It’s open enrollment time again for Medicare (October 15-Dec 7). If you are eligible for Medicare you have the option of staying with the medical and drug plans you have or changing them. Every year since 2020, I have shared a version of this post about some of the issues that occur when you change your plan. How do you know if a new plan would be better for you? And what would “better” mean? Are all your prescription drugs covered on your prescription drug plan this year, and can you take advantage of the new law that will reduce the cost of some drugs like insulin in 2023 (and cap your overall costs by 2025)? It’s time to check.
One way to find out if another plan would be better, in terms of costs at least, is to go to the Medicare.gov website. If you have an account already, you just log in. If you have not established an account, they make it easy for you to get one. On this site you can compare the 2023 medical or drug plans to the ones you have in terms of premium costs, annual costs, size of the network, and coverage. Since basic Medicare services must be the same across all medical plans, the biggest difference among these plans is likely to be cost to you and the extent of the provider networks, not whether or not hospitalization is covered. Part C (Medicare Advantage) plans may vary by the additional services they offer, like eye and dental exams or gyms, but nearly all Medicare Advantage plans include prescription drugs, so you don’t have to buy a separate plan for drugs. If you have Original Medicare plus a Supplemental or “Medigap” plan (like United/AARP or Blue Shield, etc.), you will need to purchase a separate Part D (prescription drug) plan. Part D plans are not all alike in terms of what drugs they cover. Your prescriptions may not be included in the 2023 plan, so you should shop around on the Medicare website for a drug plan. You just enter the drugs you take and Medicare helps you sort out which plans cover those drugs and what it will cost you. It’s a worthwhile use of your time.
Even though you have been in a Medicare medical plan for many years, there are a few things you may not know about the program. One is how you can get locked into Medicare Advantage, and the other about out of pocket costs with the Medigap plans.
As you know, when you became eligible for Medicare, you had three basic choices for your medical care: 1) Stay with what is called “Original Medicare” (Parts A and B) and choose a Part D plan separately, which will cover about 80% of your costs; 2) Enroll in Original Medicare plus a Medigap plan to fill in most of the other 20%; or 3) Enroll in Part C (Medicare Advantage), which covers Parts A, B and D. In Medicare Advantage, the government pays the medical plan a lump sum to take care of you. If you do well and don’t need many services, the insurer will make a profit. However, if you use a lot of services, the insurer may lose money. It should be to the benefit of the plan to keep you healthy and provide you with as much preventive and maintenance care as possible. At least, that’s the theory. Many Medicare Advantage plans actually have attractive features like zero monthly premiums and extra services. At this time of year, you will see many ads on TV about the “wonderful”aspects of the different plans.
Before you choose a Medicare Advantage plan, or leave your Medigap arrangement, be pretty sure you want to stay with that plan for a long time. Changing back to Original Medicare plus a Medigap plan after the first year of being in Medicare Advantage may cause you to have your pre-existing conditions considered in the pricing. This practice is called “underwriting,” allowing the insurance company to price your premium in relation to your health status. There are some complicated rules about when you can enroll, disenroll, and switch choices. Use the Medicare website to provide you accurate information about changing options or call the Center for Health Care Rights or the HICAP program in your area. These are nonprofits that can give you independent information. They don’t sell insurance and they are happy to answer even the most basic questions. Beware of “look alike” sites on the internet that appear to be giving you independent information about Medicare but are NOT really independent at all. (You can tell by whether the website has a .gov or a .com at the end of their name and in the very tiny print at the bottom of the ad that says it is not an official government website.)
If you choose Original Medicare with a Medigap plan, you have to choose one of the A-N options. The differences among these options are NOT which services are covered. The services that Medigap plans cover are standardized across all plans. The differences will be how much you will pay for any of these services if you need them. This is a great comparison chart from the Medicare.Gov website to show the differences among these plans. It’s easy to see that the more of the costs that are covered, the higher your monthly premiums will be. Most Medicare recipients choose the C or F plans, which are the most costly. Plans K and L, which only cover 50% or 75% of some of your costs might seem too skimpy. Yet, Plans K and L have been the ONLY Medigap plans that have a limit on your Out of Pocket costs. The other plans may seem to cover 100%, but if the charge is not approved by Medicare or not considered “medically necessary,” you can be left with some significant out of pocket costs. Plan options K and L guarantee that after you have paid your Part B Deductible and reached these annual out of pocket limits ($3470for Plan L and $6940 for Plan K in 2023), the plan will cover 100% of any remaining costs.
If you decide you want to change your MediGap plan to another one, please consult one of the nonprofit advisors I listed above OR go to Medicare.Gov and read the finer print. You could end up paying more in premiums than you thought or be outright denied in your attempt to choose a “richer” plan than you have.
I am not promoting any one of these options — stay with Original Medicare and a Medigap plan or choose Medicare Advantage. The choice is always yours. The only message here is to read the fine print and do not pay attention to TV ads enticing you to “call this number for a free consultation.” The call is not really going to be free, because they may high pressure you into choosing one of their options. In addition, as useful as brokers can be in sorting out your options, remember that brokers who sell Medicare Advantage plans get a much higher commission for selling those plans over Medigap options. Instead, call one of the nonprofit organizations I listed above. They will give you independent advice.
Feel free to comment and ask questions and I will do my best to respond or direct you to a resource that you can trust!
P.S. I just found out that some Prescription Drug plans are NOT covering some types of insulin in order to avoid implementing the $35/month maximum. IF you take insulin, please call your current drug plan to be sure they are still covering it at the reduced rate in 2023.