Enhancing Your Medicare Benefits

Many people get Medicare wrong. That’s a shame, because it is the main retirement medical insurance for most Americans. Fortunately, you can fix most of the problems, and we’re entering the time of year for shaping up your Medicare benefits.

In the last couple of years I’ve seen a lot of research revealing the mistakes people make with Medicare-related issues. On average people pay significantly more than they need to for Medicare supplement insurance (Medigap) policies. They also don’t select the Medicare Part D Prescription Drug policy that is optimum for them. Surveys show people have mistaken beliefs about the basics of Medicare.

We’re coming up on the time when you can correct these and other errors and enhance your Medicare benefits.

Open season occurs once every year. In 2014, it is from Oct. 15 ? Dec. 7. During this period you can make a number of changes. You can switch from Original Medicare to a Medicare Advantage Plan or vice versa, or switch from one Medicare Advantage plan to another. You also can join a Part D Prescription Drug plan or switch from one Part D plan to another, or drop Part D coverage entirely. Any changes you select during this period will take effect Jan. 1, 2015.

There’s another but limited open enrollment period from Jan. 1 ? Feb. 14. During this period you can switch from Medicare Advantage to Original Medicare and, if you do so, also can join a Part D plan. Your new coverage will begin the first day of the following month. No other changes can be made during this second open enrollment period.

You begin by deciding what you like and don’t like in your current coverage. Talk to others about their coverage, read on Medicare’s web site or in its publications, and do other research. Do you like Original Medicare, in which you choose all your own doctors? If so, you generally manage and coordinate care yourself and are subject to Medicare’s deductibles, copayments, and limits. You’ll also have to decide if you want Part D Prescription Drug coverage and a Medigap policy to cover things not covered by Original Medicare.

Or would you prefer a Medicare Advantage plan? This likely limits your choice of doctors and discretion to see specialists. But these plans usually cover more than Original Medicare, including prescriptions, and generally are more proactive and coordinate coverage for individuals.

When you choose Original Medicare and need prescription coverage, give some thought to the details of the coverage. If you’re taking certain medications now or have a personal or family history that indicates certain prescriptions will be needed in the future, you can learn the details of different plans and see how your drugs are covered. One thing studies are finding is that too many people are opting for Part D plans that don’t provide adequate coverage of the medications they need when there are other plans available that do so for similar premiums. One study found that most people in Part D plans could save about $300 annually by switching to the optimum plan available.

You should begin this research and decision process even before open enrollment begins.

Once you’ve determined what you want in medical coverage, shop around. If you’re comfortable with computers or have a friend or relative who can help you, take a look at the Medicare.gov web site. There you can review the details of all the plans available to you. You also can see how plans with very similar coverage can have very different costs.

Another research option is to call 1-800-MEDICARE and have the person answering the phone review what’s available in your area and help you find the plans that offer what you’re looking for and compare prices. You probably also can receive help from your state’s Area Agency for Aging. Some areas have local nonprofit organizations that will help seniors with these decisions. Of course, you also might be able to locate a financial planner, elder care lawyer, or estate planning lawyer in your area who helps clients with these decisions.

What about Medicare supplement policies for those enrolled in Original Medicare? You can change policies at any time, but there’s a catch. After your initial enrollment period when turning 65, insurers don’t have to issue a policy. They can conduct a medical review and deny coverage entirely or limit coverage for up to the first six months after the policy is issued.

Even so, if you’re reasonable healthy and likely insurable, you should shop around. One study found that premiums for identical policies differ by as much as 100%. You can shop around easily on the Medicare web site or by calling the 800 number. We’ll discuss Medigap policies in detail next month.

RW September 2014.