Medicare’s annual open enrollment period begins October 15 and, given the COVID-19 pandemic, financial planners are urging beneficiaries to review and choose the plan that best suits their health care needs.
By way of background, Medicare health and drug plans can make changes to costs, coverage, and providers and pharmacies in their networks each year, according to the Centers for Medicare & Medicaid (CMS). And October 15 to December 7 is the period when all people with Medicare can change their Medicare health plans and prescription drug coverage for the following year.
So, what do you need to consider before open enrollment starts? Revisit your current Medicare enrollment options each year to see whether you would be better off in another plan. Why so? Changes in health conditions make revisiting health plans during the open enrollment period a necessity.
Medicare enrollment form Many physicians or facilities may change what they accept. Also, plan costs change, as do reimbursements for different medications that you may be using, so there may be other policies that are more cost-effective for you given your situation.
Consider a Medigap policy Medicare beneficiaries without some sort of Medicare Supplement Insurance (Medigap) will face Medicare cost-sharing if they contract COVID or have any other health problems. If you are newly eligible to medicare you are guaranteed enrollment in a medicare supplement policy, however after this period enrollment is no longer guaranteed and you will have to go through underwriting. According to the CMS, a Medigap policy helps fill "gaps" in original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for covered health care services and supplies. A Medigap policy can help pay some of the remaining health care costs, such as copayments, coinsurance and deductibles.
Consider a medical savings account If for whatever reason, you’re not able to purchase a Medigap policy, Sharon Luker, a certified financial planner with LTC Insurance Planning Consultants, recommends a Medicare Medical Savings Account (MSA), which combines a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs.
What about Medicare Advantage plans? Learn how Medicare Advantage plans work before enrolling in one. Make sure you understand the true costs of owning a MA plan. The monthly premium may be as low as $0 per month however, the co-pays can add up.
According to the CMS, Medicare Advantage plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all your Part A and Part B benefits. Most Medicare Advantage plans also offer prescription drug coverage. What are your options? If you have health conditions and leave a Medigap plan for a Medicare Advantage plan for the first time, you do get a one-time 12-month “trial right” period to try the Medicare Advantage plan and still have the option to go back to their same Medigap without medical underwriting.