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A procrastinator’s guide to navigating Medicare open enrollment

Editor’s Note: Journalist Philip Moeller, who writes widely on health and retirement, is here to provide the Medicare answers you need in “Ask Phil, the Medicare Maven.” Send your questions to Phil.


This is the last week of Medicare’s annual open enrollment period, which began Oct. 15 and will end on Dec. 7. Several past Ask Phil columns have dealt with various aspects of open enrollment. Here’s the CliffsNotes summary:

UNDERSTAND THE BASIC CHOICES YOU HAVE

People with Original Medicare have the option during open enrollment of buying a Medicare Advantage plan, which must cover at least what Original Medicare covers. They cannot be denied coverage or required to pay more because of pre-existing conditions. (An exception to this rule is that people with end-stage renal disease are not eligible for a Medicare Advantage plans.)

Likewise, if you have a Medicare Advantage plan, you are free to pick a different a Medicare Advantage plan, or you can drop Medicare Advantage and switch to Original Medicare.

Everyone with Medicare — the roughly 70 percent with Original Medicare and the 30 percent with Medicare Advantage — has the option during open enrollment of purchasing a private Part D prescription drug plan or changing to a different Part D insurance plan.

MEDIGAP

People with Original Medicare (Parts A and B of Medicare) can also choose whether they want to buy a Medigap policy, also known as a Medicare supplement policy. And people who already have a Medigap policy can buy a different Medigap policy.

Medigap policies fill, to varying degrees, the holes in Original Medicare. The biggest hole is that Original Medicare pays only 80 percent of covered expenses, leaving beneficiaries on the hook for the other 20 percent. As anyone who’s stayed in a hospital or had major surgery knows, that can be 20 percent of a very, very big number.

If you don’t have Medigap or even if you do, you can select a Medigap plan during open enrollment. There are 10 different Medigap “letter” plans. Coverage within each type of plan must be identical. This means that all letter A plans are the same, all letter B plans and so on. But premiums can and do vary a lot. So shopping around for the best rate is a must. Specific coverage requirements of the various plans have not changed much since I wrote about them a year ago. You can find them on page 101 of “Medicare & You 2016.”

People with Original Medicare who switch to Medicare Advantage cannot keep their Medigap plan should they have one. Medigap plans do not provide any coverage to people with Medicare Advantage.

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Which Medigap plan should you get?

People have guaranteed rights to Medigap policies on favorable terms when they’re first eligible for Medigap. But later on, these rights are not available in many states, possibly adding to Medigap policy costs and perhaps even restricting their availability.

So if you’re thinking of changing Medigap policies, check with your state insurance department or call a counselor with the State Health Insurance Assistance Program (SHIP) to learn about rules where you live. And if you drop Medigap as part of a switch to a Medicare Advantage plan, you should consider these consequences should you wish to return to Original Medicare with a Medigap policy in the future.

PART D DRUG PLANS

For 2016, active plan shopping will yield big benefits in Medicare Part D prescription drug plans. Premiums will be 13 percent higher in 2016 than in 2015, the Kaiser Family Foundation reported, and will average more than $41 a month. However, there will be an enormous range of plan costs with bare-bones plans costing little and others charging $100 monthly premiums. Many insurers also will be raising less visible expenses, such as annual deductibles (which can go as high as $360 in 2016) and drug coinsurance payments.

Many Part D beneficiaries qualify for low-income subsidy (also known as LIS) or benchmark plans that charge zero monthly premiums. The numbers of such plans offered by insurers will decrease in 2016, and some low-income subsidy beneficiaries will need to choose different plans.

More than 40 million people have Part D drug coverage, either through a stand-alone plan (usually abbreviated as a PDP) or wrapped in with a Medicare Advantage plan (known as a Medicare Advantage Prescription Drug plan or MA-PD). With drug prices forecast to continue rising next year, this year’s open enrollment season presents a terrific opportunity to review your drug coverage and see if there is a better plan for you.

Here are seven questions to ask:

  1. How will your overall costs change next year?
  2. Are all your prescription drugs still included in your plan formulary (the list of prescription medicines covered by the plan)?
  3. If you take any expensive medications, how will they be treated?
  4. Can you still get your prescriptions filled at your local pharmacy, and at what price?
  5. Are your prescriptions written by a Medicare-enrolled provider?
  6. What does the coverage gap (also known as the donut hole) look like in 2016?
  7. Is your income low enough to qualify for Medicare’s Extra Help program?

If you need help figuring out how to get answers to any of these questions — and who wouldn’t — you can find details here.

MEDICARE ADVANTAGE PLANS

Medicare Advantage plans must cover everything that Original Medicare covers. Many plans actually cover more, including hearing, vision, dental and even gym memberships. They combine these features in a single insurance policy, usually including Part D drug coverage, and it often costs less than Original Medicare, Medigap and a stand-alone Part D drug plan.

The plans can afford to offer these additional features because most of them require people to get their health care needs from a provider network created and managed by the plan. These networks can create big savings for insurers, but can also sharply restrict health care provider choices for Medicare beneficiaries.

Here are four shopping tips for Medicare Advantage plans:

Pay attention to plan ratings.

Check out the Centers for Medicare & Medicaid Services’s (CMS) five-star rating system for Medicare Advantage plans, which is based on more than 30 variables (there are additional measures used when rating Medicare Advantage Prescription Drug plans).

Look at total out-of-pocket costs.

Low Medicare Advantage premiums and zero premium plans may be appealing at first glance. However, as I’ve been stressing and stressing about, premiums are just one cost component of Medicare coverage. You also need to look at plan deductibles, coinsurance and copays.

The largest out-of-pocket exposure that Medicare allows for these plans is $6,700 this year for health coverage, and most Medicare Advantage plans have lower ceilings. There can be a separate ceiling for out-of-network health costs, which apply to Medicare Advantage “PPO” or preferred provider organization plans. Medicare Advantage Prescription Drug plans include yet a third out-of-pocket number for drug costs.

Find out who’s in your Medicare Advantage plan provider network.

Medicare Advantage insurers have online search tools to let you know if your preferred physicians, hospitals and other care providers are in their provider networks. You don’t want to sign up for a new Medicare Advantage plan only to learn that your doctor is not in it.

Here are the pathways to Medicare Advantage plan provider networks from leading insurers:

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