Jeff Goldberg is happy with his health coverage—a mix of traditional Medicare, a Part D prescription-drug plan and a high-deductible supplemental Medigap policy. The premiums are affordable, he says, and his out-of-pocket costs have been low.
But Goldberg, 67, is also a savvy shopper who is serious about minimizing his health spending. “I had nothing better to do one day and went to eight or nine pharmacies” to compare the cost of a single drug—the antibiotic doxycycline, says Goldberg, a retired business owner in New York City. He discovered that the priciest pharmacy in his Brooklyn neighborhood charged four times the price of the cheapest. What’s more, his Part D plan’s “preferred” pharmacy quoted him one of the higher prices.
How to use your HSA in retirement
So even though he likes his current coverage, Goldberg says that he will “absolutely” shop around during this fall’s Medicare open enrollment period. Goldberg compares coverage options every year, he says, because plans change, his health could falter and he’s always on the prowl for low costs combined with effective coverage in case of unexpected medical bills. “I’m healthy,” Goldberg says, “but everything is transient.”
Goldberg’s 60 million fellow Medicare beneficiaries would do well to follow his example. During Medicare’s annual open enrollment period, which runs from October 15 through December 7, you can shop for coverage that better fits your needs and perhaps save a bundle on health and prescription-drug plans for the coming year.
The stakes are particularly high this open enrollment season. New rules governing prescription-drug coverage, shifting out-of-pocket costs, Medigap changes for new enrollees and a slew of new benefits available in Medicare Advantage plans offered by private insurers are reshaping 2020 coverage options. Even Medicare Plan Finder, Medicare beneficiaries’ primary tool for sizing up coverage options, has been completely redesigned—offering some new benefits but also fresh challenges for seniors comparing plans.
Medicare experts are begging you: Don’t tune out this fall’s open enrollment. Comparing plans “is one of the single best ways you can lower your health care costs,” says Mary Johnson, Medicare policy analyst at the Senior Citizens League. Yet “the vast majority of people never compare plans.”
To avoid getting overwhelmed by all the shifting options, focus on the factors that are critical for your health and your pocketbook. Perhaps you’ve been prescribed costly new drugs, and you need a Part D plan that better covers those prescriptions. Or maybe maintaining access to your favorite primary care physician, specialists and hospitals is the top priority. “Make a list of what’s important to you” before you start browsing for plans, says Tatiana Fassieux, a training specialist at California Health Advocates. That way, you won’t get distracted by gym memberships or other fringe benefits, she says, which “may be the fluff that misguides you to a plan that’s not the right one for you.”
Next, take stock of the changes in store for your current coverage. If you’re on traditional Medicare, read the latest Medicare & You handbook, which should be mailed to you and is also available on medicare.gov. If you have a Medicare Advantage or Part D plan, check your mailbox and the plan website for notices outlining any changes in benefits, cost sharing and provider networks for 2020. “What works for you now might not work for you next year,” says David Lipschutz, associate director of the Center for Medicare Advocacy. “To maximize your Medicare benefits, you have to do your homework.”
Two basic options: Traditional Medicare vs. Medicare Advantage
During open enrollment, you can switch between two basic types of coverage: traditional government-run Medicare or a private Medicare Advantage plan. Traditional Medicare typically includes Part A hospital coverage and Part B for doctor visits and other outpatient services. You’ll owe 20% co-insurance for Medicare-covered services after meeting your deductible. There’s no annual limit on out-of-pocket spending, but enrollees can buy a Medigap policy to help cover those costs. Traditional Medicare beneficiaries can see any doctor who accepts Medicare and don’t need referrals to see specialists.
Medicare Advantage plans must provide the same benefits as traditional Medicare but may have different rules and restrictions. Most Advantage plans include drug coverage, and many offer vision, dental and other benefits. Out-of-pocket costs vary from plan to plan and are subject to an annual cap. Enrollees can’t buy Medigap policies. Typically, you’ll have to stick with your plan’s network of providers and will need referrals to see specialists.
When weighing these two options, remember that Advantage enrollees who later want to switch to traditional Medicare may hit a snag: With some limited exceptions, insurers in most states are only required to sell you a Medigap policy during the first six-month period when you are both 65 or older and enrolled in Part B. Beyond that period, you might be charged more for a Medigap policy based on your health conditions or denied Medigap coverage altogether.
Compare drug coverage
For Marlene Stofan, drug costs are a critical factor in 2020 coverage decisions. Stofan, 68, was diagnosed with Sjogren’s syndrome early this year and now needs pricey drugs that her Part D plan doesn’t cover. The prescription eye drops alone cost nearly $600. “I can’t afford that,” says Stofan, who lives in West Middlesex, Pa. More broadly, she’s frustrated by drugs in her plan’s formulary shifting “tiers,” which raises her co-pays. She’ll switch plans for 2020, she says, “mainly because of the limited drug coverage, with tier changes costing much more than expected.”
Yes, the Part D coverage gap known as the doughnut hole is closing in 2020, but that’s not an excuse to skip drug-plan shopping this fall. Enrollees can still face hefty out-of-pocket costs that vary significantly from plan to plan. And people with high drug costs face an added challenge next year: The total out-of-pocket spending required to reach “catastrophic” coverage—where beneficiaries typically pay 5% of the cost of a drug—jumps to $6,350, up from $5,100 in 2019.
Make a list of your medications, and gather notices from your drug plan highlighting any changes in costs or benefits for 2020. When comparing your current drug plan against competing options, pay particular attention to deductibles, co-payments, preferred pharmacies and formularies.
