‘Tis the season…to choose a Medicare plan.
Whether you’re already enrolled in Medicare, are approaching 65, or qualify because of a disability, you can opt into “original” Medicare (Part A & B) or choose a Medicare Advantage plan (Part C) that bundles original Medicare with prescription drug coverage (Part D) and other benefits like vision, dental and hearing.
With 43 plans on the market for 2023, choosing the right option can feel overwhelming. To help you find your way, review our list of mistakes to avoid and our advice to make an informed decision.
|Pro Tip: The Social Security Administration can help you enroll in Medicare (required to purchase an Advantage plan) and determine how you’ll pay for it. You can also get help choosing from the State Health Insurance Assistance Program.
Mistake #1: Miscalculating costs.
The projected annual premium for Medicare Advantage plans in 2023 is $18. That’s down from $19.52 for 2022.
But choosing a plan is more than just premium costs. Things like out-of-pocket limits, deductibles, coinsurance, and other costs do add up:
- For 2023, the Medicare Advantage out-of-pocket maximum for Parts A and B in-network care is $8,300.
- The Medicare Part A hospital deductible for 2023 is $1,600 per benefit period. Coinsurance fees start on day 61 of your admission. Medicare Advantage plans don’t have hospital deductibles but usually charge coinsurance from the day you’re admitted.
Run the numbers based on a worst-case health scenario. Yes, that’s kind of a bummer, but it gives you a realistic look at the potential maximum costs you’d have to bear. For example, out-of-pocket limits can be annual or lifetime and range widely. For example, original Medicare has no annual limit on out-of-pocket (unless you carry supplemental coverage).
Next, note the current costs of your everyday healthcare needs and medications, especially if you live with a chronic illness. This might include specialist care, telehealth, HIV care, or blood glucose monitors. This gives you a benchmark for what you’re currently paying. Then investigate the costs of plans that offer the coverage you need. Learn more about costs related to Medicare coverage.
|Pro Tip: If you have a financial advisor or tax planner, they can help you find the right coverage at the right price, or you can do it yourself with Medicare’s Plan Finder.
Mistake #2: Misunderstanding your coverage.
It’s vital that your insurance provides benefits for the services, medications, and supplies you need at the level you need them.
|Pro Tip: If you currently have other health or prescription drug coverage, talk to your benefits administrator or insurance agent about if and how it affects Medicare.
To find the right prescription drug option, the U.S. Centers for Medicare and Medicaid Services (CMS) suggests answering these questions:
- Do I already have prescription drug coverage, or do I need to join a Medicare Prescription Drug Plan?
- What’s the plan’s overall star rating?
- Are my drugs covered by the plan’s formulary?
- What are the coverage rules for my prescriptions?
- What are the costs for my prescriptions?
- Am I eligible for a free Medication Therapy Management program?
- Is there a penalty if I join a drug plan later?
Most (35) of the 2023 Advantage plans include prescription drug coverage. If yours doesn’t, you may be able to get a separate Part D plan.
In addition to prescription drug benefits, some advantage plans offer additional coverages that could be valuable to you. These options include:
- Dental care
- Hearing care, including hearing aids
- Eye exams, glasses, and vision aids
- Home safety devices, wearables, and installations
- Food and meals support
- Remote patient monitoring like medication dispensers and personal emergency response systems
- Gym memberships
Mistake #3: Missing important requirements.
Before you choose a plan, make sure that:
- Your preferred healthcare provider and pharmacy are in the plan’s network (and are accepting new patients if you’re not currently in their care).
- You live in the plan’s coverage area.
With original Medicare, you can see any doctor who accepts Medicare – which is a lot of them. Advantage plans often require using an approved network of pharmacies and providers for maximum benefits. Certain Advantage plans limit out-of-network coverage or apply higher co-payments and out-of-pocket limits.
|Pro Tip: Verify how Advantage plans handle out-of-network care. This is especially important if you travel frequently or see a specialist who’s not in the network.
Care outside of the U.S. usually isn’t covered by original Medicare or Advantage plans. You may be able to purchase a supplemental international emergency coverage plan.
Mistake #4: Missing out on special needs coverage.
You could qualify for specific Advantage plans if you live with a chronic condition or require coordinated care.
- End-Stage Renal Disease. Until 2021, people with this condition weren’t eligible for Advantage plans. But now, even if you’re on dialysis, you can enroll. Get the details here.
- Insulin-Dependent Diabetes. If you’re enrolled in Medicare Part D, costs for covered insulin products are capped at $35 per month. Check out Medicare benefits for diabetes care.
- Chronic or Complex Conditions. If you have a complex or chronic condition or need coordinated care, you may qualify for a special needs plan if you:
- Are eligible for both Medicare and Medicaid
- Have specific chronic or disabling conditions such as diabetes, dementia, heart failure, HIV/AIDS, or ESRD
- Live in a nursing home or require nursing care at home
These plans frequently cover home safety installations (like grab bars), in-home nursing care, adult day care, caregiver support services, and meal and transportation costs.
Mistake #5: Ignoring quality ratings.
Price is a major consideration, of course. But so is quality. Inadequate or improper care and customer service can cost you more than you saved. The CMS instituted star ratings that show how the agency and Medicare recipients rate each plan’s care and services, such as:
- Preventive care like screenings, vaccines, and tests
- Patient outcomes
- Chronic disease management
- Member experience (including complaints)
- Health plan customer service
Advantage drug plans also are rated on member experience and customer service, plus medication safety and drug pricing accuracy.
|Pro Tip: Find each plan’s star rating by clicking on Plan Details in the Medicare Plan Finder.
Affordable and adequate healthcare coverage is a contributor to aging well. Avoid these mistakes, and you’ll be on the path to finding the best Medicare option for you.
FINANCIAL DISCLAIMER: This information is not intended as a substitute for professional financial, accounting, tax, insurance, or legal consultation; it is provided “as is” without any representations or warranties, express or implied. Always consult professionals when you have specific questions about any financial matter.