Medicare Open Enrollment: How to Shop Smart

Medicare’s upcoming annual Open Enrollment Period runs from Wednesday October 15 to Sunday December 7. And finding the right Medicare Part D prescription drug plan or private insurer’s Medicare Advantage health plan (Part C) really matters.
 
In fact, a Henry J. Kaiser Family Foundation study found that 46 percent of people who switched their Medicare plans during open enrollment saved at least 5 percent the next year.

But with hundreds of policies to choose from — and so many details to understand — most people 65 or older simply guess when choosing theirs. The result? Paying too much for a plan that doesn’t cover what you need.
 
(MORE: What Medicare Doesn’t Cover: A Preretiree’s Guide)
 
Below, how to make the wisest choices if you will buy a Medicare Part D plan or a Medicare Advantage plan or switch out of the one you have. (A one-stop shopping Medicare Advantage plan combines coverage for hospitals, doctors and often prescription drugs; some also include vision, hearing and dental care; its premium may be less expensive than what you’d pay with the combination of Original Medicare, a Medigap plan and a Part D plan.)
 
What’s Different This Year
 
First, the news: Many companies are consolidating their Part D policy offerings, so the number of plans for 2015 will decline by about 14 percent, according to Avalere Health. But you’ll still have about 30 Part D plans to choose from.
 
If you already have a Part D plan and think you want to keep it, you may need to see if yours is still available. Your insurer should have notified you if yours will be discontinued.
 
The average premiums for Medicare Advantage and Part D plans will rise in 2015, but only slightly. According to the Centers for Medicare and Medicaid Services (CMS), the average Part D premium will go up by an average of $1 a month, to $32, and the average monthly premium for a Medicare Advantage plan is due to increase by $2.94, to $33.90. Some Part D and Medicare Advantage plans, of course, will see premiums jump more than that. However, CMS predicts that about 61 percent of Medicare Advantage enrollees won’t see any increase in 2015.
 
It’s also worth noting that the prescription drug “doughnut hole” — the coverage gap for medications — will shrink in 2015, as a result of the Affordable Care Act. Next year, when your out-of-pocket drug costs are between $2,960 and $4,700, you’ll be in the doughnut hole (that happened at the $2,850 threshold in 2014). Then, you’ll pay 45 percent of the cost of brand-name drugs, down from 47.5 percent in 2014, and 65 percent of generics, down from 72 percent.
 
4 Tips for Medicare Open Enrollment Shopping
 
Before you start shopping, review these four tips from the National Council on Aging (NCOA):
 
Tip No. 1: Don’t miss the enrollment period. This is the one guaranteed time each year that anyone with Medicare can change plans.
 
If you’re about to turn 65 and not enrolled in Medicare yet, your Initial Enrollment Period for Medicare Parts A, B and D runs from three months before your 65 birthday to three months after. NCOA’s educational service, My Medicare Matters offers a free Medicare QuickCheck that will provide you with a personal report including your initial enrollment date. Also worth reading: Next Avenue blogger Caroline Mayer’s new Washington Post article about her experience trying to enroll in Medicare.
 
(MORE: What Are Medicare Advantage Plans?)
 
If you’re still working when you turn 65, you can delay enrollment in Medicare Parts A, B, and D if your insurance meets certain requirements. Find the rules here.
 
Tip No. 2: Don’t guess when picking coverage. Choosing a Medicare plan is too important to leave to guesswork. Take the time to review your health insurance needs before Open Enrollment. Think about the following and then find policies with the best match for you:

• Do you have any chronic conditions?
• Which doctors and hospitals do you use?
• Which prescriptions do you need and what pharmacies do you get them from?

Tip No. 3: Scrutinize your current policy and compare it with the alternatives available. Insurance companies can make changes to policies every year. Just because your doctors and medications were covered last year doesn’t automatically mean they will be in 2015.
 
Bear in mind that Medicare Advantage plans are usually Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs) with a restricted network of doctors and health care providers. That’s why it’s essential to see that your preferred doctors and hospitals are in the Medicare Advantage plan you’re considering. If they’re not, you may want to stick with Original Medicare, which lets you see any doctor who accepts Medicare.

(MORE: Retirement Health Costs: Planning for the Wild Card)
 
When checking your plan against others you could buy, find out: the premium costs, co-pays, co-insurance and the providers and prescription drugs that are covered. Although the average monthly premium for Part D and Medicare Advantage plans will be around $33, the premiums vary widely — from as little as $15 in some areas to over $200, depending on the plan — and those figures don’t include additional costs such as deductibles and cost sharing.
 
If your health has changed in the past year or you fell into the “doughnut hole” in 2014, see if your current plan is still meeting your needs.
 
Also, go through your records to see how much you paid out-of-pocket in 2014, so you can decide whether the policy you have is a good fit for you or if there’s another plan with similar or better coverage that will cost you less. Medicare’s online Plan Finder can help you assess the costs of plans in your area.
 
Tip No. 4: See if you qualify for help paying your out-of-pocket Medicare costs. There are programs designed for people struggling to pay their prescriptions, health premiums, deductibles, and co-insurance. NCOA offers a free online BenefitsCheckUp where you can see if you’re eligible for help. Or, contact your State Health Insurance Assistance Program to see what’s available.
 
Brandy Bauer is Communications Manager, Economic Security at National Council on Aging.