medicare Advantage plans offer covered services and care through networks of specific providers, i.e. hospitals, pharmacies, doctors and more. Before switching to a different plan, confirm that your primary doctor or any medical specialists you see are part of your new Medicare Advantage plan’s network. It’s recommended to choose the plan that accommodates the healthcare providers of your choice, which is often a matter of convenience as much as it is a preference. One benefit of changing plans can be an increase in accessing local healthcare providers.
Your Prescription Drugs
If managing your health conditions requires prescription drugs, you must consider how a new plan will cover some portion of the costs of your prescription medications. Medicare Advantage plans provide the same Part D coverage. However some Medicare Advantage plans offer more comprehensive coverage in the donut hole coverage gap, resulting in higher premiums for this enhanced benefit. With limited opportunities (AEP and an applicable SEP) to adjust your coverage or change your plan during the calendar year, you want to ensure your plan covers the prescription medications you need. In addition, formularies tend to change annually. Therefore it’s extremely important to check the formularies of your existing plan as well as any plans you may be interested in to ensure your medications are covered under the plan benefits. You should also check how these medications are covered by researching the tier level and associated copayment or coinsurance.
Changing Medical Needs
In the unfortunate event you are anticipating a major surgery, start needing additional benefits or are facing upcoming health challenges, this is a good time to evaluate your Medicare benefits. Making sure your current plan, or any plan you are considering, will provide you access to the care you seek at an affordable cost is paramount in making any decision to change plans. In such a case, switching to a Medicare Advantage plan or a Medicare Supplement plan that will be more inclusive and accommodating of your changing healthcare needs could be a beneficial decision.
Some Americans will stick with Original Medicare, year after year, despite the changes taking place in their healthcare needs and plan benefits. Many beneficiaries are unaware of their coverage options or the advantages to evaluating their Medicare coverage annually to determine if a plan change may be beneficial. This is to their detriment because there may be changes to coverage and costs that have a negative impact. These changes can include increases in premiums, copayments and deductibles as well as the reduction or removal of benefits.
For those currently enrolled in a Medicare Advantage plan, you will be notified of any changes on your plan through an Annual Notice of Changes (ANOC) every September. After reviewing the changes, you may be inclined to look at your options to evaluate the best fit for the upcoming Medicare plan year. It’s important to be aware of and fully understand the annual changes made to your plan and evaluate your alternative options during the Annual Enrollment Period from October 15 through December 7 every year. For local assistance evaluating your coverage and for information on available plans, contact our team of licensed Medicare insurance agents at Medicare Portal today.