The average adult 65 and older spends more than $22,000 on healthcare each year, according to the Centers for Medicare & Medicaid Services. Not all of this comes out of pocket, but even a fraction of this can be tough on seniors living on a fixed income.
Having the right health insurance coverage can minimize a senior's out-of-pocket costs while still providing the greatest possible coverage. And with Medicare's open enrollment kicking off on Oct. 15 and running through Dec. 7, now is a great time for all Medicare-eligible seniors to give their health insurance plans a closer look.
Here are three steps to take during open enrollment this year.
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1. Review your existing health insurance plan
Whether you're already on Medicare or a private health insurance plan, now is the time to put your current health insurance plan under the microscope. Understanding its strengths and weaknesses will give you a clearer idea of what you want going into 2024. It'll also help you feel more confident when comparing different plans.
Cost is a huge factor for everyone. Health insurance typically has three types of costs to watch for. These are:
- Premiums: These are the monthly costs you must pay to keep the insurance policy in force.
- Deductibles: Deductibles are the out-of-pocket costs you must pay before your insurance will cover your remaining costs. Each policy has its own deductible.
- Co-pays: Co-pays are fixed amounts you must pay toward covered services. This may be a percentage of the total cost of the service.
Medicare has these costs as well. For Original Medicare -- Hospital Insurance (Part A) and Medical Insurance (Part B) -- these costs are the same for most people. However, some high-income seniors may pay more than others.
If you plan to enroll in a Part D plan for prescription drug coverage, the costs you face could vary. The same goes for those who opt for a Medicare Advantage plan, also known as Medicare Part C.
You'll also want to look at your current plan's coverage options. Again, for Original Medicare, this isn't going to change a lot from one year to the next. But if you have a Medicare Advantage plan or a Part D plan, you could see more significant changes.
Make note of the following to help you find a plan for 2024 that suits your needs:
- What prescription drugs your current plan covers, and which ones you take regularly
- What doctors you can use
- Whether you need a referral to see a specialist
- Whether your plan includes extras like dental or vision coverage
If you notice any glaring gaps in your plan, that could be a sign you might benefit from switching to a new plan in 2024.
2. Decide what type of plan you want
As mentioned, Original Medicare pays for doctor visits and hospital stays. But there's a lot it doesn't cover. If you want dental or vision care or help paying for prescription drugs, you'll need to supplement your Original Medicare plan. There are a few ways to do this.
First, if you only care about prescription drug coverage, you can look for a stand-alone Part D plan. These plans are administered by private health insurance companies, and each has its own set of deductibles, co-pays, and premiums.
Medigap plans, also known as Medicare supplement plans, are health insurance plans private insurance companies offer to supplement Original Medicare. They may include coverage for things like dental, vision, and hearing care, as well as medical care outside the U.S. But they'll also come with their own costs.
Finally, there are Medicare Advantage plans. These plans are also administered by private companies. They include all the same coverage options as Original Medicare, as well as many extras. If you opt for one of these, you'll only have one plan to worry about. But there are some things you have to keep in mind, including:
- Medicare Advantage plans typically require you to adhere to a network of providers, whereas Original Medicare covers you when you visit any doctor or hospital in the U.S.
- Medicare Advantage plans often require referrals to visit a specialist, while Original Medicare does not.
- Medicare Advantage plans have a yearly limit on how much you'll pay out of pocket for services Original Medicare covers, while Original Medicare does not.
It's up to you to decide which type of plan or combination of plans makes the most sense for you right now. You can also compare a few options to see which provides you the most bang for your buck.
3. Compare your options for 2024
Though the open enrollment period doesn't technically begin until Oct. 15, you can start exploring plans for 2024 right now. Medicare.gov has tools that can help you compare all the options available to you quickly and easily.
You can view Medicare Advantage plans, Part D plans, and Medigap plans from here. All you need to do is select the type of plan you're interested in and provide your ZIP code. It will automatically find all the plans that match your criteria and give you key details about them, including costs and plan benefits. You can also enter information about any prescription drugs you're currently taking to see how much they would cost on the new plan.
Once you've found a few plans you're interested in, you can use the compare tools to look at them side by side and dive deeper into which services are covered and what kind of co-pays you'll face.
You won't be able to apply for a plan yet, though. This option will open up on Oct. 15, once the open enrollment period officially begins. You've got plenty of time, but it doesn't hurt to start looking right away. This way, you'll be able to take as much time as you need to review your options and feel confident that you're making the best decision for your health and wallet in 2024.
