An adviser’s guide to Medicare open enrollment

If you are younger than 65, you probably wonder what all the fuss is about as you’re bombarded with television ads for Medicare Advantage and prescription drug plans each fall. As a financial adviser, you should view the annual Medicare open enrollment season, which begins Oct. 15 and runs through Dec. 7, as an opportunity to remind older clients to review their Medicare coverage to see if it still meets their needs.

Each year, insurance companies can make changes to Medicare plans that can affect out-of-pocket costs for monthly premiums, deductibles and drug costs, and alter the makeup of healthcare providers or pharmacy networks. Changes in a client’s health condition or prescriptions can mean their current Medicare or drug plan is no longer the best choice. Doing nothing can be a costly mistake.

During Medicare open enrollment, individuals can move from original a la carte Medicare, which usually involves buying a separate Medicare Part D prescription drug plan and supplemental medigap policy, to an all-inclusive Medicare Advantage plan. In addition, they can switch from one Medicare Advantage plan to another or choose a different prescription drug plan.

Competition will be particularly heated during this fall’s open enrollment season as a result of upcoming changes in prescription drug plan costs for 2019 and the ability of Medicare Advantage plans to offer some new benefits, such as adult day care, home support and caregiver support services.

Decisions about prescription drug plans for 2019 can have an enormous impact on a retiree’s budget. A new analysis by The Senior Citizens League of the most frequently prescribed brand name drugs found there could be more than a $1,000 price difference among Medicare D prescription drug plans for the very same drug.

For example, the diabetes drug Novolog Flexpen ranged from a low price of $37 through the Silver Script Choice plan and a high price of $2,012 through the Anthem Blue Medicare RX Premier plan, where the drug is not on the plan’s list of covered drugs, known as a “formulary.”

“One look at the price comparison chart illustrates why Medicare beneficiaries need to check and compare drug plan prices during this fall’s Medicare Open Enrollment,” said Mary Johnson, a Medicare policy analyst for The Senior Citizens League who performed the price comparison using the Drug Plan Finder tool on the Medicare website. “To get the lowest costs and best plan, people need to compare plans based on all the drugs they take.”

Medicare’s online Drug Plan Finder shows the combined cost of drugs and the premium, with the lowest-cost plan displayed first, Ms. Johnson explained. In addition, consumers should compare prices between in-network walk-in pharmacies and mail-order options, which can vary significantly.

The National Council on Aging offers a free online guide to Medicare Open enrollment. NCOA also provides an online questionnaire to help Medicare beneficiaries compare plans and get free, detailed information from licensed benefits advisers. Free one-on-one counseling is also available nationwide through State Health Insurance Program counselors or by contacting the local Area Agency on Aging.

Medicare A, B, C and D’s

Medicare comes in two flavors: original Medicare and Medicare Advantage.

Original Medicare, used by most seniors, includes Part A hospital coverage and Part B coverage for outpatient services anywhere in the United States that accepts Medicare. Part A is free for most beneficiaries and the Part B standard premium of $134 per month is expected to remain the same in 2019, although an official announcement about 2019 premiums won’t occur until later this year.

High-income beneficiaries, defined as individuals with income of more than $85,000 and married couples with joint income of more than $170,000, pay more for Part B.

Those enrolled in original Medicare usually add a Part D prescription drug plan, which involves a monthly premium as well as a surcharge for high-income beneficiaries. The average prescription drug plan premium is projected to be about $32.50 a month in 2019, down slightly from this year. However, premiums for specific plans vary from year to year.

Medicare Advantage plans, sold by private insurers, include Medicare Part A and Part B, and most also include prescription drug coverage. Many Advantage plans offer additional benefits, such as vision and dental care, that are not covered by original Medicare. Medicare Advantage members pay the standard Part B premium and, in some cases, an additional monthly amount, but they do not need a separate Medigap or prescription drug policy.

In exchange for generally lower monthly costs, all-inclusive Advantage plans usually restrict access to a network of doctors and medical facilities in a specific geographic area, and they may require prior approval to consult a specialist.