Just like when we had jobs, retirees have an open enrollment period for health insurance. The period during which people can change their Medicare plans started October 15 and will end December 7.
I switched from employer insurance to a less-costly Medicare policy while still working, and 2017 will be my third year on Medicare. The only premium I pay is the one the federal government charges all Medicare enrollees — its part B monthly premium ($121.80 in 2016).
I’m among the nearly one-third of Medicare recipients who have chosen Medicare Advantage plans instead of traditional Medicare. Enrollees in traditional Medicare buy supplemental (“Medigap”) policies to cover the
20 percent Medicare doesn’t, as well as drug policies. Medicare Advantage plans combine all coverage into one package. They are offered by private insurance companies that the government subsidizes for the service.
Premiums for Medigap and drug policies vary with the level of coverage. With a Medicare Advantage plan that charges no extra premium, I’m saving hundreds of dollars a year, probably close to $2,000.
So, what’s the catch?
Most Medicare Advantage plans, including the one I’m in, are HMOs. Anyone who has strong feelings about the restrictions of HMOs won’t want a Medicare Advantage plan.
None of the three highest-rated hospitals in Chicago — Northwestern, the University of Chicago, or Rush — accepted HMO insurance when I enrolled in Medicare. I chose a doctor in the Advocate network. If I need a referral, the choices would be limited to that network. If I were hospitalized, it would be at Advocate Illinois Masonic — a well-regarded hospital but not in the league with the three biggies.
Since I like my doctor and haven’t been hospitalized, I’m happy so far. More than happy about one benefit, the $2,000 allowance toward hearing aids. My hearing aids cost me less than $11. I also get a free annual eye exam. Dental coverage has been upgraded for 2017, so I may drop enrollment in my former employer’s dental HMO.
I don’t intend this to be an ad for Medicare Advantage or for my plan, and that’s why I’m not naming the plan. This post is intended to provide information for people nearing retirement or already retired whose knowledge about Medicare Advantage is sketchy.
I can understand not choosing Medicare Advantage. A good friend who retired this year went with traditional Medicare because she has chronic health problems and established relationships with physicians. I think she made the best choice for her.
Insurance salespeople say that Medicare Advantage plans appeal to healthier, younger seniors. As people age and have more health problems, the plans may not be as cost effective. Medicare Advantage plans charge a copay for hospitalization — $200 a day for the first week of every hospitalization with my plan. Frequent hospitalizations cut into the money saved on premiums.
You can search for Medicare Advantage plans at Medicare.gov. You’ll need to enter your prescriptions to get accurate results. A search for “Medicare health plans with drug coverage” in my zip code returned two dozen plans, many without monthly premiums. Here are some things to look at in comparing plans:
• Medications. You’ll want to make sure your medications are on the plan’s formulary, and if so, how much you will pay for them. (You’ll find this out if you entered your drugs in the search criteria.)
• Premiums and deductibles. Not all Medicare Advantage plans have $0 premiums and deductibles.
• The annual out-of-pocket spending limit. Medicare Advantage plans have annual maximums on out-of-pocket spending — $3,400 for the plan I’m in — which most Medigap policies do not.
• The star rating. Medicare scores how well Medicare Advantage plans perform with a rating of 1 to 5 stars in several categories and overall. It considers plans low performing if they have fewer than three stars for three years in a row.
• D (dental), V (vision), and H (hearing) benefits, if any. Many Advantage policies offer bonus benefits such as these, but check to see what exactly is included.
If you’re considering a Medicare Advantage plan, you should also make sure that your preferred providers are in its network.
You’ll notice both HMOs and PPOs on the Medicare.gov list. PPOs have the plus of doctor choice (although out-of-network providers cost more). For most PPOs, there are monthly premiums, and the out-of-pocket spending limit is higher than that for an HMO. I haven’t compared the cost of Advantage PPOs with Medigap plans.
Whatever your Medicare coverage, it’s a good idea to check for changes during the annual open enrollment. It’s especially important to make sure that your doctors are still in the plan network.