Medicare Open Enrollment: 3 Reasons You May Want to Make Changes

Every fall, Medicare health and drug plan providers publish information on changes that will take effect the following year. As a result, people on Medicare have the opportunity to make the following types of changes to their plans during the open enrollment period, which runs from October 15 to December 7:

You’ll notice that this list does not mention Medicare Supplement (Medigap) policy changes. The open enrollment period for Medigap is the six months following your enrollment in Medicare Part B. After this period, insurance companies generally are not required to sell you a Medigap policy. If they do offer coverage after your open enrollment period, they may charge you higher premiums. Keep in mind that Medigap policies are only available to people who have Medicare Parts A and B, not to those with Medicare Advantage.

There is also an open enrollment period from January 1 to March 31, when you can change your Medicare Advantage plan. During that period, however, you can’t switch from original Medicare to Medicare Advantage or make changes regarding drug plans. For complete details, go right to the source—medicare.gov.

Every Medicare participant should review their coverage at least annually. Here are three reasons you may want to seriously consider making changes:

People enrolled in Medicare Advantage plans, on average, spend less on health care than those with original Medicare. This includes a combination of premiums and out-of-pocket costs, along with drug coverage.

Medicare Advantage plans aren’t for everyone. Availability and costs vary widely by geographical area. Medicare Advantage plans generally restrict your choice of service providers. It’s also important to note that the expense differences below may reflect different levels of health care consumption across the three groups. Even considering these caveats, enrollment in Medicare Advantage plans has increased sharply in recent years because of the associated potential cost savings. If available in your area, they are worth considering.

As mentioned earlier, the downside to a Medicare Advantage plan is the limited provider network. You may not have fully appreciated the limitations when you chose your plan. Or you may have developed a new medical issue that requires specialists who aren’t available under your plan. Out-of-network medical care can be very expensive.

If you find yourself in this situation, open enrollment will give you the opportunity to consider other insurers’ Medicare Advantage plans, which may have better network options. In addition, if you switched from original Medicare and Medigap within the past year, you have the option to switch back to your old Medigap plan. Just don’t wait more than a year. There’s no guarantee the Medigap insurance company will offer you a policy, especially if your health has worsened.

It is surprising how different the cost for a specific drug can be in two different drug plans. A plan that worked well for your prescription needs a year ago may be far more costly if you’ve added a new drug to your list. In addition, the plan can change its drug list (called a formulary). Formulary changes can take effect the next year, or sooner, such as when a generic equivalent is introduced.

The Medicare website offers a comparison tool to help you shop for drug plans (Part D) and Medicare Advantage plans. It enables you to compare costs based on your specific prescriptions. You can also see what pharmacies are in network, as well as plan “star ratings.” Medicare is a complex topic, and it’s important to understand your options. There’s a lot of information on the Medicare site, so be sure to set time aside to digest it all.