Medicare is the government-run health insurance coverage for people with certain disabilities and conditions and those age 65 and older. Making sense of it isn’t easy. The options read like alphabet soup, including Parts A and B (Original Medicare), Part C (Medicare Advantage), and Part D (prescription drug coverage).
Every year, Medicare beneficiaries have the chance to change coverage during the Medicare Annual Enrollment Period (AEP), which begins October 15 and ends December 7.
“The Medicare AEP is your once-a-year opportunity to focus on yourself and your whole well-being,” says Armando Luna, head of individual Medicare sales and marketing at Aetna. “Choosing the right plan can not only improve your health, but also give you financial and emotional peace of mind. ”
To help you make the most of this year’s Medicare AEP, here are 11 things you need to know.
1. You can switch plans
During AEP, you have the opportunity to join, drop, or switch your Medicare plan or plans.
Depending on your current coverage, you can do the following during AEP:
- If you have or are signing up for Medicare Part A or B, you can join or drop a Part D prescription drug plan.
- If you only have Original Medicare (Parts A and B), you can switch to a Medicare Advantage (Part C) plan.
- If you have a Medicare Advantage plan, you can drop it and switch back to just Original Medicare (Parts A and B). Or you can switch to a new Medicare Advantage plan.
- If you have a Part D prescription drug plan, you can switch to a new Part D prescription drug plan. Or you can choose to drop your drug plan altogether.
- If you have a Medicare Advantage plan, you can drop it and may be able to buy a Medicare Supplement (Medigap) policy, depending on where you live. Medigap helps pay Original Medicare costs. You can call your current plan to see if and when you’re eligible to enroll in a Medigap plan.
Once you’re enrolled, your new coverage will start January 1 of the following year. AEP gives you a time frame of about seven weeks to sign up for the plans you want, so remember to take your time finding the coverage that’s right for you.
2. Parts C and D may cover additional services
More than 19 million people — about 33% of the Medicare population — are enrolled in Medicare Advantage plans (Part C).
These plans allow enrollees to receive both Medicare Parts A and B benefits through a private health insurer, like Aetna, that contracts with Medicare. Plans cover hospitalization, outpatient care, and, often, prescription drug coverage under one plan. Many plans also kick in extra services that Original Medicare doesn’t cover, says Luna. “Some Medicare Advantage plans offer programs to help coordinate your care across a network of health care professionals. They may also offer you additional benefits, such as dental, vision, and fitness benefits.”
In addition to Medicare Advantage plans, Part D plans helps cover the cost of prescription drugs for which Original Medicare alone doesn’t pay.
3. You have until March 31 to make a plan change
In past years, you were able to drop a Medicare Advantage plan and return to Original Medicare during the Medicare Advantage Disenrollment Period (from January 1 to February 14 each year). Effective in 2019, the Medicare Advantage Disenrollment Period will be replaced by the Medicare Advantage Open Enrollment Period, which will take place from January 1 to March 31 every year.
During this time, you can switch to a different Medicare Advantage plan or drop your Medicare Advantage plan and return to Original Medicare.
4. Quality is rewarded
Just like Hollywood blockbusters, Medicare Advantage plans and Part D prescription drug plans have Star Ratings, too. Each year, the Centers for Medicare & Medicaid Services (CMS) rates these plans on a scale of one to five Stars, with one being the lowest rating a plan can receive and five being the highest. These ratings determine how well a plan performs in several different categories, so you’ll want to check out the Star Ratings of the plans you’re interested in.
The CMS also allows for a Special Enrollment Period only for those Medicare Advantage and Part D plans that have earned the top 5-Star Rating. If you choose to sign up for one of these top-rated plans you get extra time — from December 8 through November 30. To encourage Medicare beneficiaries to choose top-rated insurers, anyone can move to a 5-Star Medicare Advantage or Part D prescription drug plan (or a plan that covers both) at any time during this period — but this change can be made just once during this period.
5. Check your medications
If you’re on any medications, it’s important to choose a Medicare plan that will cover their costs. You can check the drug formularies of the plans you’re interested in to see if the medications you need are on the list. Some plans may have restrictions, so it’s important to read through each plan’s drug coverage thoroughly to make sure it’s right for you.
A growing number of plans are also adopting a network pharmacy benefit. That means some pharmacies will be in your plan’s network and others will not. You may pay more at out-of-network pharmacies, so be sure to check that the pharmacies near you participate with your plan.
6. Save on prescription drugs
Many popular brand-name drugs have cheaper generic versions available. Talk to your doctor about whether your medications are among them and if you can make the switch to generics to save money.
PlanPrescriber.com also offers a tool that checks if you have the right drug plan for the medications you are taking.
Starting in 2019, if you hit the prescription-drug “doughnut hole,” or the gap in Part D coverage, the cost of your covered generic medications may change, but your cost for covered brand-name drugs will be limited to 25%, which is same as before the coverage gap. This is because the Bipartisan Budget Act of 2018 eliminated the increase in brand-name drug costs during the gap as of 2019.
7. You should check your doctor’s affiliation
Don’t forget about your doctor when evaluating your plan during annual enrollment. You’ll want to make sure he or she is still accepting your Medicare Advantage plan next year.
“It’s of the utmost importance to understand the need to stay in-network when you have a Medicare Advantage plan,” says Luna. “If you receive services from a doctor who’s not in your plan’s network, the cost will differ —in some cases, significantly — and you may end up with cost-sharing responsibilities.”
Need another reason to stay in network? You may get better care. “Medicare Advantage plans strive to select in-network providers who offer high-quality services and care to help your health and well-being,” he says.
If your doctor is out of network, you’ll either have to choose a new health care provider or be on the hook for higher out-of-pocket costs to stay with the doctor you have.
8. Many preventive services are now provided at no extra cost
The Affordable Care Act has made many more preventive medical services available at no extra cost. That means you can get yearly wellness visits, diabetes screenings, and cancer screenings, among other things, without paying a copay, deductible, or coinsurance.
If you have a Medicare Advantage plan, you should also check with your insurer to confirm what’s covered. “You’ll want to know what preventive services are covered by your plan so you can activate those services to benefit and improve your health,” says Luna.
9. Decision-making tools can help
Online tools designed to help people sort through the many Medicare plan choices can be used when choosing a plan.
You can find and compare Medicare Advantage and prescription-drug plans available in your area by inputting your ZIP code on the Plan Finder tool at Medicare.gov. You can also compare and purchase plans at PlanPrescriber.com.
10. You should review your options
If you’re looking to switch plans, you’ll want to consider how much a certain plan will cost you, so you’ll know if it fits your budget. You’ll also want to choose a plan that offers the coverage you need when and where you need it. This means looking at what’s covered from care and location perspectives. Check the plan’s network to make sure the doctors, hospitals, and pharmacies you use are included. Going out of network for care can cost you more money, so this is important to think about when you’re shopping for a new plan.
Plans can change significantly from year to year, so even if you’re happy with your current plan, make sure it still meets your needs. If it does, you don’t need to do anything.
11. Do your homework
The Medicare AEP gives you the chance to find the best coverage for you. So, don’t miss your opportunity! Carefully consider what’s important to you, then do the research necessary to find a plan that fits your needs.
“This is the time of year to put yourself and your health first,” says Luna.
The right Medicare coverage can make all the difference in not just your health, but your whole well-being. So be sure to make the changes you want before AEP ends on December 7. Otherwise, your coverage may have to stay the same for another year.