For those of you who are on Medicare it’s that time of year again. Medicare open enrollment occurs annually from October 15th through December 7th, for a January 1, 2023, effective date. Fall Open Enrollment is the time of year when you can change your Medicare Advantage Plan or Medicare Part D prescription drug plan. During this time, you can make changes to your coverage without penalty including enrolling in, changing, or dropping a Medicare Advantage plan or Part D prescription drug plan. You can also choose to keep your current coverage.
Medicare Supplements (Medigap policies) do not have an Open Enrollment. Instead, you can change your Supplement once a year under the California Birthday Rule to another Supplement (with another carrier or within your current carrier) to a plan with the same or lesser benefits
Why do you need additional coverage anyways?
Original Medicare only covers 80% of allowed costs for medically necessary medical treatments and services. This means you will need to cover the remaining 20%. There is no cap on what you might pay out-of-pocket with Original Medicare.
To reduce the risk of potentially getting a large medical bill for the 20% portion, you can enroll in either a Medicare Advantage plan or Medigap (Medicare supplement) to take care of the 20% out of pocket cost. While Medicare Supplements augment your Original Medicare coverage, Medicare Advantage plans replace Original Medicare.
Even if you are on a good Medicare Advantage or Medigap plan and are satisfied with your coverage, it’s a good idea to review your coverage annually. Make sure to evaluate your coverage and its cost, to ensure it is still right for you. Has your Medicare Part D plan dropped the medication you are currently taking? Have you moved recently? Both of these events may justify considering a change to your Medicare coverage. Make sure your doctors, hospitals, laboratories and anywhere you receive service, are still covered for the next year.
Also, you may have experienced a change in health over the last year and this too can factor into your Medicare coverage.
Medicare Advantage Plan vs Medigap plans- which one is right for you?
Medicare Advantage plans are attractive because of their low cost. Medicare Advantage is a money-saving choice if you are in good health with few medical expenses and continue to be in good health. However, if you are utilizing your coverage, visiting doctors, or having medical issues, Medicare Supplements should strongly be considered. Additionally, Advantage Plans have a limited network of doctors, and you have to get referrals in some cases.
Medigap policies, on the other hand, cost more than Medicare Advantage plans. However, with Medigap coverage you can use any Doctor or facility in all 50 states as long as they accept Medicare, and most all of them do. Medigap policies also include foreign travel coverage. There are no co-pays or percentages to pay (like on most Advantage plans), no referrals are needed, and you select your facility you prefer to visit (should there be a stroke or more serious medical issue). This is important because you can choose a facility that is convenient for you.
Medigap plans do not provide prescription drug coverage, so you will need a Medicare Part D Plan with a Medigap policy.
Keep in mind however, if you do decide to switch from a Medicare Advantage Plan to a Medigap plan after your initial enrollment period, you will need to go through medical underwriting and you can either be accepted or declined. So, it is best to enroll in a Medigap policy when you turn 65 or when you enroll in Part B (after leaving employer sponsored group insurance). This is because you get 6 months to enroll at these times without having to provide medical information. You will be guaranteed a Medigap policy for a 6-month period, regardless of any medical issues.
What are some of the advantages of a Medigap policy or Medicare Supplement?
Medigap policies only have an annual Medicare deductible that you pay. For 2022 this is $233 and there are no co-pays or percentages. The deductible is decreasing slightly for 2023.
For Medigap policies there is one rate increase annually for most carriers and it is age based for most carriers.
We interviewed Virginia Cangelosi, owner of Cangelosi Insurance Agency and she had this to say “I like Medicare Supplements in general because of their flexibility. When you get older you don’t want to be restricted as to the doctors you can see and the facilities you can use. You want the freedom of choice to select your doctors and facilities of preference. Medigap doesn’t cost that much more and can often be the better choice in the long run.”
What else do I need to know?
Information for next year’s plans will come out in October.
You can compare plans by calling 1-800-MEDICARE or visiting Medicare.gov.
Original Medicare will only cover 80% of the cost of your medical expenses. Having additional coverage in place is important in order to prevent your out-of-pocket costs from spiraling out of control. Use the Open Enrollment time to study the available options and make the best choice for you.
If you are confused or overwhelmed, please feel free to contact our office as we have resources designed to help you make the best decision for your specific situation.
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