Medicare open enrollment starts October 15. Should you change plans?

• More than 60 million seniors are expected to switch or renew their Medicare coverage when open enrollment begins on October 15.
• Experts urge consumers to monitor the changes coming their way, especially for Medicare Advantage plans and Medicare Part D, which covers prescription drugs.
• The federal government has launched a revamped online tool that may help simplify the process.

Medicare open enrollment is just around the corner and with it comes the annual dose of confusion.    

Starting October 15 and ending December 7, Medicare beneficiaries will have a chance to change plans or stick with their existing coverage. Because plan costs and benefits change often, it is important for consumers to evaluate all their options each year.

Medicare users also need to watch for significant Medicare rule changes for 2020, including expansion of Medicare Advantage benefits, an increase in out-of-pocket drug costs and an updated version of  Medicare Plan Finder, the popular government-sponsored tool that allows people to compare Medicare plans online.

If you or a loved one is shopping for Medicare this fall, here's what leading Medicare experts suggest you keep in mind in light of the current changes.

Original Medicare vs. Medicare Advantage

In many cases, the first step for Medicare beneficiaries is choosing between original Medicare and Medicare Advantage. 

Under original Medicare, hospitalization and doctor visits are covered by Part A and Part B, respectively. Recipients pay a monthly Part B premium ($135.50 in 2019 for most people) and 20% co-pays for covered services after a deductible limit is met. With original Medicare, recipients can go to any provider who accepts Medicare. There are no network restrictions.

Most people who sign up for original Medicare also purchase a Medicare Part D prescription drug plan and many also buy Medicare Supplement Insurance (also known as Medigap) to help defray out-of-pocket costs.

Medicare Advantage plans, which are sold by private insurers, offer the same A and B coverage for the same premium but also often include Part D prescription drug coverage and additional benefits such as limited vision and dental care. The additional premiums for these extra services, typically modest in cost, have decreased in recent years. To keep prices down, Medicare Advantage plans negotiate with providers to create a lower-cost network system.

New Medicare Advantage benefits

Starting last year, new government rules allowed Medicare Advantage insurers to significantly increase the types of benefits they cover beyond strict medical care, opening the door to coverage of services such as adult day-care services, home-based care, caregiver support, pain management and safety devices.

Meanwhile, another batch of new rules will go into effect for expanded coverage starting in January. According to preliminary information from insurance company filings, expanded benefits include coverage of grab bars, nutritional advice, rides to doctor appointments, acupuncture, massage therapy and service animal support.

Sounds great — but before you rush to sign up for one of these expanded plans, be sure you know the limits involved, warns David Lipschutz, senior policy attorney at the Center for Medicare Advocacy. 

"In the past all Medicare plans have had to provide medical-related benefits uniformly," he said. But these new expanded benefits can be offered at a plan's discretion and only to people with certain health conditions. 

"That can significantly confuse the landscape because the expanded plans can be marketed to everyone, but not everyone will qualify for the new benefits," Lipschutz said.

Lipschutz advises enrollees to look beyond the bells and whistles and read carefully about each plan you're considering to find out if you'll be eligible for any of the new benefits.

Changes in prescription drug coverage

The good news: The Medicare Part D gap in coverage famously known as the doughnut hole — when Medicare beneficiaries paid total costs for prescription drugs after a certain limit — will no longer exist next year. However, Medicare recipients, especially those who need expensive drugs, may still face higher out-of-pocket costs. 

Here's how it works. When Medicare recipients hit the limit for out-of-pocket prescription drug costs, they hit what's called the catastrophic threshold. From that point on they pay 5% co-insurance for all medicines for life instead of the customary 20% (or more) copay under most Medicare prescription drug plans. The catastrophic limit for 2020 is increasing to $6,350 compared to $5,100 in 2019, meaning recipients will pay the higher 20% copays for drugs for a longer period of time.

That said, it's important to understand that even the 5% co-pay can be burdensome for people with high prescription drug costs, especially those in need of expensive specialty drugs to treat illnesses such as cancer or hepatitis C. After all, 5% of a $10,000 drug needed routinely is still unmanageable for most people, said Leslie Fried, senior director of the Center for Benefits Access at the National Council on Aging. 

Revamped "Plan Finder" tool

The new Medicare Plan Finder tool is another significant change on the Medicare landscape. The update is the first in 10 years and is designed to make the tool more mobile friendly and address many of the concerns in a Government Accounting Office (GAO) report published in July that detailed why the tool was hard for consumers to use.

With the update, consumers will now be able to compare up to three Medicare Advantage plans or three Medicare Part D prescription drug plans side by side. And many features of the plan finder have been improved and are easier to use.

But early in October, just before open enrollment, Medicare counselors noticed a potentially big problem with the redesign. Users were not able to compare total out-of-pocket costs among Medicare Advantage plans because the tool did not show out-of-pocket costs for prescription drugs, premiums and deductibles. The old version of Plan Finder did allow users to calculate total out-of-pocket costs.

As of Thursday, CMS reported that they have added a feature that allows Medicare Plan Finder users to sort plans by the total cost of estimated annual drug costs, plus premiums. It's not clear if users will be able to include deductibles in the out-of-pocket cost calculator.

Because of the new tool and its possible glitches, Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center advises users to start researching early. "Getting used to the new system may take some time," she said. This is especially true if you are accustomed to getting help from Medicare counselors or your State Health Insurance Assistance Programs or SHIP.

Counselors haven't had much time to acquaint themselves with the new system and this year's new, tighter enrollment deadline for people with low-income subsidies may increase their workload during the open enrollment period, Schwarz predicted.

Also, the new Medicare Plan Finder tool, much like the old one, does not let you compare information on Medicare Advantage provider networks. The government does not yet have that data integrated into the tool.

To find out if your doctor or other provider is part of an insurer you're considering, or still part of your current insurer's network, you'll need to click onto the specific insurer's website and look up the list of network providers.