November 23, 2021
Need Help Choosing Your Medicare Options?
This blog is for the procrastinators. The last day of Medicare open enrollment for people who want to switch their Medicare Advantage or Part D insurance plans is Dec. 7.
The hoopla around this open enrollment period can be confusing, because Medigap supplemental plans are on a different schedule. The optimal time to buy a Medigap plan is during a six-month window after your 65th birthday, which is the only time insurers are required under federal law to sell you a Medigap policy. Switching to a different Medigap plan during the current open enrollment is trickier, because you can be denied coverage, though several states have made it easier to enroll or switch from Medigap or Advantage to a new Medigap plan.
Retirees with Advantage or Part D plans can freely change plans during open enrollment but are usually reluctant to shop around. But insurance experts warn that the terms of existing policies can change, and this is the time to see if there’s a better deal out there. The Kaiser Family Foundation said retirees have a record number of Advantage plans to choose from for 2022 – double the number available five years ago. But this can be a double-edged sword if choices sow confusion.
If you haven’t plunged into researching your Advantage or Part D options, the resources listed below can help.
Free counselors. Every state has a counseling program to explain the Medicare options. The counselors are free, and this website lists every state with a link to that state’s contact information. Although volunteer counselors may not be as knowledgeable as insurance brokers who sell the policies, many volunteers are former health care professionals or are themselves enrolled in Medicare and know the system.
Federal plan finders online. Choosing the right Part D plan for your particular suite of medications is complicated, and retirees often make costly mistakes. That’s why the Centers for Medicare and Medicaid Services has a website to help retirees choose the best drug plan. You might want to recruit a family member to help you sort through your options. The same website can also help with finding an Advantage plan.
Online information. The Kaiser Foundation is a reliable source of information about Medicare, starting with its answers to frequently asked questions. The National Council on Aging provides information about Medigap, and this website lists the states with looser enrollment periods for Medigap.
Insurance agents. This blog would never advise you to call a specific broker, but many have brochures that explain the basics. This free Retire Guide describes Medigap and Advantage Plans.
Here’s a short list of previous Squared Away blogs about Medicare:
- Enrollment Trends in Medicare Options
- Medicare Advantage Shopping: 10 Rules (Be aware the list of rural counties that do not sell Advantage plans has changed. Here is an update – see Figure 5.)
- Part D: More Retirees Face High Drug Costs
Squared Away writer Kim Blanton invites you to follow us on Twitter @SquaredAwayBC. To stay current on our blog, please join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here. This blog is supported by the Center for Retirement Research at Boston College.
For what it’s worth, another resource to consider is a for-fee, Medicare consultant. Sixty-Five, Inc., out of Milwaukee, WI would be an example. They, and perhaps others like them, do not sell insurance, they sell their advice. Another alternative is to look for financial advisors with expertise in this arena. I believe there are courses/certifications in the Medicare and Social Security educational space for advisors.
The expected payout on any insurance policy, Medigap policies included, is less than the premium paid – otherwise insurers would go bankrupt. Given that Medicare protects against catastrophic losses, for all but the most risk averse, Medigap makes about as much sense as bicycle insurance. You shouldn’t insure against small but predictable losses. What you haven’t mentioned in your article is Medicare high deductible plans – Medicare Medical Savings Accounts – which function similarly to HSAa and make sense for people who are healthy and risk tolerant.
Your advice may make sense for those who can afford exposure to unlimited out-of-pocket costs for Medicare Part A and B. But for everyone else, they are wise to choose either Medigap or an Advantage plan. Both options effectively place a cap on annual medical costs.
Just because an insurer collects more premiums than benefits paid doesn’t make it a bad choice for the consumer. Not everyone can afford to self-insure.
Many councils on aging have SHINE counsellors, who are often retired doctors and nurses, who have been trained to advise elders on their benefits. For the do-it-yourselfers, the guidance on Medicare’s website is not bad. It is critical if you are opting for an Advantage plan to be sure you are not losing access to a trusted doctor(s) or to a specialty hospital where you have been treated.
So they raised the Part D premium 21.50 per month for Medicare people in the US on the 48 Million people enrolled. If one makes as much as 91k or less the new premium is 170.50 per month up from 148.50. The explanation was that Alzheimer’s caused this change. If one calculates the 258 dollars increase per year times 48 million enrollees it equals 12 billion per year. There is no way that treatment after insurance will reach that level. It’s all in the numbers.
The biggest mistakes I see by those with Medicare are:
a) Failing to shop Part D drug coverage, especially if you use brands or other expensive drugs. Some generics run $300 a month or more. Don’t assume your current plan will again be your most cost-effective pick for 2022.
b) Not understanding the Medicare enrollment season does not extend to Medicare Supplemental (Medigap) plans. It only extends to Part C and Part D coverage.
c) Not understanding you may not be able to get a Medicare Supplement without “medical underwriting” if you give one up to enroll in a Medicare Advantage plan.
d) Not understanding that when you enroll in a Medicare Advantage plan, that plan is now responsible for payment of your services, not Original Medicare.