It's that time again, late fall. Open enrollment. From now till December 7th we can make changes in our Medicare plans. You may have received a notice from Medicare and solicitations from a number of private companies that offer plans to supplement or replace Original Medicare. If you already have such a policy – a Medigap or Medicare Advantage plan – you've probably received its 2014 Schedule of Benefits, and if you've had a chance to look at it, you may have noticed several important changes for the coming year.
People who receive benefits through Original Medicare, which might be called the Public Option, will be seeing only minor changes. Original Medicare has three parts: Part A (in-patient care), Part B (out-patient care),and Part D (prescription drugs). Most people over age 65 are eligible to receive Part A at no charge. Part B is available for $104.90 per month for people who earned less than $85,000 in 2012. And Part D costs vary depending upon the drug plan you choose. If Original Medicare has been meeting your needs, you may want to stick with it.
Because Original Medicare Part B has a $147 deductible and then generally requires a 20% co-pay, with no annual out-of-pocket cap, you may feel a need to expand your coverage, especially if you anticipate major health expenses due to major surgery or a chronic condition. If so, you can add a supplemental Medigap policy that will kick in to cover expenses that Medicare doesn't. These Medigap policies, offered by private corporations, require that you be enrolled in Original Medicare Parts A & B, and do not include Part D drug plans, which must be purchased separately.
Medicare Advantage, sometimes called Medicare Part C, is where most of the changes are taking place. Part C, like Medigap, might be considered a Private Option. As with Medigap, concurrent enrollment in Original Medicare Parts A and B are required. But Medicare Advantage plans are not supplements so much as alternatives to Original Medicare. Many people favor them because they can offer additional benefits like health club memberships and annual-expense caps, as Original Medicare does not. Also, they often include their own Part D drug plans, as Medigap plans do not.
Because Medicare Advantage plans have traditionally offered such benefits at low or even no additional cost, they have been popular. Their ability to do this, however, has been due largely to generous government subsidies, which are being reduced, so that for 2014 many plans, such as AARP's Secure Horizons, are cutting benefits and increasing annual out-of-pocket maximums due to reduced government funding. Nevertheless, many of these plans remain attractive alternatives to Original Medicare.
Whether you're already enrolled in a plan or are signing up for the first time, it may pay to visit the plan finder at medicare.gov, enter your zip code, and survey the choices in your area. If you find one you like, you can make the change right there on the site with a click of your mouse.
