Weigh 2015 Medicare Part D, Advantage Plan choices carefully

If you’re currently enrolled in Medicare, what you do or don’t do over the next few weeks could determine whether you can secure the best, most affordable coverage next year. Here’s why: Medicare Part D prescription plans frequently change premiums, drug formularies, deductibles and copayment amounts for specific drugs from year to year. Medicare Advantage plans often make similar changes; plus doctors, hospitals and pharmacies may drop out of their preferred provider networks.

Thus, by simply choosing the same options for 2015 without investigating alternatives, you could wind up paying hundreds or thousands of dollars more for similar healthcare services.

Medicare’s annual election period (a.k.a. open enrollment) to make coverage changes for 2015 runs from October 15, 2014, to December 7, 2014. For most people, this is the best – and sometimes only – opportunity to make coverage changes. (Exceptions are made for people who qualify for a special enrollment period – see “Medicare & You” at www.medicare.gov for details.)

If you already have traditional Medicare Parts A and B, you needn’t make any changes; however, if you also have Part D, you must either reenroll in your current plan or choose another.

During open enrollment you can:

Switch from Medicare Parts A, B and D to Medicare Advantage or vice versa.

Switch from one Advantage plan to another.

Switch from an Advantage plan offering drug coverage to one that doesn’t or vice versa.

Join a Part D plan, switch from one plan to another or drop coverage altogether.

Current Advantage plan enrollees can also use the Medicare Advantage disenrollment period (January 1, 2015, to February 14, 2015) to switch back to Medicare Parts A, B and D.

However they cannot:

Switch from original Medicare to Medicare Advantage.

Switch from one Advantage plan to another.

Switch from one Part D plan to another.

When choosing next year’s Part D plan:

Carefully review your plan’s “Annual Notice of Change” for substantive changes to premiums, deductibles, copayments, covered drugs, participating pharmacies, etc.

Notice whether they’ve changed copayments/coinsurance for your medications or possibly dropped some altogether. Ask your doctor whether comparable, covered drugs will work; otherwise you could pay much more next year.

Even if your plan hasn’t changed substantially, it’s still wise to use the Medicare Plan Finder at www.medicare.gov to compare all available plans. You’ll be prompted to enter your medications and dosages. The calculator then ranks plans by “star rating” and overall cost.

Note: The lowest premium may not be your best bet – sometimes plans with higher monthly premiums have a lower overall cost due to their more favorable deductible, copayment and coinsurance amounts.

Medicare Advantage plans are HMO- or PPO-type alternatives to Medicare Parts A and B. Most cover drugs and some include extra benefits like vision and dental coverage at additional cost. They usually have lower deductibles and copayments but require you to use the plan’s provider network. A few tips:

If your Advantage plan includes drug coverage, you don’t need Part D.

Carefully review the “Annual Notice of Change” from your plan for any substantive changes.

Even if your plan hasn’t changed substantially, you can use the same Medicare Plan Finder as above to review available plans. As with Part D plans, an Advantage plan with a lower premium might have a higher overall cost, due to various restrictions.

Bottom line: Reviewing your Medicare options each year is complicated and time-consuming. But if you don’t and your plans change significantly, it could cost you a bundle next year.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: twitter.com/PracticalMoney.

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Published: Oct. 23, 2014 - Volume 13 - Issue 28