Personal Finance

Three bad assumptions to avoid during Medicare open enrollment

Key Points
  • You can make changes to your Medicare coverage through Dec. 7, which is when the program's annual open enrollment period ends.
  • While you aren't required to take action — you'd automatically remain in your current plan — doing nothing could add to your health-care expenses.

Giving your Medicare coverage a yearly checkup is one of those things that might be a pain in the caboose. Yet the chore could help keep your finances on track.

During the program's annual enrollment period, which opened Oct. 15 and closes Dec. 7, beneficiaries can make changes to coverage that will take effect Jan. 1.

Of course, you aren't required to do anything — if you take no action, you'll automatically remain enrolled in your current plan, assuming it remains available. However, passing on the chance to make changes could cost you.

"The danger is that at the time of service, you'll be surprised when you have a different copay or out-of-pocket expense that you weren't anticipating," said Elizabeth Gavino, founder of Lewin & Gavino in New York and an independent broker and general agent for Medicare plans.

Getty Images

Before this annual fall window closes, you can:

  • Switch to an Advantage Plan (Part C) from original Medicare (Part A hospital coverage and Part B outpatient coverage);
  • Switch to original Medicare from an Advantage Plan;
  • Move from one Advantage Plan to another;
  • Move from one prescription drug plan (Part D) to another, or purchase one if you did not when first eligible (although you could face a penalty for late enrollment).

New for 2019: If you pick an Advantage Plan during fall enrollment and realize afterward that it's not a good fit, you can switch to another one or to original Medicare and a standalone Part D prescription plan between Jan. 1 and March 31.

However, in that early-year window, you cannot go from one standalone drug plan to another, or go from original Medicare to an Advantage Plan. Also, you can only do one switch during that window. In the autumn period, you can change your mind multiple times.

Before open enrollment ends, here are three common assumptions about your coverage that you should avoid.

Assuming your plan will stay the same

Even if you've been happy with your Advantage Plan or drug coverage, there's no guarantee that you'll feel the same way in 2019.

While insurers are federally regulated, the specifics of their options can vary greatly from plan to plan, county to county and from year to year. Changes can affect things such as your premiums, deductibles, co-pays, covered services and participating doctors and other providers.

Also look closely at your prescription drug coverage, whether through an Advantage Plan or a standalone Part D plan. Even if your premium goes down, the price of certain drugs could be higher for you.

Monthly premiums for Part D prescription plans will be lower on average for 2019 coverage, according to the Centers for Medicare and Medicaid Services, falling to $32.50 in 2019 from $33.59 this year

Nevertheless, Gavino has a client whose Part D costs were $305 for 2018, including his premiums and co-pays. For 2019, if the client were to remain with his plan — with no change in the medicine he takes — his out-of-pocket cost would jump to $2,033.

You can check medication prices through the government's Medicare Plan finder.

To make sure your doctor, pharmacy or other provider is still in network, you have to check with the insurance company that offers the plan. You can either visit the provider's website or call. And if you work with a Medicare agent, that person also should be prepared to help you.

Assuming there isn't a better option

The number of plans you can pick from largely depends on where you live.

The more rural the area, the more likely you are to have fewer choices for an Advantage Plan. In fact, 115 counties dotting the country have none available to them for 2019, according to the Kaiser Family Foundation. That's down from 149 counties without one in 2018.

However, the average person on Medicare will be able to choose from 24 plans. For prescription drug coverage, the average beneficiary can choose from 27 standalone plans or 21 Advantage plans that include the coverage for 2019.

This means that even if you haven't preferred a different option in the past, the situation could be different for 2019.

Basically, there "could be new plans in your area that are better than your current one," Gavino said. "It's always important to review your options."

Medicare coverage explained

Assuming your health won't change

If your health is good, that's great. If you assume it will never go downhill, that might not be so wise.

Remember, original Medicare (Parts A and B) doesn't cover everything. While everyone's situation is different, it's important to at least consider the unknown.

For example, while you might take no medicine now, there's a good chance that will change, whether due to aging, an accident or an unanticipated medical event.

More than 80 percent of people age 65 and older take at least two prescription drugs and more than 50 percent take four or more, according to a 2016 AARP online survey of more than 1,800 adults age 50 or older.

In other words, it can be worthwhile making sure your coverage accounts for the unexpected.

More from Personal Finance:
The 11 best islands in the world for retirement
If you're planning to retire in 2019, here's how to make sure you're prepared
Investors welcome rising interest rates, despite Trump's resistance