The Annual Enrollment Period for selecting Medicare choices is well underway.
Medicare coverage decisions can only happen during the period of October 15 to December 7 of each year. “Special Election Periods” allow, in specific circumstances, changes during other parts of the year.
The Annual Enrollment Period gets much attention, advertising from insurance companies and comment. What is at stake?
The Government provides Medicare services in Part A and Part B. Private insurance companies sell supplement insurance to cover many of the costs Part A and Part B do not and Part D drug coverage. That is classic “Original Medicare”.
Private insurance companies also offer Part C “Medicare Advantage” plans. These offer Original Medicare services; often with other benefits.
This will not survey the details of all the choices. We discuss here the choice between the Original Medicare choices and the Medicare Advantage choices. The bottom line is the potential out-of-pocket costs a person has to incur in either case.
Original Medicare has premiums for Part B and any supplement policy bought. However, there is less in co-pays and co-insurance. Medicare Advantage plans often have much lower monthly premiums but often higher co-pays and co-insurance; but there are maximum “total out-of-pocket” expenses to protect against major expenses from hospitalizations and other causes. To make a choice to go with Original Medicare or a Medicare Advantage plan calls for a projection of how much medical attention you are going to need.
Original Medicare is usually best suited for someone who expects to need more medical services. Even though the premium is higher than most Medicare Advantage plans, the lower co-pays and co-insurance costs can make it the better bet. If there is a sense there will not be a need for much medical attention, a Medicare Advantage plan may be the better way to go. The lower premium saves money over Original Medicare Part B and a Supplement policy; and there is a cap if you need more medical attention than expected. Plus, Medicare Advantage Plans often have added benefits like vision or dental services Original Medicare does not have.
Trying to calculate the potential cost differences is, itself, trying. But the general principles are a good guide to what to consider. If it is clear much medical attention will be required, Original Medicare planning should be considered. When the expectation is little medical attention will be needed, then a Medicare Advantage plan can have the advantage of less monthly premium; but, perhaps, some added benefits.
Cost is always important. However, if you have favorite doctors and other providers, make sure they are in the network of any Medicare Advantage plan. If you cannot see the doctor of your choice or get the medications you need, any cost savings is not worth it. Your good health is the most important preference of all.
Most important, remember to complete your choice before December 7. If you do not, you may find yourself stuck in a plan you do not like until this time next year.
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