It's time for one of the more confusing rituals of the retirement years: Medicare open enrollment.
If you like your current plan, it might be tempting to leave things alone for another year, but experts say that's not a good idea. Insurers tweak Medicare Advantage plans all the time, and depending on your needs, these changes can cost you money or leave you unable to see your favorite doctors.
Even in traditional Medicare, it's a good idea to reevaluate your drug plan because insurers may change which drugs they cover or the co-pays they charge.
"It could always be valuable" to review your position, said Jack Hoadley, research professor emeritus at the School of Public Policy at Georgetown University. "There may be new offerings that are less expensive."
Open enrollment – the one time of year most people can switch plans — is Oct. 15 through Dec. 7.
Unfortunately, there are no blanket statements when it comes to Medicare, the government health plan for seniors and the disabled. What's right for you will depend on your income, health needs and desire for choice when it comes to doctors and hospitals. Broadly, consumers often — but not always — are choosing between lower upfront costs and access to more providers. If you get really sick, deductibles, co-pays and fees to see out-of-network specialists can add up fast in plans with low premiums.
Unlike employer-based insurance, Medicare offers lots of choices — some say too many. It can feel overwhelming.
"It's a very fraught decision and nobody ever complains that there's not enough choice," said Christine McBennett, manager of Philadelphia's Apprise program, which provides free Medicare counseling.
Members of Penn's Village, the Philadelphia nonprofit that helps residents age in place, gathered recently to learn to use the web to choose drug plans. Richard Salkowitz, a retired employee benefits manager, walked them through comparisons on the government's medicare.gov site.
After a question about co-pays at preferred pharmacies, Linda Brick looked a little exasperated. "This is a nightmare, you know that," she said as others nodded in agreement.
Advantage plans are growing
People make what is perhaps the most important choice when they sign up for Medicare Part B.
That's when they first decide whether to sign up for traditional Medicare or Medicare Advantage plans. Traditional Medicare offers the biggest choice of doctors and hospitals — almost all of them — but has some expensive gaps. Most people also purchase supplemental "Medigap" policies to cover Medicare cost sharing and prescription drugs. Those typically cost $150 to $200 a month, McBennett said. That's on top of the monthly fee — it was $134 a month for most people in 2017 — for Medicare Part B coverage for doctor visits and outpatient care. (If your income qualifies you for Medicaid, or you have health insurance in retirement from a former employer, your costs will be different.)
The alternative is Medicare Advantage plans that often cover medical care and drugs at lower premium costs than traditional Medicare and supplements. But these plans, administered by private insurers, often give subscribers fewer choices about which doctors and hospitals they can use, with steep financial penalties if they go outside the network. People in these plans pay more for deductibles and co-pays than people with Medigap plans. Advantage plans may cover such things as vision and dental care or hearing aids, which traditional Medicare doesn't cover.
You can switch back and forth between Advantage plans and traditional Medicare every year, if you like, but there's a catch. If you sign up for a Medigap plan within six months of enrolling in Part B, your pre-existing health problems don't count against you. If you wait and try to buy a Medigap supplement later, pre-existing conditions could make such insurance too expensive or completely unavailable.
If your health stays good, though, you may still benefit from shopping for Medigap plans every few years, said James Long, an Eagleville insurance agent who specializes in helping clients choose Medicare coverage.
"Insurance companies love complacency," he said, explaining that people who don't look for a better deal may spend more than they need to. Further, he said, he has found that preexisting conditions are not always a barrier to getting a better deal, because "more people pass medical underwriting than you would think."
Enrollment in Medicare Advantage plans grew by 71 percent between 2010 and 2017. A third of people with Medicare now have Advantage plans. New Jersey is well below the national average at 21 percent, and Pennsylvania is above it at 41 percent.
The government has online tools to help people see which plans cover the drugs they take. It also has a star-based rating system that can help you evaluate some aspects of quality.
Understanding physician and hospital networks can be trickier, said Gretchen Jacobson, a Medicare expert with the Kaiser Family Foundation. Her study last year found that 40 percent of plans in areas with a National Cancer Institute-designated cancer hospital did not include the center in their network. Those are generally considered top-of-the-line hospitals that are more likely to have pioneering research.
Her latest report found that many Medicare Advantage advantage subscribers are in "narrow" networks that give them access to less than 30 percent of physicians in their counties.
Long said some of his customers care more about convenience than anything else. Some will tell him: "I'm 80 years old and I'm just not going to go to the University of Pennsylvania."
It's also not easy to project what costs in Advantage plans will be, especially at a time in life when health tends to deteriorate. Costs are predictable with traditional Medicare and supplemental plans – you pay more each month, but you know you're covered fully. With Advantage plans, the more often you go to the doctor, the more often you'll likely have co-pays.
