If you’re on the road to choosing a Medicare plan, start with this list of essentials to help guide you down the path. Remember, Open Enrollment ends Friday, December 7th.
1. DON’T choose based on a friend’s experience.
It’s tempting—and so easy—to listen to advertising or ask a friend for advice, but picking a plan that way isn’t smart. A better strategy is to take the time to carefully examine the specifics of different plans. “Really look at the coverage details for each plan, and how they’ll work,” says health insurance expert Louise Norris, a contributor to Healthinsurance.org and Medicareresources.org. “Reach out to someone who can help you—a Medicare benefits broker who represents many different carriers will be a good source of information, as will your State Health Insurance Assistance Program (SHIP).” Norris mentions one particularly important thing to figure out: “which decisions will impact you long-term (like not enrolling at all, or picking the wrong Medigap plan, for example), versus which ones can be changed during annual open enrollment (the specifics of your Part D or Medicare Advantage plan, for example).”
2. DON’T wait to sign up.
Beware the penalties of not enrolling in Part B and Part D when first eligible. “You get stuck with penalties forever,” says Norris, unless you have creditable coverage from your current employer or your spouse’s current employer. The penalties are:
- Part B (medical coverage including doctor visits and outpatient treatments): Your premium will go up 10 percent for each 12-month period you could have been covered but weren’t enrolled. These higher premiums apply for life. Here’s a great article to learn more about Part B penalties.
As for Medicare Supplement Insurance (also called Medigap), if you enroll when you are first Medicare-eligible at age 65, you cannot be denied coverage. If you wait, you may not be able to qualify for coverage later, or the cost of the coverage could be considerably higher.
3. DO pick a prescription drug plan based on the medications you take.
Making sure the prescription drug plan you’re interested in covers all your medications is crucial. Each prescription drug plan has a list called a “formulary,” which tells you which drugs are covered under that plan. You’ll also want to know the cost of those medications under the plan. “Everyone has different prescription needs, so it’s essential that enrollees go through the process of inputting their specific medications into a plan finder tool and then looking to see the total out-of-pocket estimate is for each plan,” says Norris. You can find a great prescription drug finder tool here.
“If you don’t take any medications at all, picking the lowest-cost plan is probably a good bet,” advises Norris. “You’ll have a chance to switch plans annually, but you’ll avoid a late enrollment penalty that would otherwise happen if you opted out of Part D altogether during your initial enrollment period.”
4. DO consider whether you want to keep your doctor.
If your doctor is important to you, talk to him or her before choosing a Medicare plan.Not all doctors accept Medicare, so it’s good to know that it advance. If you are considering a Medicare Advantage Plan that offers in-network coverage, make sure your doctor is part of that network.
5. DON’T assume you’ll automatically be signed up.
If you are already receiving Social Security benefits, you will automatically be enrolled in Orignal Medicare (Parts A & B) when you turn 65, and will receive your Medicare Card in the mail three months before your 65th birthday. (Coverage begins the first day of your birthday month.) However, if you are not receiving Social Security, you will have to enroll yourself during a seven-month enrollment period that encompasses the three months before your 65th birthday, the month of your 65th birthday, and the three months following. To enroll in Medicare, click here.
6. DON’T think that everything is covered.
“A big belief is that Medicare will cover long-term care costs,” says Norris. “It won’t, which can leave some seniors in a very tight spot financially.” Original Medicare also does not typically cover nursing home care, dental, vision, hearing, and alternative therapies. For a list of everything Original Medicare does not cover, click here.
7. DON’T assume Original Medicare coverage is enough.
For some people, Original Medicare coverage (consisting of Part A, hospitalization, and Part B, doctor visits and outpatient treatments) is perfect. However, Part A and Part B have coverage limitations. “If you stick with just Original Medicare, you won’t have any coverage for outpatient prescriptions, and you won’t have any cap on your out-of-pocket costs, which can be problematic if you need a lot of care,” says Norris. If you’re looking at Original Medicare, you’ll need to also choose a Prescription Drug Plan. And if you’re looking for coverage that caps your spending, look into Medicare Supplement/Medigap plans, which cover the 20 percent Original Medicare doesn’t cover. You can also look into Medicare Advantage Plans, which offer in-network coverage and cap costs at $6,700 annually.
To learn more about the ins and outs of Medicare, check out our complete Guide to Medicare here.