If you are on Medicare, you are facing a quickly approaching deadline and making changes could save you thousands of dollars. My partner, Kimberly Reynolds, MS, CFP® gives tips on how to research and find the best plan for you in 2017.
Stewart: What is the deadline to make changes for 2017?
Kimberly: Medicare open enrollment began on October 15th and ends on December 7th.
Stewart: What are your options with Medicare?
Kimberly: For your Medicare coverage, you have two main choices:
- Original Medicare. With Original Medicare you will want to add a Medicare Supplemental (Medigap) plan and a Part D Prescription Drug Plan. This option is best if you want to pay a set monthly premium and have little or no out-of-pocket cost throughout the year for medical. You will have copays/deductibles with Part D prescription plans. It is advantageous for people to choose this type of coverage when they travel outside of Alabama and for people who want to choose their doctors without needing referrals or being restricted to doctors within a plan network.
- Medicare Advantage Plan. With Medicare Advantage Plans you combine Part A, Part B and usually Part D coverage and these plans act as a HMO or PPO. Depending on what plans are offered in your area you can have the choice of a plan with no or very low premiums. With Medicare Advantage plans you share the costs of your medical and prescription care. For example, you will have doctor copays and deductibles each time you see your physician or go to the hospital. Each plan has a different maximum out-of-pocket cost so you should carefully compare the Advantage Plans available in your area for the amount you would pay for copays, deductibles and annual maximums. You also need to check with your physician to ensure he/she accepts your plan. These plans are best if you are healthy and rarely visit the doctor and you are comfortable knowing you’ll share the costs of all doctor and hospital visits.
Stewart: How do you research the Prescription Part D plans and determine the one that is best for you?
Kimberly: If you are choosing a stand-alone drug plan with original Medicare then be sure to carefully review your prescriptions and choose the best plan that matches your needs. Part D plans can change their formulary each year so you want to be sure your prescriptions are covered by your plan. Also be aware of each plan’s preferred pharmacies where drug pricing can be much lower than non-preferred pharmacy pricing. Be careful when identifying whether you take the brand or generic prescription drug because this can make a significant difference in your drug costs. Some individuals have saved $25 to $50 per month just on their Part D premium by switching to a plan that best fits their needs. But that’s only part of the story… having the wrong plan could cost you thousands in out of pocket drug costs.
Stewart: Do you have any options to change plans outside of open enrollment?
Kimberly: If you are unsatisfied with the plan you choose for 2017, Medicare has one option to switch plans outside of the open enrollment period, limited to one change per year. It is called the 5-Star Special Enrollment Period. You must have a 5-star plan available in your area to be eligible for a change during the 5-Star Special Enrollment Period. You can see the details, plans and ratings at www.medicare.gov/find-a-plan.
Also, Medicare does allow you to make a change if you have certain special circumstances such as you move to another area or your plan changes its contract with Medicare. You can see a full list of special circumstances at www.medicare.gov.
Stewart: Why is it important for people to review their plans each year?
Kimberly: Remember you can save thousands of dollars per year in some cases by carefully choosing plans based on your specific health and financial situation. Your best research tool is Medicare’s website www.medicare.gov where you can input your personal data and they’ll help analyze which plan is best for you.