4 tips for making the most of Medicare’s open enrollment

Editor’s Note: Journalist Philip Moeller is here to provide the answers you need on aging and retirement. His weekly column, “Ask Phil,” aims to help older Americans and their families by answering their health care and financial questions. Phil is the author of the new book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil.

Medicare’s annual open enrollment season begins Oct. 15 and extends through Dec. 7. So, once again, I will mount my little soapbox and urge current Medicare enrollees to take advantage of this opportunity to evaluate their Medicare coverage and decide if they wish to make any changes next year.

I will be returning to this topic in future installments of Ask Phil. For now, here are a few preparatory pointers.

1. Don’t be in a rush.

Open enrollment decisions – even those made in December – will take effect Jan. 1. You can and should take time to understand how your current Medicare policies will change next year, and whether you can improve coverage, save money, or both, by changing your mix of policies.

2. Carefully study the details like costs changes and provider network.

If you have private Medicare insurance policies – Medicare Advantage, Part D drug plans, or state-regulated Medigap supplement plans – you should already have received annual notices explaining how the prices and coverage terms of these plans will change in 2018.

I urge you to spend some time with these documents. Look not only at how premiums will change but also at co-pays, deductibles and other costs.

In particular, pay attention to how your drug plans are pricing your prescription drugs. These plans feature multiple pricing tiers, with the most common structures having five tiers – preferred generics, other generics, preferred branded drugs, other branded drugs, and expensive specialty medications. Look for pricing changes within tiers and also to see if any of your medications have been moved from one tier to another.

If you have a Medicare Advantage plan, make sure your current health care providers are still in the plan’s provider network in 2018. It wouldn’t hurt to call the offices of your primary doctor and key specialists to ask them if they are making any key changes for Medicare patients next year.

3. Use Medicare’s online tools if you have concerns.

If your review of 2018 changes in your existing coverage raises any red flags, you can use Medicare’s online Plan Finder to review other Medicare Advantage and Part D plans available where you live. There is a separate Medigap Policy Search tool.

READ MORE: A procrastinator’s guide to navigating Medicare open enrollment

There are tutorials explaining how to use these tools. If this work is too daunting for you, enlist a family member to help. If you still have questions, contact a local office of the State Health Insurance Assistance Program (SHIP), which offers free Medicare counseling. Its representatives spend a lot of time with Plan Finder and other Medicare insurance tools.

4. Some switches are easy; others not so much.

Open enrollment allows you to freely switch among Medicare Advantage and Part D plans. You cannot be denied coverage or charged more money because of your age or pre-existing conditions. (There are exceptions for people with End-Stage Renal Disease.) You also can switch from basic Medicare (Parts A and B) to a Medicare Advantage plan, and vice versa.

However, you may not be able to switch easily among Medigap plans or buy a new plan. When a person enrolls in Medicare for the first time, they usually enjoy what are called “guaranteed issue rights” that require insurers to sell them Medigap plans on favorable terms. These rights normally expire six months after this initial Medicare eligibility period. Afterwards, Medigap insurers may be permitted to charge higher rates or even deny coverage to a person based on their age and pre-existing conditions. Depending on where you live, this may not ever be a problem, but it’s something you should explore carefully before making related open enrollment decisions.

Look for more detailed reports in coming weeks, including answers to your open enrollment questions.

Here are this week’s reader questions:

Ron – Ore.: When my wife and I both turned 66 in 2014, she applied for full Social Security benefits and I filed a restricted application to receive spousal benefits. I plan to file for my own benefits when I turn 70 in 2018. We both currently have Medicare Part B premiums deducted from our Social Security benefits.

When I apply for my full benefits at age 70 will my Medicare Part B premium be set at the then current “new enrollee” rate or will I continue to be “held harmless” since I have been paying Medicare Part B premiums from my spousal benefits since 2014?

Phil Moeller: Ron is among several readers who have asked whether taking a new Social Security benefit can “reset” their Part B premium, even if they have been held harmless against previous Part B premium increases. The simple answer is yes, but there is little that is simple about Social Security’s hold harmless rules. Inasmuch as Social Security will soon be announcing its 2018 annual cost of living adjustment (COLA), it’s a good time to review this issue.

