Medicare open enrollment, which runs from Oct. 15 to Dec. 7, is the time of year to make changes to your Medicare plans.
It’s an opportunity to see what’s new with Medicare and potentially find a better plan. Any changes you make during open enrollment kicks in on Jan. 1 of the following year.
Here’s what you can change during open enrollment.
- Switch from Original Medicare (Parts A and B) to Medicare Advantage -- or vice-versa
- Swap your Medicare Advantage plan
- Change your Part D prescription drug plan (these plans are only available for people with Original Medicare)
You don’t have to make changes to your Medicare plan. You can decide to stay with the same coverage. That’s fine as long as those options are still available.
Parts of Medicare
Before we go into the changes, let’s quickly review the types of Medicare:
- Part A -- inpatient hospital care
- Part B -- physician services, outpatient care, lab work, X-rays and preventive services
- Part C (Medicare Advantage) -- Medicare plans offered by private insurers; they often group inpatient, physician and prescription drug services
- Part D (prescription drugs) -- Prescription drug care for people with Original Medicare (Parts A and B)
Parts A and B are often called Original Medicare. If you have Original Medicare, you can pair it with Part D for prescription drug benefits. You can’t get Part D if you have Medicare Advantage.
The federal government offers Original Medicare. Private insurers offer Medicare Advantage plans. Two-thirds of Medicare beneficiaries have Original Medicare, but Medicare Advantage has been gaining more members in recent years.
Medicare changes for 2020
Each year, Medicare makes changes to plans and offerings. Most of the 2020 reforms mean more options for you.
First, the Centers for Medicare and Medicaid Services revamped its Medicare Plan Finder. The improved plan finder will help you compare multiple plans: Original Medicare, Medicare Advantage and Part D prescription drug plans.
Here’s what’s new for different pieces of Medicare:
There are three changes in Original Medicare for 2020 and they all involve costs:
- Part B monthly premiums will increase to $144.30. That’s a nearly $9 increase over 2019.
- Part B deductible will jump by $12 to $197 in 2020. That means more out-of-pocket costs.
- The high-income bracket for Medicare will increase $2,000 to $87,000 for a single person.
Original Medicare often has higher premiums than Medicare Advantage plans. In fact, you will likely be able to find a Medicare Advantage option with no monthly premiums.
However, Medicare Advantage also has higher deductibles and out-of-pocket costs. So, you may pay a little each month in premiums, but you’ll need to cover more of the costs when you need care.
Medicare Advantage will see lower average premiums in 2020 and more plan options for enrollees.
- The average monthly Medicare Advantage premium will decrease by 14% to $23 in 2020. That’s a decrease from $26.87. The $23 premium is the lowest cost since 2007.
- There will be another 1,200 more Medicare Advantage plans in 2020 compared to 2018. CMS estimated there will be an average of 39 Medicare Advantage plans by county in 2020.
- More Medicare Advantage plans will offer plans geared for specific conditions, such as diabetes. Medicare Advantage is also expanding supplemental benefits for people with chronic illnesses. These benefits go beyond medical care and include transportation for non-medical needs and meals. You may also be able to get funding to make changes to your home, such as handicapped-accessibility enhancements.
- Some Medicare Advantage plans will now offer benefits like adult care services and caregiver support services.
- Additional Medicare Advantage plans will reimburse for telehealth. CMS said more than half of Medicare Advantage plans will provide those services, which allows people to get medical care from their homes.
So, there are lower premiums and more choices and supplemental benefits for Medicare Advantage in 2020. If you have an Original Medicare plan, you may want to check the Medicare Advantage offerings in your area to see if a plan works for you.
Medigap is a supplemental program that’s often paired with Original Medicare. It’s not available if you have Original Medicare.
Medigap isn’t an insurance program. Instead, it helps you pay out-of-pocket costs.
- Medicare is cutting enrollment to two types of Medigap plans. You will no longer be able to enroll in Medicare Supplement Plans C and F. Congress decided those two plans were too generous and could result in people using more medical services than needed. People with those plans can keep them, but Medicare beneficiaries won’t be able to sign up for new coverage. Medicare will no longer provide Medigap options without deductibles.
- Medicare is adding a high-deductible Plan G.
One benefit of some Medigap plans is that they cover international health care costs. Let’s say you’re traveling in Europe and you need medical treatment. Original Medicare won’t pay for it.
However, six different Medigap plans will pay 80% of those costs.
Costs for Medicare in 2020
Premiums and out-of-pocket costs are vital when comparing Medicare plans. Here are the average premiums for Parts A-D:
- Part A - This is usually free as long as you’ve been employed and paid the Medicare tax. For those who aren’t eligible for premium-free coverage, it will likely cost you $437 for Part A in 2020. Part A’s deductible is $1,364 for each benefit period, which is when you’re admitted to a hospital or skilled nursing facility.
- Part B - The Part B premium is usually $144.30. If you have a high income, your costs may be higher. The deductible is $197 for 2020. Once you meet that deductible, you pay 20% of your Part B healthcare costs.
- Part C - The average monthly Medicare Advantage premium is $23 for 2020. Insurers have been decreasing the average premium, but you’ll want to compare plan deductibles. Those out-of-pocket costs can lead to hefty out-of-pocket costs.
- Part D (drug plan) - The average monthly basic Part D premium for 2020 is $30. That’s the lowest average premium since 2013. Similar to Medicare Advantage, Part D premiums and deductibles vary. The highest Part D deductible is $435 in 2020, which is a $20 increase from 2019.
What other times can you change Medicare plans?
Open enrollment isn’t the only time you can switch Medicare plans. Other times are when you’re newly eligible or have experienced a life event that triggers a special enrollment period.
When you’re first eligible for Medicare, you a seven-month span to sign up for coverage. That includes the three months before your qualifying birthday and the three months after that birth month.
To trigger a special enrollment period, one of the following must happen to you:
- You lose coverage (for instance, you get divorced or lose your job)
- You move to another state
- Your income changes
- Your spouse dies
If those life events happen to you, you can contact Medicare about kicking off a special enrollment period. In that case, you’ll be able to make changes to your Medicare coverage or sign up for a new plan.
It’s not a good idea to delay Medicare enrollment in Parts B and D if you decide on Original Medicare. One exception is if you have creditable coverage, such as group insurance.
“If you delay with no creditable coverage, you’ll receive a penalty for both Part B and Part D of 10% each year you delayed coverage that will stay with you the rest of your life,” said Lindsay Engle, senior SEO marketing manager at Elite Insurance Partners.
What you should do during Medicare open enrollment
Open enrollment is a great time to review your plan and what you want from a health plan.
What to think about during Medicare during open enrollment:
- Have your plan needs changed?
- Do you have a chronic illness that a Medicare Advantage plan targets?
- Are you paying higher premiums than you need?
- Is your plan’s deductible too high?
- Is there a new plan offering that makes more sense for your situation?
- Is there a better Part D drug plan? Does that Part D plan cover your mediations?
- If you find a better plan, does your doctor and hospital accept it?
- What’s the plan’s quality rating?
“Consider the impact of having to go through medical underwriting when switching plans,” Engle said. “If you’re outside your open enrollment, and don’t have guaranteed issue, you’ll have to answer medical questions when switching plans. However, those who already have a Medigap plan usually pass those questions fine if they switch to a different Medigap plan.”
Visit Medicare.gov to get information about plans in your area or call 1-800-MEDICARE. You can also go to the Medicare Plan Finder to compare plans available for you.