Top 5 Things to Consider When Choosing a Medicare Plan

It is important to find a plan that matches your unique health needs, finances and lifestyle. Medicare Advantage plans often provide additional benefits, and most include prescription drug coverage.

Beneficiaries who choose to supplement their traditional Medicare with a private insurance plan cited choice of providers as the most popular reason for their decision. Medicare’s free Plan Finder tool and star ratings can help you weed out potential choices.

1. Cost

Choosing a Medicare plan isn’t cheap. The premiums and deductibles alone can be hundreds, or in some cases, thousands of dollars each year. And that’s before you add in your prescription drug costs and other out-of-pocket expenses. That’s why a careful consideration of cost is important when deciding which Medicare plan to choose.

If you’re meeting with a Medicare advisor or planning to shop independently, a good place to start is by making a checklist of the services you need or want. Then, use Medicare’s Find a Plan tool to compare costs and benefits. For example, consider whether the doctors you see are in-network for the Medicare Advantage plans you’re considering. And if you travel frequently, check to make sure the Medicare Advantage plan’s network extends where you will be.

Also, if you’re planning to buy Medicare Part D to cover your prescription drug costs, it helps to have an idea of which medications you take and how much they typically cost. You can get this information from your pharmacist or by visiting the website of each plan you’re considering. Then, check the plan’s prescription drug list and drug-tier levels to see which plans have the drugs you need at the best price.

You can narrow down your choices by evaluating the Medicare Advantage providers in your area. For example, if you want to keep your upfront costs low, consider UnitedHealthcare, Aetna, or Cigna. Or, if you want more flexibility, Blue Cross Blue Shield may be the best choice for you. And, don’t forget to factor in the customer satisfaction ratings from J.D. Power, which are available for most Medicare Advantage plans. You may also be eligible for financial assistance programs that help you pay your Medicare out-of-pocket costs. Research income guidelines and apply if you think you qualify.

2. Coverage

Choosing a Medicare plan that is right for you requires careful consideration of the type and amount of coverage you need. The plans available include Original Medicare, Part C Medicare Advantage Plans that are approved by Medicare but run by private companies and Part D Medicare prescription drug coverage offered through private insurance companies.

Medicare Advantage plan options have continued to increase in 2022, with more plans available nationwide than ever before. The number of Medicare Advantage Plans that offer a prescription drug benefit has also increased. The number of Medicare Advantage plans that have no additional premium is also higher than in 2021, with 9 out of 10 beneficiaries having access to a Medicare Advantage plan that does not require an additional monthly premium (other than the Part B premium).

In addition to the many choices in Medicare Advantage Plans, there are many options for supplemental coverage, known as Medigap plans. These are private health insurance policies that help pay for services that Original Medicare and Medicare Advantage Plans don’t cover. Medicare Advantage Plans can have network restrictions, which may limit where you can get care. In addition, they can also have different cost sharing and copays than traditional Medicare.

Many Medicare Advantage plans are changing the way they do business each year. This is especially true of those Medicare Advantage Plans that are based on an employer group health plan. Some employers have stopped offering these plans, and the workers can choose to continue with their current Medicare Advantage plan or switch to another Medicare Advantage plan during a special enrollment period that lasts eight months after the group health plan stops offering the insurance or the worker’s employment ends, whichever comes first. Related to this is the birthday rule in california which you might want to read up on just in case.

3. Convenience

Whether you’re meeting with a health insurance company representative or researching independently, there are a few questions you should ask to help you get started.

First, consider the level of convenience offered by a Medicare plan. Traditional Medicare offers the most convenience because beneficiaries can see any doctor who accepts it and use any hospital or clinic in the country. They also avoid the hassles of prior authorization and can avoid high out-of-pocket costs for services that require a prescription.

Medicare Advantage plans are less convenient because enrollees must use providers designated by the plan, or pay more out-of-pocket for non-approved services. Medicare Advantage plans may offer extra benefits that traditional Medicare doesn’t, including vision, dental and gym memberships.