The principle behind the hold harmless rule is that Social Security rules prevent the agency from reducing the size of a person’s net benefit from one year to the next. This is the amount of money a person actually receives, and reflects any deductions from the benefit. By law, anyone on Medicare who is receiving Social Security benefits must have their Part B premium deducted from their Social Security payment.

Rising health expenses have caused a regular boost in Part B premiums in recent years. Normally, rising inflation creates a Social Security COLA that is big enough to pay for higher Part B premiums and also raise the net benefit paid to Social Security recipients.

In recent years, however, rates of inflation have been very low. The Social Security COLA was zero for a couple of years and very small last year. As a result, higher Part B premiums would have actually reduced net Social Security benefits. To avoid this, people who had Part B premiums deducted from their Social Security benefits were held harmless. As a result, their Part B premiums either did not rise at all, or else rose only by an amount that would avoid an actual decline in their Social Security payments the following year.

This situation confuses even me, and I’ve been writing about it for years! Here’s a longer take on the topic.

The takeaway in terms of answering Ron’s question is to return to the core purpose of the hold harmless rule, which is to prevent a person’s Social Security benefits from declining from one year to the next.

Following the money, so to speak, the issue for Ron and others with similar questions is whether the new benefit they are claiming will result in higher Social Security payments. Of course, this is what would happen, or else why would Ron and others want to file for an additional benefit in the first place?

But when people’s benefits rise in this manner, then it also means they might be able to pay the current level of Part B premiums – now $134 a month – without causing a reduction in their net Social Security benefits. So, even though Ron has been held harmless in the past, Social Security is correct in assessing him a higher Part B premium as a result of his new benefit entitlement.

This reply does not address the broader issue of how higher Part B premiums affect the roughly 30 percent of Social Security recipients who aren’t held harmless. I will address this late this fall after Social Security has announced the 2018 COLA and Medicare has set next year’s Part B premiums.

Karen – Pa.: I will be 62 in February. My husband died in 2008 at age 55. I won’t get much Social Security because I didn’t work much in the United States, and when I did, I was a teacher. His benefits are better. If I take my Social Security at 62 and then take his at 66, will mine then stop? If I don’t take them before I start taking his at 66, will I lose mine?

Phil Moeller: Taking your own benefits at 62 and then claiming a survivor benefit when you reach full retirement age is your best option. Because you were born in 1956, your full retirement age is not 66 but 66 and four months of age. When you reach that age and file for your survivor benefit, you should receive an additional payment each month equal to the amount by which that benefit exceeds your own retirement benefit.

READ MORE: Can I work and still collect my late husband’s Social Security benefits?

Make it clear when you file for your own retirement benefit that you are filing only for that benefit right now, and that you will file for your survivor benefit when you have reached your full retirement age.

Lastly, because your survivor benefit is greater than your own retirement benefit, failing to claim your own retirement would result in you receiving no benefits on your own work record. Social Security, by the way, never pays the full amount of two benefits at the same time, but rather an amount that is roughly equal to the greater of the two.

Ron: My wife is nearly 67 and has had Medicare since age 65. She feels that her choices are sometimes limited because she has to choose a doctor who accepts Medicare. Sometimes, she feels like this may not give her access to the most qualified doctor or health care provider. She also has a Medigap supplement F plan that pays all the deductibles and copayments. I realize that Medicare is usually the primary payer, but aren’t there times when a different individual health policy in addition to Medicare could be beneficial?

Phil Moeller: At last count, more than 90 percent of all doctors accept Medicare, so I’d think your wife should be comforted that there is a qualified doctor who accepts Medicare who can meet her medical needs. However, good doctors often have practices that are completely filled, and it can be hard to find a good doctor, whether he or she accepts Medicare or not.

As for another private insurance policy, I don’t hold out high hopes that she could even find such a policy, let alone be able to afford the premiums.

READ MORE: How do I know if my doctor accepts Medicare?

It could be that your wife’s best solution would be to find a doctor in a concierge practice. These practices enroll a limited number of patients, charge patients an annual fee, and usually work with Medicare and other insurers. Patients can get access to these doctors on a regular basis. Of course, you pay for this access, but if your finances can handle the expense, perhaps this is a route your wife would like to take.

It seems to me your wife’s first step would be to locate the doctor or doctors she would ideally like to see. Do they accept Medicare? If not, what do their offices say about insurance? I realize this could be a time-consuming process, but I really don’t know of any short-cuts here.