The open enrollment period for Medicare Advantage (MA) plans closes at the end of this month. Here are some things to know if you’re currently eligible for Medicare.
What’s the Difference Between Original Medicare and Medicare Advantage?
Original Medicare is more flexible than Medicare Advantage, but also more complicated.
As you’re probably aware, Original Medicare is comprised of three distinct parts – Part A, Part B and Part D. Most retirees are covered by Part A at no cost, Part B requires you to pay a monthly premium that depends on your income level, and Part D, which covers prescription drugs, requires you to pay another, separate premium.
Most people who elect to receive original Medicare also purchase a separate Medicare Supplemental Insurance (Medigap) Plan to cover the costs associated with original Medicare’s high deductibles and copays. But once you make your Medigap plan selection, it can be difficult to make a change. While you cannot be excluded from buying a Medigap plan (or charged a higher premium for one) if you have any preexisting conditions when you first become eligible for Medicare (and as long as you keep up with premium payments, your Medigap policy is guaranteed renewable for your lifetime), that protection goes away if you switch plans.
So What’s the Advantage?
A Medicare Advantage (MA) plan (also called Medicare Part C) combines all parts of original Medicare, including prescription drugs. Because MA plans have their own deductible and co-insurance schedules, you won’t need to purchase a Medigap insurance policy, but unlike Medicare, MA plans limit you to the healthcare providers in the plan’s network.
During the 2019 MA open enrollment, you can change from one MA plan to another or revert back Original Medicare. If you choose to revert to Original Medicare, you’ll be able to enroll in a Part D plan. Any changes you make become effective one month after you make them.
If you’re currently enrolled in Original Medicare and want to switch to Medicare Advantage, you’ll have to wait until the fall open enrollment period begins on October 15.
Why It May Make Sense to Switch Plans?
You may want to switch from one MA plan to another (or to the original Medicare) for a number of reasons, such as:
- You tried to file a claim this year and realized that your current MA plan updated its benefits and no longer covers your claim. The most common changes to MA plans are made to the prescription drug formulary, which can have a big impact on out-of-pocket costs.
- You have developed a serious health condition recently and need (or want) more flexibility in choosing your healthcare providers, which is only possible with Original Medicare.
- You found a different MA plan that is a better fit, such as one that offers vision or dental benefits.
If you answer “yes” to any of the following questions, then it is strongly recommended that you review your coverage during the MA open enrollment period:
- Do you take any brand-name drugs?
- Have you changed or added any medications or healthcare providers in the past year?
- Have you had any health changes, hospitalizations or significant medical expenses in the past year?
- Have you had the same MA plan for two years or longer?
Keep in mind that if you choose to opt out of your MA plan and revert to original Medicare, buying a Medigap plan may be difficult since, as mentioned above, you may not be able to get coverage if you have a preexisting condition or are in poor health.
The decisions you make today regarding your Medicare choices can have a lasting impact on your finances later in retirement. A member of our advisor network can help you make the right Medicare choice for your financial situation and retirement goals. Request a free, no-obligation consultation today!