We're heading into Medicare's annual open enrollment period. Whether you're a new retiree or a current Medicare enrollee who wants to review your coverage, you only have from October 15th through December 7th to buy or change plans. To make sure that you're getting the coverage that you need, ask yourself these four important questions about any plans you're considering.
1. Are your doctors covered?
When you sign up for Medicare, you'll automatically be enrolled in Medicare Part A, which covers hospital visits and short, recuperative stays in nursing facilities. There are no premiums to pay for Medicare Part A.
Your doctor visits and other preventative care are covered by Medicare Part B. Medicare Part D covers prescription drugs. You'll pay monthly premiums for these plans based on your retirement income.
Some seniors purchase Medicare Part C, which are Medicare Advantage plans sold by private insurers. Generally, these plans combine Parts A, B, and D with additional coverage for things like vision, hearing, and dental.
Ask your primary care doctor and any specialists you see regularly if they accept original Medicare or Medicare Advantage. If you don't want to switch doctors, this will help you narrow down your options.
2. Are in-network pharmacies close by?
Many insurers have started to offer low-premium Part D policies with preferred pharmacies. Depending on your plan, you might be able to find a nearby pharmacy with lower copays, saving you both time and money.
Medicare enrollees who are leaning towards keeping their current plan should also review their coverage for any changes to drug tiers and copays that could affect the cost of prescriptions. You should receive an annual notice from your current plan near the end of September. If there's too much fine print to digest, contact Medicare, your private insurer, or a health care professional who can help.
3. Do you need flexibility?
Medicare Advantage plans can be less expensive than buying Parts B and D separately. But they can also be much more restrictive. Many Part C plans lock you into HMOs or PPOs. If you decide to move out of state, your Part C plan might not cover you anymore. Those same restrictions could be a problem if you plan on travelling a lot and need medical attention outside your coverage area.
Frequent travelers should also be aware that traditional Medicare only covers you in the United States. If you have overseas trips on your bucket list, you might want to investigate supplemental insurance policies.
4. What is your medical risk tolerance?
Medicare B, C, and D plans use the same calculus as other insurance plans: you'll have to pay higher premiums for better coverage. Is that coverage worth it to you?
If, early in your retirement, you're healthy, you exercise and eat well, and you use the routine check-ups that your coverage provides, a less expensive plan might be sufficient. You could dedicate the money you’re saving on premiums to an emergency savings account that will help you cope with surprises in retirement, like a sudden health issue or a home repair.
Folks with ongoing medical issues and significant prescription drug needs should prepare their retirement budgets for those higher monthly premiums.
And all retirees should plan for the things that Medicare doesn't cover, especially long-term care or in-home nursing that you could need later in retirement.
Outside of the open enrollment period, you're only allowed to make changes to your health care plan for very specific reasons, such as moving from your coverage zone. That's why it's so important that you make time to review your coverage before December 7th. If we can help answer any questions or put you in contact with a health care professional, please don't hesitate to get in touch.