Why is figuring out Medicare so difficult? We suspect, in part, it’s because you are expected to look into a crystal ball and know precisely how healthy you will be during the next 12 months. Will you need expensive prescription drugs next year, even if you don’t now. Will you need physical therapy, get sick while you are out of the country or decide you’d like to see a doctor outside of your HMO?
The short answer is: How should you know? And that’s where the frustration comes in.
The National Council on Aging (NCOA) has a checklist, that we’d like to amend ever so slightly, that is a good start on making your best-educated guess.
1. Watch the mailbox.
Before open enrollment, Medicare beneficiaries are supposed to receive by Sept. 30 an Annual Notice of Change (ANOC)/Evidence of Coverage (EOC). They also get a Medicare & You handbook. The ANOC lists the changes in the plan, such as the premium, co-pays and drug formulary. The ANOC compares plan benefits in 2017 with those in 2016 and are a starting point to figuring things out during open enrollment period. If you put yours in the pile of things you intend to deal with later, please be advised that “later” is right now. You have to have all this done by Dec. 7, which is indeed a day of infamy.
2. Gather personal information.
Knowledge is power. In order to evaluate whether the plan coverage you presently have is still appropriate, you need to know how it worked for you in the past and whether key parts of it are changing. So, to start you need to compile a list of your prescriptions, your doctors and providers, and figure out what you spent last year on health care fees and copays. Take note of when you had to pay through the nose because Medicare didn’t cover something. Now check your list with that notice of change you got (ANOC) and see what won’t be covered again. Take your time. Picking the wrong plan can be costly.
3. Comparison shop.
This is the step where many throw their hands up in despair. In most states, there are at least 25 Medicare Part D plans to choose from, and in some states as many as 40 Medicare Advantage plans are available, says NCOA. Just as a refresher: Part D is for prescription drugs. Medicare Advantage plans cover everything but hospice; in some cases they even cover vision and dental care.
There are two main ways to get your Medicare coverage. Original Medicare ― Part A for hospital stays and Part B for medical services delivered outside a hospital; or you can get a Medicare Advantage Plan, known as Part C. Some people get additional coverage, like Medicare Part D (prescription drug coverage) or Medicare Supplement Insurance (Medigap).
Before you give up, know that you can get personalized health insurance counseling at no cost to you from your local State Health Insurance Assistance Program (SHIP). Make an appointment early, says NCOA, because availability can fill up quickly.
4. Establish order to the madness.
Now that you’ve done all your research about what it will cost you, your first decision is whether you want Original Medicare or a Medicare Advantage Plan. Next, decide if you want prescription drug coverage (Part D). Lastly, determine if you want supplemental coverage ― Medigap. This page will walk you through it, but you still have to decide which specific company’s plan works best for you.
5. Look ahead.
Oh no, you’re not done just because Open Enrollment closes on Dec. 7. It’s important to understand when new coverages take effect and to watch for another round of paperwork in the mail ― this one about your 2017 coverage.
Broadly speaking, the latest Medicare Trustees Report predicts that Part B monthly premiums will increase to approximately $150 or more for about 30 percent of beneficiaries. The out-of-pocket deductible will jump from $166 to $204 ― tied to the cost of living adjustment (COLA) in Social Security benefits, which will go up 0.3 percent or about $4 per month.
Part B and Part D premiums are expected to increase for people with higher incomes ($85,000/year for individuals and $170,000/year for couples). Those who did not enroll in Part B or D when they first became eligible will pay higher premiums because of penalties.
Average prescription drug plan premiums should remain stable at about $34/month (up from $32.50/month in 2016).