That last detail has become more vexing as Part D plans slice and dice their drug coverage in new ways. Traditionally, if a Part D plan included a particular drug on its formulary, it had to cover every FDA-approved “indication,” or use of that drug. But starting in 2020, Part D plans are allowed to limit coverage of a drug to specific indications. For example, a tumor necrosis factor blocker that’s FDA-approved to treat both Crohn’s disease and plaque psoriasis could be included on the formulary only for plaque psoriasis, so long as a similar drug on the formulary is covered for Crohn’s disease, according to a memo sent by the Centers for Medicare and Medicaid Services to Part D plan sponsors. As in previous years, drug plans can also limit coverage in other ways, such as requiring prior authorization.
Check plan notices and drug coverage details on Medicare Plan Finder to find out whether such restrictions may affect you. And if you’re still uncertain about whether your prescriptions are covered, call the plan.
Fill in the coverage gaps
If you’re on traditional Medicare, a Medigap policy can help cover the required Medicare cost-sharing as well as some costs that traditional Medicare doesn’t cover, such as emergency care overseas. In most states, there are 10 types of Medigap policies, identified by the letters A, B, C, D, F, G, K, L, M and N. Each letter offers a different set of standardized benefits, but premiums can vary widely among plans with the same letter.
Plan shoppers, beware: A Medigap change coming in 2020 has spawned some dubious sales tactics. People who are newly eligible for Medicare on or after January 1, 2020, will not be able to purchase Medigap Plan C or F—the two plans that cover the Part B deductible. People eligible for Medicare before that date are not affected. If you already have Plan C or F, you can keep it. And if you don’t but qualify by eligibility date, you can still buy Plan C or F in the future—with the usual caveats about potential medical underwriting. Yet “some people selling these plans are saying, ‘you have to change, you have to change,’ ” says Ann Kayrish, senior program manager for Medicare at the National Council on Aging. “You don’t have to change.”
In Medigap plans that are no longer available to newly eligible Medicare beneficiaries, however, premiums may rise because “the insured pool will shrink,” Fassieux says. Some Plan F enrollees are already finding money-saving options elsewhere. Bob Lowry, age 70, is currently on Plan F, but he has found that Plan G is cheaper and offers all the same benefits, except for coverage of the Part B deductible—which is $185 in 2019. So the only reason to stick with Plan F is for coverage of that deductible, and “the difference in premiums does not make that a reasonable choice,” says Lowry, a retired management consultant in Phoenix. He hopes to soon switch from Plan F to Plan G.
It can be tricky to switch Medigap policies beyond your six-month Medigap open enrollment period. Plans and eligibility rules can vary from state to state, so seek local advice. Find your state health insurance assistance program, or SHIP, at shiptacenter.org.
Medicare Advantage, or disadvantage?
Medicare Advantage plans have long offered additional benefits, such as gym memberships, not covered by traditional Medicare. But now, those extras are set to grow exponentially. A 2018 law and new CMS regulations allow Advantage plans to offer a broader range of supplemental benefits and tailor those benefits in new ways. Previously, Advantage plans had to offer the same benefits and charge the same cost-sharing to all enrollees in a given area. Now, they can offer different bells and whistles and charge different cost-sharing to enrollees with certain health conditions.
As of 2019, Advantage plans have added flexibility to cover adult day care, in-home assistance, support for family caregivers and other services. But relatively few Advantage plans offered the new benefits this year, likely because the rule changes were announced just a short time before insurers had to finalize their 2019 plans, according to the AARP Public Policy Institute.
More changes are coming in 2020, when Advantage plans can offer chronically ill enrollees non-health-related benefits. That may include meal delivery, transportation for grocery shopping and other errands, indoor air-quality equipment, and services to address social needs, including everything from marital counseling to park passes, according to a CMS memo.
The extras can vary widely among plans and even among various enrollee groups within plans, so “it can be tricky to understand precisely what is being offered and what a person will be entitled to,” says Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center. Read the plan’s “evidence of coverage” document, which should be on its website, for details on supplemental benefits.
As you shop, stay focused on your top priorities. “Does coverage of a grab bar outweigh the fact that my doctor is not part of the network?” Lipschutz says. To ensure your preferred doctors are part of the plan’s network, check the provider directory on the plan website, but also call your doctors to confirm they’ll remain in the network for 2020, says Alan Mittermaier, president of HealthMetrix Research.
If you jump into an Advantage plan and later regret your decision, remember that you can switch to a different Advantage plan or to traditional Medicare between January 1 and March 31.
New Medicare Plan Finder
In late August, CMS released a redesigned Medicare Plan Finder—the tool for comparing Medicare coverage options. The new tool has pros and cons, beneficiary advocates say. On the plus side, it still allows users to browse plans anonymously, while offering additional personalized features to those who log in with a MyMedicare.gov account. The system can create a list of drugs you take, for example, using your Medicare claims data. You can create a MyMedicare account at mymedicare.gov.
But you need a Medicare number in order to create a MyMedicare account—a potential stumbling block for anyone looking to study their options in detail before enrolling in Medicare, says Diane Omdahl, president of Medicare consulting firm 65 Incorporated. And unlike the old Plan Finder, which allowed users to save drug lists entered during an anonymous search, the new Plan Finder won’t save anonymous users’ information.
Given all the changes, people who need help comparing plans should make appointments with their SHIP or other Medicare counselors early. “These changes tend to impact how many counseling sessions they can do in a day and how long they take,” Schwarz says.
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