Inform yourself for Medicare open enrollment

Photo by RODNAE Productions

Here we go again. It’s the annual Medicare open enrollment period. Making a mistake could impact your health care and its cost for the rest of your life!

You must do more than listen to enticing television commercials and instead use the Medicare.gov website to search out your alternatives. Here are some of the choices you must consider.

Traditional Medicare vs. Medicare Advantage

The annual open enrollment period is the biggest opportunity for for-profit companies to enroll new retirees into these all-in-one plans that promise more coverage and lower prices (or no monthly premiums) than traditional Medicare Parts A, B and D, plus your supplement.

How do they pay for all those television commercials? They limit your health care to physicians, hospitals and clinics that agree to participate in their networks at lower reimbursement rates.

With traditional Medicare, you can see any physician or specialist who accepts Medicare. But once you’re in an Advantage plan, you are limited to its network, which may not offer the specialists and hospitals you want to use. As well, you may have to wait for a referral to its in-network services. And there will be co-payments for doctor visits and hospital stays. So, it’s not all “free.”

Some slightly more expensive Advantage plans work on a PPO (Preferred Provider) basis. You can use out-of-network providers but at a higher cost. Before choosing an Advantage plan, make sure your physician or hospital is in the network. And be aware that those providers may change from year to year.

That’s the trade-off between traditional Medicare and the offerings of Medicare Advantage plans. Lower premiums vs. limited access. An Advantage plan’s networks may change, prescription drugs may be limited to generics, and hospital contracts may be rearranged in years ahead. And you’ll likely never realize the coverage limitations until you need the care.

There is a limit to the out-of-pocket costs you can be charged in an Advantage plan. For 2023, the limit is $8,300 for in-network costs such as co-payments. But the plans have a much higher limit (over $12,000) for combined in- and out-of-network out-of-pocket costs.

Clearly, if you are seriously ill, the “advantage” of this low-cost or no-cost monthly Advantage plan disappears quickly. At Medicare.gov you can compare these Advantage programs and coverages and potential costs.

Switching back from Advantage to traditional

What happens if you join an Advantage plan, develop a medical condition and realize you’ve made a mistake? You’re told that if you don’t like your Medicare Advantage program, you can go back to traditional Medicare during open enrollment next year.

But if you have developed a medical condition during the year, you will likely not be allowed to go back to your original comprehensive Medicare supplement plan. (You’re only allowed to purchase these top plans without evidence of medical condition if you apply within the first six months after becoming eligible for Medicare.) So, when you “return” to traditional Medicare, your new supplement will likely leave large, uncovered expenses for you to pay.

Medicare supplement plans

When you initially sign up for traditional Medicare, you will pick a supplement that covers things like deductibles, not covered by Part A and B. The time to pick the best, most comprehensive plan (F) is at the initial sign-up. (If you enrolled in Medicare after 2019, you’re limited to Plan G, which does not cover the annual deductible.)

You can expect the monthly supplement premium to increase every year — especially if you move to a state with higher medical costs. But, typically, you do not want to change your supplement policy to save money, even if monthly premiums rise.

Medicare Part D

You must shop for Medicare Part D every year! These Part D drug plans change not only prices but covered drugs every year. To find the best Part D plan, go to Medicare.gov. Create your own secure account. Input your medications and dosages.

The calculator on the webpage will show you three plans with the lowest out-of-pocket costs. You can apply for a new plan directly from the Medicare.gov website. To avoid penalties, buy Part D even if you don’t currently take prescription drugs. Changing Part D won’t impact any other aspects of your traditional Medicare program.

The Medicare.gov website is your one-stop comparison source for all of these plans. It is amazingly easy to use, and it could keep you from making a long-term mistake.