Medicare Open Enrollment Time is Here

Every year, people who are currently enrolled in a Medicare program have an opportunity to review their coverage and make changes without penalty during the Medicare Open Enrollment period.  There is much to consider when it comes to choosing a plan, and to deciding whether to make any changes.  

Open Enrollment runs from October 15th through December 7th in 2023, and the two contending choices are Original Medicare and Medicare Advantage.  For many, the choice will significantly affect the quality of their medical care, and it may also affect their quality of life.  Seniors need to understand the benefits and drawbacks of each option in order to make the best decision for their particular situation.

Important Note:  While it is relatively easy to switch from Original Medicare to Medicare Advantage, switching from Medicare Advantage to Original Medicare is more complicated.  In some states, if you switch from Medicare Advantage to Original Medicare, you may not be able to get all the coverage you would have had under Original Medicare parts A & B with a Medicare Supplement Insurance (“Medigap”) plan, if you had signed up as soon as you were eligible. 

Original Medicare

Original Medicare consists of Parts A and B—hospital insurance and medical insurance respectively. They cover most but not all costs.  Prescription drugs are not covered by Parts A or B, so most people join the Medicare drug plan, Part D, separately.  Many also choose to buy supplemental insurance, or Medigap, which different states title with letters such as G or F, for example. These supplemental insurance plans will help cover copays, tests, and other medical necessities not already covered by Parts A, B, or D.

What is the main appeal of Original Medicare?  It is accepted by almost all doctors, hospitals, and facilities, and is not limited to the providers in a particular network.  Beneficiaries are also afforded the ease of seeing specialists without needing a referral to get coverage.

What are the drawbacks?  Part B has a 20% coinsurance after meeting the deductible.  In addition, Part B and Part D come with monthly premiums.  While a supplemental insurance, or Medigap, policy can help pay for the 20% coinsurance and remaining costs, they too come with premiums, meaning that out-of-pocket costs can add up significantly depending on drugs, procedures, and frequency of care.

Medicare Advantage

The other Medicare option is Medicare Advantage, also known as Medicare Part C.  Medicare Advantage is a plan from a Medicare-approved private company, and usually includes services covered by Original Medicare Parts A, B, and D.  Part C plans often offer dental and vision coverage, and sometimes even your health club.   Unlike Original Medicare, there is a yearly limit on what beneficiaries will pay out-of-pocket per year for hospital and medical services.  Once the limit has been reached, beneficiaries will pay nothing for any additional hospital or medical services that year.

The appeal of Medicare Advantage is that it has lower premiums and fewer out-of-pocket costs.  The multiple parts of Original Medicare are bundled into one, and depending on the services needed, beneficiaries can save money, at least in the short term.  

The primary downside to Medicare Advantage is that beneficiaries are restricted to using the doctors, facilities, and service providers in their plan’s network only.  Buying a supplemental Medigap plan is not an option, and many services, drugs, and procedures will require waiting for approval before the plan covers them.  If beneficiaries want to see specialists or go to facilities outside of the network, the only option will be to pay out-of-pocket. 

Which one should I choose?

Original Medicare and Medicare Advantage offer healthcare solutions for individuals in different financial and medical situations.  The type of Medicare that individuals choose will vary according to each person’s financial means, medical needs, and the doctors and facilities available through the different programs.

In summary, with Original Medicare, beneficiaries have access to almost all providers and services, but incur higher monthly payments.  With Medicare Advantage, monthly payments will be lower, and medical costs will be lower as long as medical treatment, drugs, and supplies can be obtained within the beneficiary’s network.

People on Medicare Advantage risk increased costs and time delays, should they encounter a complicated or non-standard medical issue.  They could be denied care and have to jump through time-consuming hoops to get approval for treatment.   If they choose to pay out of pocket to obtain the medical care they want, or feel they need, the financial burden could end up being as high or higher than that of Original Medicare. 

It is imperative for prospective beneficiaries to review the costs of their prescriptions, which networks their doctors are in, and the cost of the benefits they are likely to need, before making a decision.  If the doctors you currently use and trust are part of a Medicare Advantage plan, this could be more cost-effective and more efficient for you.  If you prioritize choice and flexibility, and are willing and able to pay more for your insurance, you will likely prefer a plan under Original Medicare.

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