Medicare open enrollment is about to close. Here's what to know.
Seniors have one more day to make changes to their Medicare plans, including picking a new Medicare Advantage plan, with open enrollment for the program closing at the end of December 7.
Medicare Advantage plans are increasingly popular with seniors, with nearly half of Medicare-eligible Americans opting for one of these private programs this year, according to the Kaiser Family Foundation. The typical enrollee has 39 different plans to choose from, which means choosing the right plan can be nearly overwhelming.
During open enrollment, seniors can also return to the original Medicare plans, also known as Medicare Part A and Part B, and pick a new Medicare prescription drug plan, or Part D. By comparison, Medicare Advantage plans typically bundle Part A, Part B and Part D into a single plan, and often dangle other coverage, such as dental or vision, to convince seniors to sign up.
Here are pitfalls to watch out for, according to experts, when choosing a Medicare Advantage plan that works for you.
Check your Medicare Advantage plan's providers
One thing seniors should do every year is check that their doctors — and prescriptions — are within the coverage network of their Medicare Advantage plan. Unlike traditional Medicare, Medicare Advantage functions like a private insurance plan, with in-network and out-of-network coverage.
Even if you're in a Medicare Advantage plan that you intend to keep, make sure to double-check your existing plan's providers since plans often change year-to-year, said Mary Johnson, Medicare and social security policy analyst for the Senior Citizens League.
"These are private insurers. They renegotiate their contracts every year with their providers, so providers can change — that includes pharmacies and prescription drug coverage," she said. "It would be very unrealistic to think that you can just sign up and sit on autopilot, but that's what the majority of the public does."
Often the fastest way to check is to call your provider's office, since online directories sometimes aren't up to date — and agents trying to sell you policies can give wrong information. "The best thing I would advise is to call the doctor's office and just confirm with them," Evan Tunis, president of Florida Healthcare Insurance, told NerdWallet.
Check your plan's drug coverage
Drug coverage is another important factor that could change year-to-year within Medicare Advantage plans, so seniors should verify what they'll pay for their prescriptions by going to medicare.gov, Johnson said.
Seniors on insulin should double-check that the brand of medication they take is covered under their Advantage plan. Starting next year, the price of insulin will be capped at $35 a month — but that price limit only applies to brands that fall under a plan's coverage.
"If the brand you take is Lantus, and they cover some other insulin, it could possibly be that you get into a mismatch," Johnson said.
Seniors can check coverage by inputting their drug information at medicare.gov.
Look at your out-of-network costs
One error Johnson sees often is seniors picking an Advantage plan based on low premiums or freebies, such as a grocery allowance.
"Nothing in life is free," Johnson said. "There are many Medicare Advantage plans that have a very low or even no premium; however, for virtually every service that people use, there is a copay."
Johnson advises projecting the worst-case scenario: If you get very sick and need an intensive medical procedure and many follow-up visits, what's the maximum you could expect to pay out of pocket? For 2023, that could be as high as $8,300 — or more if you go out of network.
On the other hand, many Medicare Advantage plans include vision and dental benefits, which traditional Medicare doesn't cover, so seniors will need to weigh which factors are most important to them.
While a plan without a premium could save money for someone who's healthy, you can't always predict if you'll get sick and need a lot of care.
"Older people tend to get sick and use services, so it's a gamble," Tricia Neuman, director of the program on Medicare policy at the Kaiser Family Foundation, told NerdWallet.
Take your time and be skeptical
During the current open enrollment period, which opened October 15 and ends December 7, seniors can switch from traditional Medicare to Medicare Advantage, or change the Medicare Advantage plan they're on. They can also switch back to Original Medicare.
It's not the only chance to make changes for seniors who are already enrolled in Medicare Advantage. People already in these plans can also switch their Advantage plan between January 1 and March 31, although they can only switch plans once during that time period.
But experts caution seniors against rushing into a Medicare Advantage plan with the hopes of saving money or getting freebies like gym memberships. First, deceptive marketing abounds — from insurance agents wrongly describing coverage and celebrity-filled TV ads touting benefits to marketing mailers disguised as "official" government mail.
Seniors "are being inundated with aggressive marketing tactics as well as false and misleading information," Sen. Ron Wyden's office concluded in a report last month.
Consider Medigap coverage
It's possible to switch from Medicare Advantage back to traditional Medicare during open enrollment, but seniors should also consider their Medigap coverage — formally known as Medicare Supplement Insurance. Seniors are first eligible for Medigap coverage when they turn 65 and enroll in Medicare Part B, which covers doctor's visits and outpatient care.
During a six-month open enrollment period when they first sign up for a Medigap plan, seniors can buy any policy they want, regardless of their health — but that happens only once. Seniors who sign up for an Advantage plan, then switch back to traditional Medicare, could find themselves paying much more for a Medigap plan — if they're offered one at all.
"In most states, insurers are not required to offer you a Medicare and Medigap supplement out of your initial coverage period, which is when you first enroll in Medicare," Johnson said.
The process can be confusing and overwhelming. "It's a real pain for the average person. You probably feel as frustrated going through this process as doing your taxes," Johnson said.
People who need assistance can turn to one of two resources:
The State Health Insurance Assistance Program, or SHIP, can match seniors with a navigator trained in Medicare who can go over the patient's needs and recommend plans. Seniors should also visit Benefits Checkup, run by the National Council on Aging, to see if they qualify for programs to help pay for medicine, food and other needs.