However, some Medicare Advantage providers use aggressive marketing techniques to sign up seniors and lure them away from their competitor’s plans. Some have even been accused of deceptive practices, such as sending mailers that look like government documents or letters. The federal government has promised to increase policing of Medicare Advantage plan marketing.

Consumer advocates recommend shopping for a Medicare Advantage plan by using the 4 Cs of coverage, cost, convenience and customer service. This is particularly important during the Medicare Open Enrollment Period, which runs Oct. 15 through Dec. 7 each year, when seniors can switch Medicare Advantage and Part D plans, or return to traditional Medicare.

It’s also a good idea to contact a national network of State Health Insurance Assistance Programs, which are federally funded and provide free unbiased assistance with Medicare selection. A licensed benefits advisor can answer questions and help you compare the options available in your area. They can also explain the effect of changing plans on your current supplemental health insurance and retirement savings.

4. Flexibility

Many Medicare Advantage plan enrollees also have access to supplemental benefits that can include dental, vision and hearing coverage. However, these benefits are often only offered through a specific provider network, so it’s important for enrollees to ensure their favorite providers are included before making a decision.

A new policy by CMS that allows plans more flexibility in how they organize their supplemental benefits is creating new options for people with Medicare Advantage plans. This type of flexibility has been sought by states for years. They argue that local health care is the best way to understand their residents’ needs and craft efficient, effective policies.

However, this new approach to flexible supplemental benefits could have some unintended consequences. In particular, it may undermine the critical beneficiary protections established through carefully constructed demonstration programs. Ultimately, it may lead to beneficiary confusion and inappropriate plan manipulation.

For example, this year some Advantage plans have begun to reduce their deductibles and copays for people who need certain services. While these changes are good for some, others face high out-of-pocket costs. In addition, a report this spring found that 13 percent of services denied by Advantage plans met Medicare’s coverage rules and would have been covered under traditional Medicare.

This is why it’s important to consider all your options carefully before choosing a plan for 2023. During open enrollment from Oct. 15 through Dec. 7 each year, or during the yearly Special Enrollment Period related to group health plan coverage (SEP), you can switch Medicare Advantage or Part D plans with new coverage starting Jan. 1. For more help selecting a Medicare plan that’s right for you, you can talk to a licensed Medicare enrollment advisor who meets NCOA’s Standards of Excellence.

5. Prescription Drug Coverage

As with other Medicare plans, you can choose a prescription drug plan (Medicare Part D) as a stand-alone option or as a benefit included in many Medicare Advantage plans. Each Medicare Part D plan offers a different set of benefits, and you pay a monthly premium for it in addition to any annual deductibles or copays you may have. Each plan also has a list of medications it covers, which is called a formulary. If your medication isn’t on a plan’s formulary, you or your doctor can request what’s known as a “formulary exception.”

Medicare’s national leverage as a program allows the insurance company to negotiate prices with healthcare providers, which lowers your costs and helps keep your annual out-of-pocket expenses low. This negotiated pricing is reflected in your copays and deductible amounts.

Some Medicare Advantage plans, like HMOs and PPOs, may have networks of doctors, hospitals and pharmacies that are preferred over those who aren’t in the network. These plans can vary in what types of health care services they offer and may include additional benefits that Original Medicare doesn’t, like vision and hearing.

If you decide to join a Medicare Advantage plan that doesn’t include prescription drug coverage, you can enroll in a stand-alone Medicare Part D plan during the open enrollment period each fall. However, you’ll pay a penalty if you join later than your Medicare initial enrollment date. The penalty is 1% of the average monthly premium for every month you’re late, and it applies for as long as you have Medicare. This is why it’s important to choose the right Medicare plan for you during your initial enrollment period or if you know you’ll have to join a Medicare Advantage plan later.

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