Ah, the rituals of fall: The leaves change color. The temperature drops. Sweaters and boots pop out of the closet. And Medicare opens the doors for beneficiaries to shop for Part D and Advantage plans. As you cozy up to the first fire of the season, now is the time to peruse your options to see if you can find a better deal than your current Medicare coverage.
You get about two months to shop. The window opens October 15 and closes December 7. During open enrollment, beneficiaries can choose to switch Part D prescription-drug plans; switch Advantage plans, which offer health coverage through private insurers; or switch from traditional Medicare to Medicare Advantage. New coverage starts January 1, 2018.
Even if you’re happy with your current plan, it can pay to shop around. “Your plan may have been best for 2017, but maybe not for 2018,” says Christina Reeg, director of the Ohio Senior Health Insurance Information Program, based in Columbus, Ohio. Part D and Advantage plans can change their coverage rules from one year to the next, or a change in the prescription drugs you take could make another plan a better deal. A plan better suited to your needs next year could potentially save you hundreds or thousands of dollars.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Your first order of business: Watch your mailbox for your current plan’s Annual Notice of Change. It should have arrived around the end of September and will indicate any 2018 changes to the cost and coverage of your current plan. Pay particular attention to changes to drug formularies, drug tiers and co-pays that affect drugs you take. For instance, “a drug in a lower tier with a $5 co-pay might be shifted to a different tier with a $10 co-pay or $20 co-pay,” says Brandy Bauer, communications manager for the National Council on Aging’s Center for Benefits Access. “Those costs can add up over time.” Use the information about your current plan’s changes to help you compare plans.
By October 1, Medicare releases details about 2018 plans. You can then fire up the Medicare Plan Finder at Medicare.gov to start shopping. Type in your zip code, the drugs you take and the dosages. The online tool will calculate your total costs (premiums plus out-of-pocket costs for your drugs) for each plan in your area.
Keep in mind that choosing a Medicare plan is an individual decision, says Reeg. Married couples don’t have to sign up for the same plan. Two spouses with very different health situations may find traditional Medicare is appropriate for one spouse while the other is better off with a Medicare Advantage plan.
If you need help, contact your state health insurance assistance program, or SHIP. “SHIP helps people navigate the complexities of Medicare,” says Ginny Paulson, director of the SHIP National Technical Assistance Center. Go to Shiptacenter.org or call 877-839-2675 to find local contacts. SHIP’s services are free, and you can get customized help over the phone or make an appointment for in-person assistance. This government-funded program ensures that beneficiaries get objective help in understanding Medicare rules and assistance in navigating Medicare’s online tools.
“Open enrollment is by far the busiest time of year,” says Reeg. “We have 2.2 million beneficiaries [in Ohio] and we encourage all of them to review health and drug plans for 2018.” SHIPs can’t tell you what plan to choose, but they can help you understand your options. Have information about your drugs, pharmacies and doctors handy so SHIP experts can better help you sort through your plan choices.
Shop With Care
When weighing your options, Reeg says the three C’s are critical: costs, coverage and convenience. These three can intertwine. You may prefer to pick up your prescriptions at your local pharmacy, for instance, but getting prescriptions by mail could be cheaper.
You may also run into plans that use step therapy. “You may have to try a generic first before you can go to a brand-name drug,” says Bauer. “If you know you need a brand-name drug, look at plans that don’t have those hoops.” But if you can take generics instead of brand-name drugs, it’s one way to cut costs. Use an online drug costs calculator to compare prices.
Consider out-of-pocket drug costs as well as monthly premiums. “It’s always a trade-off—low premiums versus greater out-of-pocket costs,” says Alan Mittermaier, president of HealthMetrix Research, in Columbus, Ohio. The nitty-gritty of shopping for Part D “comes down to co-pays, particularly for retail pharmacy networks,” he says. “Ninety-day mail order co-pays are pretty close between plans.”
Some good news on the cost front: The Centers for Medicare and Medicaid Services expects the average basic premium for a Part D prescription-drug plan will decline to an estimated $33.50 per month in 2018, down $1.20 from the average 2017 monthly premium of $34.70. And the standard Part D deductible is increasing by only $5, to $405, for 2018.
The limits for falling into the dreaded “doughnut hole” coverage gap also increase for 2018, by $50 both before and after hitting the gap. After the deductible, you pay co-payments or co-insurance until drug costs reach $3,750 (including your share and the insurer’s share). In the gap, you pick up drug costs. After out-of-pocket costs reach $5,000, you pay only 5% of your drug costs.
Under the current health law, the coverage gap continues to shrink in 2018. “There will be less out-of-pocket burden next year,” says Mittermaier. In 2018, the discount on brand-name drugs while in the gap will be 65%, up from 60% in 2017, and the discount on generics will be 56%, up from 49% this year.
If you hit the doughnut hole this year, take a close look at how your drugs are covered, says Bauer. A different plan might help you avoid it next year.
People shopping for Medicare Advantage plans need to pay attention not only to drug costs and coverage but also to provider networks. Unlike traditional Medicare, Advantage plans have limited provider networks—and some networks are narrower than others. If you have certain doctors you like to see, check if their services will be covered—and what your costs would be if they aren’t in a particular plan’s network.
Also, some Advantage plans offer coverage that traditional Medicare doesn’t, such as for vision and dental care or hearing aids. Compare those extras.
Mittermaier’s firm compares costs for Advantage plans. Check out the review of 2018 plans at Medicarenewswatch.com.
-
10 Inefficiencies I Look for on Rich Retirees' Tax ReturnsYour tax return could hold clues to several missed opportunities and important gaps in your retirement planning.
-
Estate Planning: How Does the Basis Step-Up Rule Work?The step-up in basis, one of the most powerful tools in estate and tax planning, can make a huge difference in capital gains taxes owed.
-
457 Plan Contribution Limits for 2025Retirement plans There are higher 457 plan contribution limits for state and local government workers in 2025 than in 2024.
-
Medicare Basics: 11 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
Six of the Worst Assets to Inheritinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2024 and 2025SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 in 2024 and $70,000 in 2025..
-
Roth IRA Contribution Limits for 2024 and 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
SIMPLE IRA Contribution Limits for 2024 and 2025simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2025retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
