You’ll be able to change your Medicare Benefit Plan if you wish to. Here is what to contemplate earlier than you lock in your alternative
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You might have heard that if your 2021 Medicare Advantage Plan isn’t a good fit, you can do something about it.
During a window of opportunity that opened Jan. 1 and closes March 31, Advantage enrollees can drop their plan and return to basic Medicare (Part A hospital coverage and Part B outpatient care) or switch to another Advantage Plan. If the latter is your preference, there are a few things to watch for before you finalize your choice, experts say.
“Be aware that you are now locked into that plan for the rest of the year unless you (qualify) for a special election period,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits.
“Considering the lock-in period, due diligence is required,” Roberts said.
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Roughly 63 million individuals are enrolled in Medicare, the majority of whom are age 65 or older, according to government data. The remainder are younger with disabilities or individuals with end-stage renal disease.
About 40% (25.4 million) get their benefits delivered via Advantage Plans, which are offered by private insurance companies and typically include Part D prescription drug coverage. The remainder stick with basic Medicare and may pair it with a stand-alone Part D plan and a Medicare supplemental policy (aka Medigap), both of which are also offered by private insurers.
While Medicare’s fall annual enrollment is for changing your coverage if you want to, some beneficiaries only discover afterward that the Advantage Plan they picked is not ideal.
“The most common reason people change is that they joined a plan during the (fall enrollment window) without realizing that one of their doctors is not in the network or one of their medications is not covered on the formulary,” Roberts said.
Your evaluation should not stop there, however.
For 2021, the average beneficiary has access to 33 Advantage Plans, research from the Kaiser Family Foundation shows. Altogether, 3,550 such plans are available, up 13% from 2020.
Of the plans that include prescription drug coverage, more than half (54%) charge no premium, and 96% of beneficiaries have access to one of them in 2021, according to Kaiser.
Premiums are not the only aspect to consider: Generally speaking, the lower the premium, the more you’ll pay in cost-sharing — i.e., copays, coinsurance and deductibles.
Additionally, although Advantage Plans come with out-of-pocket maximums (unlike basic Medicare), those amounts can be as high as $7,550 in 2021 for in-network coverage before the plan pays 100% of covered services. The combined in- and out-of-network maximum is $11,300.
It’s also important to understand the differences between a PPO and an HMO, Roberts said. HMO plans provide coverage only if the providers are in-network and are often cheaper. However, they also may have more requirements like needing a referral to see a specialist.
“This can sometimes slow down how quickly you can get to see a specialist, so it needs to be considered,” Roberts said.
Also, depending on your specific situation, you should check the in-network coverage of medical equipment providers, diabetes-management suppliers and home health companies, Roberts said.
“If you use any of these services, it’s a good idea to check with those providers to ensure that you won’t lose access to them when you switch,” she said.