Here are some questions you should be asking as you make this year's decision, based on input from Hoadley, McBennett, Long, Jacobson, and Donna Uhler, RSVP Apprise coordinator in Montgomery County, as well as Jean Sung, senior strategic policy advisor for the AARP Public Policy Institute:
- Have you read the Annual Notice of Change from your current insurers?
- How much discretionary income do you have each month? If it's low, it might limit your choices or help you qualify for assistance.
- What is the total cost of the plans you're considering? Don't just look at the premiums. Try to estimate what you'll spend in co-pays. Compare deductibles. If you know you need an expensive procedure, such as a knee replacement, include that in your cost estimate.
- How important is it to keep your current doctors? If that matters to you, make sure they are included in a Medicare Advantage plan's network.
- How is your plan going to cover a serious illness? If you want access to research hospitals, check to see if NCI cancer centers are in the network. You may also be interested in where you could get neurological, heart or orthopedic care. Make sure you know how much it costs to go out of network for specialists. Long suggests that you check out how the plan covers outpatient surgery, hospital stays, durable medical equipment, chemotherapy, and skilled nursing stays.
- Are the drugs you take covered? Compare co-pays and note whether any plans require prior authorization. Pay special attention to the "tiers" under which your drugs are covered.
- Have you looked at the star ratings for Advantage and drug plans you are considering? The government gives plans up to five stars on quality measures. Some of what it considers may not be important to you, but Hoadley suggests digging deeply into the ratings to learn about complaints, customer service and drug pricing. "If I suddenly see a cheaper plan that's only got two stars, that's a red flag for me," he said.
- Do you spend a lot of time in other parts of the country? If so, you'll need to know how plans with narrow, local networks would handle your getting sick somewhere else.
- What does your doctor think? Ask your doctor whether he or she has had experience with the plan you are considering. Does your doctor intend to stick with it for the foreseeable future.
- Will using this plan be convenient? Check which pharmacies you can use and whether there's a mail-order option. See how far you'd have to go for a network hospital and where you'd be sent for imaging and blood tests.
For more information: 1-800-MEDICARE (1-800-633-4227) or Medicare.gov
For Pennsylvania residents, the toll-free Apprise Helpline is 1-800-783-7067. All services are free and confidential.
Contact the State Health Insurance Assistance program in New Jersey online or by phone at 609-894-9311, Ext. 1494 in Burlington County, 856-858-3220 in Camden County, and 856-468-1742 in Gloucester County.
Ralph and Carolyn Kibblehouse were well-prepared when they came for their annual open-enrollment meeting with James Long, an insurance agent in Eagleville.
As he has for each of the last seven years, Ralph Kibblehouse had studied the Medicare-related mail piling up at his house.
"He just reads and reads," Carolyn Kibblehouse said. "He drives me nuts sometimes."
Even so, the Collegeville couple, both 72, wanted feedback from an expert before making this big, confusing decision. This year, they have 27 Advantage plans to choose from. They care about price, but they also want to make sure they can see their doctors and get good drug coverage.
"It's a very active market," Long told them, adding that there will be six or seven new plans in Montgomery County in 2018.
The Kibblehouses currently have Advantra Silver, which has no monthly premium. They really like it.
"So we're going into this with the thinking that someone else has got to knock our socks off to jump ship," Long said. They nodded.
The couple has fewer medical problems and medications than many Medicare enrollees, factors that can make decisions more complex. Between them, they take just six prescription drugs, most of which are relatively cheap. They order the exception, Carolyn's Zetia for high cholesterol, from Canada. She had a heart attack 17 years ago, but has no big health problems now. He has had two knees replaced and takes medicine for diabetes, allergies and high blood pressure. He has a hernia operation coming up and knows his co-pay: $395.
Long saw that that co-pay will go down next year and that Walgreens, which the Kibblehouses like, will no longer be a preferred pharmacy at Advantra. At first, they were disappointed, but agreed they'd rather switch to another retail chain than use a mail-order pharmacy.
They want Phoenixville Hospital in their plan's network. Long checked to make sure all their doctors, especially their primary-care doctor, Robert Talamo, were still in network, and threw out some cost numbers. They don't want higher monthly payments and balk at percentage-based co-pays for hospital stays. Long understood. "A lot of people don't like that mystery number, that percentage," he said.
After more than an hour of discussion, they were down to Advantra Silver and a Health Partners plan. Each was lower for some co-pays and higher for others. There's no way to predict how much care the couple will need next year.
Long made them printouts to study at home. Ralph wanted to do one more piece of research on his own: He'd call Talamo and ask what he thought.
To prevent identity theft, the government will begin mailing new Medicare cards to enrollees next April. The new cards will not include Social Security numbers, sex, or a signature. They will not affect benefits.