Leaves changing colors and falling to the ground. Playoff baseball. Pumpkin spice everywhere. We can certainly tell fall is officially here. Fall is also the perfect time to consider an often overlooked yet extremely important aspect of cash flow planning in retirement – Medicare coverage.
Medicare Open Enrollment begins October 15th and runs through December 7th. Current Medicare users should take this opportunity to re-evaluate parts of their Medicare coverage to see if any changes need to be made next year. Medicare health plans and prescription drug plans can make changes to cost, coverage, and which providers and pharmacies are in their network from year-to-year. If you’re currently in a Medicare health or Part D prescription drug plan, make sure your plan will still meet your needs next year. While it’s not easy to predict your future health care needs, it is important to understand any changes to the services and benefits your current plan will provide next year.
Here are some specific things you should consider as you evaluate your Medicare health and prescription drug plans:
Monthly Premiums
Your monthly premium payments for Medicare Part D prescription drug coverage can change annually. There is good news with respect to the 2018 premiums, however. For the first time in five years, the average basic premium for Part D plans is projected to decline about $1.20 to an estimated $33.50 per month[1]. If your plan’s premiums do not decrease, it may make sense to switch to another plan with similar benefits and lower premiums.
Prescription Drugs
Prescription drug plans can also change which medications are covered in their plans from year-to-year. Grab a list of your current prescriptions and any other prescriptions you may need to take next year and make sure they are covered. Other plans may have lower costs for the same prescriptions, so it’s worth checking to see if you can save money or get better coverage.
Deductibles
Some Medicare Part D plans may lower or eliminate deductibles in 2018. However, plans may be making other changes that may mean increased costs for other benefits. A plan with a lower deductible may seem appealing, but you could end up paying more on an annual basis than a plan with a higher deductible.
Coverage Gap (“Donut Hole”)
Most Medicare drug plans have a coverage gap (also called the “donut hole”). The gap begins after you and your drug plan have spent a certain amount for covered drugs. Some plans offer additional cost sharing reductions in the gap beyond the standard benefits and discounts on brand-name and generic drugs, but they may charge a higher monthly premium.[2] Not everyone will enter the coverage gap because their drug costs won’t be high enough, but don’t assume that because your medications haven’t changed, that will be the case next year.
Quality of Plan
The Center for Medicare & Medicaid Services (CMS) rates Medicare Prescription Drug Plans using a 5-star quality rating system. Each year, CMS reviews how well these plans perform using measures such as customer service, appeals process, member complaints, changes to plan performance, member experience and accuracy of drug pricing[3]. You may consider a plan’s overall rating as one of the factors in reviewing and comparing your plan options. You can find your plan’s star rating here under Plan Details, Plan Comparison or Your Plan Results.
State Health Insurance Assistance Program (SHIP)
If you want an extra set of eyes as you review, consider contacting your local SHIP office. Every state has a dedicated SHIP office that can assist you with questions about Medicare coverage and provides counseling and assistance to people with Medicare and their families. To find the contact information for your state, go to this website or contact your advisor.
Medicare planning is very personal and specific to each individual. Because everyone has a different set of priorities when it comes to healthcare, it’s important to review your plan to make sure it still meets your needs.
Still have questions about what you need to do during Open Enrollment? Contact your advisor or a member of the Wealth Enhancement Group today!
[1] https://www.aarp.org/health/medicare-insurance/info-2017/medicare-premiums-decrease-in-2018-fd.html
[2] https://www.medicare.gov/pubs/pdf/10050-Medicare-and-You.pdf
[3] https://www.ncoa.org/resources/medicare-part-d-and-medicare-advantage-plan-star-quality-ratings/