Medicare covers more than 50 million recipients, with the vast majority 65 or older and relying heavily on the healthcare coverage it provides in their retirement years. Yet, Medicare actually involves some serious choices and, once a year, Medicare open enrollment allows participants to reconsider choices they've made about their coverage. This year, Medicare open enrollment runs from Oct. 15 to Dec. 7, with any changes you make taking effect on Jan. 1, 2015. Let's take a look at some of the facts you should know when considering your best strategy for Medicare going forward.
1. Medicare doesn't involve as many choices as private health plans
For many workers who get coverage from their employers during their careers, open enrollment is a stressful time in which you have to consider just about every aspect of health-insurance coverage. Different plans can vary in how they cover anything from routine doctors' visits and basic medical services to high-cost hospital stays and chronic disease treatment. Choosing among all those options can be a tough call to make, with huge consequences if you're wrong.
With Medicare, though, most of the basic benefits of the program are locked in if you choose traditional coverage rather than Medicare Advantage plans. Traditional Part A coverage of inpatient hospital care, skilled nursing facilities, and certain other intensive care tends to be straightforward, and Part B coverage for outpatient care, doctors' visits, and other medical services also has fixed provisions. Unless you decide to seek alternatives to traditional Medicare coverage, you won't have to do much with those key elements of the program.
2. Medicare Advantage plans have gotten more popular
Despite the coverage that traditional Medicare offers, it doesn't cover all of your healthcare costs. That's one reason why Medicare Advantage plans have gotten more popular, with about 30% of all Medicare beneficiaries participating in these types of plans. Some believed that Medicare Advantage plans would end up being uneconomical in light of healthcare reform; but, despite some regional squeezes, the overall number of plans available hasn't fallen at a steep rate thus far.
Offered by private healthcare companies like UnitedHealth (NYSE:UNH), Humana (NYSE:HUM), and WellPoint (NYSE:ANTM), Medicare Advantage plans typically offer managed care solutions. Integrated with prescription drug coverage under Part D, Medicare Advantage plans often require additional premium payments above what Medicare alone would charge; but, in exchange, recipients can get more extensive benefits under some policies.
Participants can switch from traditional Medicare to Medicare Advantage, from Medicare Advantage back to Medicare, or among different Medicare Advantage plans throughout the open enrollment period. But because Medicare Advantage plans can be location-specific, you can also get permission to switch plans during certain special election periods if you move out of the service area that your current plan covers. By looking at your particular health needs, you can assess the best Medicare Advantage plans available to you, and often save money in healthcare costs as a result.
3. Be sure to look at Part D prescription drug coverage
Even if you're covered by traditional Medicare, Part D prescription drug plans are still available. These plans can vary greatly in cost and services provided, with various plans even covering different individual drugs.
Because of the detail in which many Part D prescription drug plans go in describing covered drugs, it's extremely important to look closely at the prescriptions you have, and make sure that they're included in your current plan. Otherwise, you could be paying money for coverage that doesn't give you the benefits you deserve. In addition, many Part D plans are eliminating features like zero deductibles and filling in gaps in coverage, which reduces premiums, but also forces you to pay more of your healthcare costs yourself.
Most older Americans rely on Medicare to cover most of their healthcare costs; so making the most of your benefits under the program is vital to your financial security. By knowing as much as you can about your options under Medicare open enrollment, you'll be best able to get the most in benefits at the lowest possible cost.