Medicare Open Enrollment: Shop for a Better Deal on Plans

If you've ever been to a restaurant with a long and bewildering menu, you know it can be tough to find appealing options that fit your budget. That’s the challenge that seniors face this fall as they peruse Medicare coverage options that are more confusing than ever.

From October 15 through December 7, Medicare beneficiaries have an opportunity to change their health and prescription-drug plans for the coming year. And this year’s open enrollment period comes with a lot of new wrinkles. Prescription-drug coverage is changing, for example, and people shopping for Medicare Advantage plans may see a proliferation of plans and some new benefits. More options “will make for more difficult and more confusing choices for the average beneficiary,” says Ann Kayrish, senior program manager for Medicare at the National Council on Aging’s Center for Benefits Access.

Even if you’re happy with your current coverage, you should shop around to make sure you are getting the best deal. Changes in your health conditions, doctors and prescriptions may mean that your current plan is no longer the most cost-effective choice. And plans themselves can change each year, tweaking drug coverage, provider networks and costs for enrollees.

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Here’s how to get a handle on your 2019 Medicare options and find the coverage that’s best for your health—and your wallet.

Preparing for Medicare Open Enrollment

Start by making a list of medications, pharmacies, doctors and other health care providers you use. If you have traditional Medicare, review the latest Medicare & You handbook to understand your 2019 costs and benefits. (The handbook should have been mailed to you in late September—you can also find it at medicare.gov.) Enrollees in Part D prescription-drug or Medicare Advantage plans should watch their mailboxes for notices of 2019 plan changes, which these plans will send out before open enrollment begins.

No matter how you currently receive Medicare benefits, review your two basic options for coverage: traditional Medicare and Medicare Advantage. With traditional Medicare, you typically get Part A hospital coverage and Part B, which covers doctor visits and other outpatient care. You can add on a Part D prescription-drug plan and possibly a Medigap policy to help cover out-of-pocket costs. Traditional Medicare beneficiaries can go to any doctor or hospital in the U.S. that accepts Medicare and don’t need referrals to see specialists or prior authorization for services.

Medicare Advantage plans, sold by private insurers, offer the same Part A and Part B benefits that you get in traditional Medicare. Most include prescription-drug coverage, and some also offer dental and vision care. But rather than having a choice of any Medicare provider, you generally must stick to the doctors and hospitals that are included in your plan’s network, and you may need referrals and prior authorizations before seeing specialists and obtaining services.

Although open enrollment offers an opportunity to switch between the two basic types of coverage, there’s a potential snag for Advantage enrollees who want to move to traditional Medicare: The ability to get a Medigap policy to help cover their out-of-pocket costs. Under federal law, insurers must sell you a Medigap policy only during the first six-month period when you are both 65 or older and enrolled in Part B and in certain other limited circumstances. At other times, you may be charged more based on your health status or denied coverage altogether. (We’ll cover the issues of accessing Medigap—and tips on comparing these policies—in a future article.)

You can shop for Part D drug plans and Advantage plans using the Medicare Plan Finder tool at medicare.gov/find-a-plan. Information on 2019 plans should be available in early October, but don’t make any final coverage decisions before mid October, says Aaron Tidball, manager of health care insurance services at Allsup. Plans can review and update their information during the first two weeks of October, and they may change quite a bit during that time, he says.

Medicare Part D Prescription Drug Plans

You may be able to save a bundle on your drugs for the coming year—if you delve into the details when comparing Part D plans.

Start by watching for notices from your drug plan highlighting any changes that will take effect January 1 and your 2019 costs and benefits. Look at your deductible, co-payments and pharmacies that are in the plan’s network. Make sure your drugs are covered by the plan, and look at how they are covered. Drug plans typically assign each drug a “tier,” and each tier has different costs. If you take a pricey drug that has moved to a higher tier, for example, you may have to pay 25% of the total cost in 2019, instead of a flat $25 co-payment in 2018. Also look at the coverage rules: If you see the words “prior authorization,” you’ll have to get the plan’s approval before it will cover that drug.

Compare your coverage against competing options on Medicare’s Plan Finder. You may be shocked by the variation in out-of-pocket costs among plans. Diane Omdahl, president of 65 Incorporated, a firm that helps seniors navigate Medicare, recently worked with a client whose brand-name medication could cost him from $29 to more than $600 a month, depending on the plan he chose. Last year, 82% of clients who reviewed their drug plans wound up switching plans, Omdahl says.

Medicare beneficiaries have yet another reason to focus on their potential drug costs during this fall’s open enrollment. A Trump administration proposal may significantly increase Part D enrollees’ out-of-pocket costs, Medicare experts say. The issue: After Part D enrollees’ out-of-pocket drug spending hits $5,100 in 2019, they reach “catastrophic” coverage, where beneficiary costs are typically much lower. Currently, discounts provided by drug manufacturers in the coverage gap are included in the tally of out-of-pocket spending—but the administration’s proposal would remove manufacturer discounts from the calculation. That means many people may not be able to reach catastrophic coverage, says Leslie Fried, senior director at the National Council on Aging’s Center for Benefits Access. “That’s something we opposed, because we have concerns about people not being able to afford their medication,” she says.

Medicare Advantage Plans

Recent regulatory changes are reshaping Medicare Advantage plans. Earlier this year, the Centers for Medicare and Medicaid Services broadened the scope of benefits these plans can offer to include things such as support bars in bathrooms, transportation to medical appointments and home aides to help with routine tasks such as bathing and dressing. CMS has also scrapped a rule requiring that there be meaningful differences among Advantage plans that an insurer offers in the same service area, and it has said that Advantage plans can offer certain groups of enrollees different levels of cost-sharing or supplemental benefits, based on their health status or diseases.

That means that “costs for the same benefit in the same area can be different based on your diagnosis,” Kayrish says, adding that the changes are likely to be confusing for beneficiaries. “There are a lot more opportunities for picking a good plan and a poor plan.”

If you take drugs that are administered in a doctor’s office, such as injections or infusions, pay extra attention to Advantage plans’ coverage rules. CMS recently announced that Medicare Advantage plans can apply “step therapy” for these drugs, which are covered under Part B. That means the plan may require you to first try a cheaper option before progressing to a more expensive drug.

All the more reason for Advantage enrollees to compare their options on Medicare Plan Finder. Look at each plan’s premium, co-payments and out-of-pocket maximum, its network of doctors and hospitals, and the costs you may face if you go out of network.

You don’t have to do this alone. Whether you’re in traditional Medicare or Medicare Advantage, consider contacting your state health insurance assistance program for help in assessing your options. Find your local program at shiptacenter.org.

If you go with an Advantage plan for 2019, you also have the opportunity for a do-over after January 1—and now you’ll have more time to make the move. In the first three months of the calendar year, you can switch to a new Advantage plan or traditional Medicare. That’s a change from years past, when Advantage enrollees could switch to traditional Medicare between January 1 and February 14.