Each year from October 15th to December 7th, Medicare opens a window for enrollees to change their options for insurance that works with Medicare, including drug plans, supplemental Medigap insurance, and Medicare Advantage plans.
Medicare Advantage Plans have been gaining popularity, in part because of their simplicity and cost containment features, and in part, no doubt, to their massive marketing campaigns. They are different from Medigap policies, which cover some of the out-of-pocket costs Medicare doesn’t pay for. A Medicare Advantage plan contracts with Medicare to provide both Part A (hospitalization) and Part B (medical services and supplies), and most also provide coverage for Part D (drugs). Advantage plans function like preferred provider organizations (PPOs) or health maintenance organizations (HMOs), offering patients a network of providers they can work with and a list of drugs eligible for the plan.
While many retirees are happy with their Medicare Advantage coverage, the plans do have some potential pitfalls you should be aware of.
Many policy holders assume that once they’ve selected a plan, they’re done. But Medicare Advantage plans tweak their provider and drug coverage lists from year to year. If you go on autopilot and ignore the annual letter from your Medicare Advantage provider, as many people do, you might find yourself with skyrocketing out-of-pocket costs. Next year, the prescriptions you’ve been taking may no longer be covered, or your preferred provider may not be on the list. While some Advantage plans cover out-of-network providers at a higher fee, others don’t cover them at all.
In addition to checking your Advantage plan’s provider and drug lists, you should use the government’s Medicare Plan Finder tool to do some comparison shopping. Even if your plan still provides everything you need, you may be able to lower your monthly premiums and out-of-pocket costs by switching to a different Medicare Advantage plan.
The fall enrollment period is also a good time for those who have Medigap supplemental policies to review their coverage to make sure their needs are still being met and they’re getting a good deal.
If you want to learn more about traditional Medicare and Medicare Advantage plans, Kiplinger provides a good place to start with these two articles: Retirees, Avoid These 11 Costly Medicare Mistakes and 8 Steps to Picking the Right Medicare Plans During Open Enrollment.