Medicare open enrollment has arrived. Here are tips for navigating the maze

If you’re on Medicare, it’s time to give your coverage a close look whether you feel like it or not.

From now through Dec. 7, you can make changes that take effect Jan. 1. While you are not required to do anything — your 2020 coverage would continue next year, generally speaking, if you take no action — it’s worth checking to see if there’s a more cost-effective option that suits your circumstances.

“You don’t want to go to the pharmacy in January and discover a drug you’ve been paying $40 for is now $400,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits. 

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In simple terms, this annual fall open enrollment period is for adding or changing coverage related to an Advantage Plan (Medicare Part C) and prescription drugs (Part D). You can switch, add or drop those parts of your coverage.

Roughly 62.7 million people are enrolled in Medicare, the majority of whom are age 65 or older. While about a third choose to get their benefits delivered through Advantage Plans, which are offered by private insurers, the remainder stick with original Medicare: Part A (in-patient coverage) and Part B (outpatient care). Those beneficiaries often pair that with a standalone Part D plan and/or a Medicare supplemental plan (a.k.a Medigap), which also are offered by private insurance companies.

Fall enrollment is different than your initial sign-up period for Medicare, when you get a seven-month window that starts three months before the month in which you turn 65 and ends three months after it. During that initial enrollment, unless you meet an exception — i.e., you have acceptable coverage elsewhere — you generally must sign up for Parts A and B. You also can sign up for Parts C or D during your initial sign-up period.

Every year, usually by Sept. 30, your Advantage Plan or prescription drug plan should alert you if anything about your coverage is changing for the upcoming year. While the insurers are federally regulated, the specifics of their options can vary greatly from plan to plan, county to county and from year to year.

Here are some tips for navigating open enrollment.

Whether you have an Advantage Plan, or you pair a standalone Part D drug plan with original Medicare, be sure to check the annual notice of changes from your carrier. If you didn’t get the pamphlet in the mail, it may have been sent to your email account — and could have been overlooked or gone unnoticed because it landed in your spam folder.

“You should have received it by now,” Roberts said. “If you haven’t, you can call your carrier and ask them to resend it.”

Alternatively, you can ask a Medicare agent for guidance or check the Medicare plan finder tool to see your costs for 2021.

Whether via an Advantage Plan or standalone Part D plan, Roberts said, it’s important to make sure your current plan still covers your prescriptions. Sometimes your existing coverage will remain the best option, but other times there’s another plan that would be less costly.

With Advantage Plans, other terms of your coverage may change, as well. For instance, the maximum deductible in 2021 will be $7,550, up from $6,700 this year, Roberts said.

“Before you join a plan, ask yourself if you can cover the deductible,” she said.

Also, make sure your favorite doctors or other providers remain in-network.

“Providers negotiate their contracts each year,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans. “Some come off the plan and some join the plan.”

Additionally, if you pick an Advantage Plan during fall enrollment and realize afterward that it’s not a good fit, you can make a change to your coverage between Jan. 1 and March 31. You’ll be able to switch to either another Advantage Plan or to original Medicare and a stand-alone prescription plan.

If your Advantage Plan isn’t working for you and you want to drop it altogether instead of switching to another, you can do that. You would simply be left with original Medicare (Parts A and B) and would need to get a standalone Part D prescription drug plan if you want that coverage. (If you don’t, and later change your mind, you may face a financial penalty for going without it.)

Additionally, although beneficiaries in that situation may want to purchase a Medicare supplemental policy — aka Medigap — there are rules that apply to enrolling in one. 

“Depending on the state where they reside, they may have to go through medical underwriting and may be denied coverage or offered a higher rate,” Gavino said.

Those plans, which are sold by private insurance companies, help cover cost-sharing aspects of original Medicare — Part A hospital coverage and Part B outpatient coverage — including copays and coinsurance. They also come with their own set of rules.

Generally, the rule is that you get a six-month window when you first enroll in Part B to purchase Medigap without having to answer health questions and be penalized for pre-existing conditions.

An exception is if you’ve had an Advantage Plan for less than a year, and it’s the first time you’ve tried one out. In that case, you get a special enrollment window for a Medigap policy.

“Once that 12 months expires, you never get that window again,” Roberts said.

She said that if underwriting will occur, it’s wise to apply for the Medigap policy early in this fall enrollment window and to hang on to your Advantage Plan until you know you can get the supplemental coverage.