Navigating Open Enrollment: How to Be a Smart Medicare Consumer
Decisions about healthcare can never be made lightly — especially when it comes to making your annual Medicare plan selections.
To choose the best coverage for your needs, save money and avoid penalties, it’s important to take your time and educate yourself (or a loved one if you’re helping an older relative navigate the open enrollment process).
Most people simply don’t know where to begin, according to Souhail Salty, a licensed Medicare advisor and vice president of partnerships at Chapter, a trusted Medicare resource.
“Everyone gets the 125-page booklet in the mail from Medicare, and it really doesn't help reduce the complexity or what rules apply,” says Salty.
And it’s unwise to base your decisions solely on the cost of premiums, because the coverage a particular plan offers might cost you much more in the long run if it doesn't fit your healthcare needs.
How Medicare supplementary plans differ
There are 24,000 permutations of Medicare plans across all 50 states, Salty explains, each with its own unique structure.
One consideration is underwriting requirements — whether a particular insurance carrier will accept you onto the plan, given your medical history and previous conditions. If you are accepted but find the plan isn’t right for you, switching to a new plan becomes more difficult as you get older.
Another factor is how much the carrier will raise your premiums over time. Though no one can predict what the future holds, you can get a sense of trends by asking your insurance broker about the current premiums for older age brackets and compare them to other policies you’re considering.
Why is it so important to do your homework prior to open enrollment? “It’s easy to choose a plan that artificially looks more affordable in the near term,” explains Salty, “but that carrier will hike up that plan's price over time.”
Pay careful attention to drug coverage options
Salty stresses that extra scrutiny should be given to available drug plan options every single year without fail.
The reason for that is two-fold, he explains. “First, individual clients’ needs for prescriptions are changing. They may need new prescriptions year over year, and so the plan that's best for them may change. But plans are also changing every year and what those plans cover are changing every year. It's really important to check that you're staying on the optimal plan.”
Medicare mistakes can be costly
From rising premiums and out-of-pocket drug expenses to inadvertent penalties, not choosing the optimal Medicare coverage can have long-term financial ramifications that add up over time. Consulting with your financial advisor or a licensed Medicare specialist is an important step to help ensure you’re making sounds choices to maximize your lifetime Medicare savings.
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