The Medicare Open Enrollment for period for 2013 begins October 15th and ends on December 7th of this year. This is the perfect opportunity to reexamine your Medicare plan and coverage to see if you are getting the best and most comprehensive coverage for your money. As time goes on, circumstances of your health and you financial situation change, and your Medicare plan may also need to change to accommodate these fluctuations. Changing your plan may provide you with better health care coverage and save you money at the same time.
What are the types of Medicare coverage?
Generally, Medicare coverage falls within one of two categories: Original Medicare and Medicare Advantage Plans. Under Original Medicare, Part A benefits (i.e. inpatient hospital, nursing home and home health care) and Part B benefits (i.e. hospital outpatient, doctors’ visits, and ancillary services) are paid on a fee-for-service basis directly by the government. Typically, there is no premium for Part A benefits, but there is a deductible before coverage begins. Beneficiaries usually pay a premium for Part B benefits, along with a co-payment or coinsurance for covered services. Beneficiaries are not limited to any specific providers from which they may receive care, as long as the health care provider accepts Medicare. Those who have Original Medicare are also eligible to enroll in a Medicare Supplemental Insurance Plan, or Medigap Plan. This supplemental insurance generally covers out-of-pocket deductible and coinsurance payments.
Medicare Advantage Plans provide the same coverage as Original Medicare, but through private insurance companies approved by Medicare. Beneficiaries usually pay a monthly premium for Part A and Part B services, in addition to a Part B premium, and a co-payment or coinsurance for covered services. Unlike Original Medicare, however, most plans require beneficiaries to use plan doctors, hospitals and other providers. Some Medicare Advantage Plans are more restrictive than others, both geographically and with regard to the scope of providers. Beneficiaries enrolled in a Medicare Advantage Plan are not eligible to participate in a Medigap Plan.
In either case, beneficiaries who take prescription drugs will need to enroll in a Part D, or prescription drug, Plan. In many cases, Medicare Advantage Plans will also have Part D coverage; however, beneficiaries enrolled in Original Medicare, have to purchase Part D coverage separately.
How do I know if I should change my plan?
As mentioned above, most everyone’s health and financial circumstances change from time to time, and your health care coverage should keep up with such changes. For example, if you have recently been diagnosed with a condition that requires specialized care, and you want to have unlimited access to specialized health care providers, Original Medicare may be a better option for you. If you are currently in a Medicare Advantage Plan, now would be the time to switch to Original Medicare. Similarly, if you require a lot of referrals to specialists, Original Medicare may be a better option for you.
In addition, if you are in a Medicare Advantage Plan, and you take many expensive prescription drugs, your Plan’s Part D coverage may not provide the most comprehensive coverage. Moreover, Part D plans often change their formularies – the list of drugs that they cover and the coverage amounts. In such cases, you may want to shop around for other Part D Plans that could provide better coverage and perhaps save you hundreds of dollars.
Another issue to consider is whether you live in different states during certain times of the year. Under Original Medicare, this would not be an issue because you can receive care from any participating Medicare provider. On the other hand, if you are currently enrolled in a Medicare Advantage Plan, your health care might not be covered in the second state, or you might have to pay more out-of-pocket costs for care provided in another state. There are, however, some Medicare Advantage Plans that accommodate beneficiaries who live in different states during different times of the year. It is important to examine your plan to make sure you have appropriate coverage for these circumstances.
On the other hand, if you do not travel frequently, are satisfied with the medical care you are receiving, and access to your health care providers is convenient, you may want to stay with, or switch to, a Medicare Advantage Plan.
Finally, your financial situation should be considered. Under most circumstances, especially when you are healthier, you may incur less out-of-pocket costs with a Medicare Advantage Plan. In other cases, however, Original Medicare may be a better option financially. The issues discussed above will often be the determining factors as to which type of plan will offer the most cost savings.
Where can I get more information?
Medicare has many resources available to beneficiaries to help them navigate through the Open Enrollment process. Visit http://www.medicare.gov/publications to view the fact sheet “Understanding Medicare Enrollment Periods” and for additional information.
