Medicare open enrollment for health care coverage in 2020 begins Tuesday, Oct. 15. While most of the 60 million Medicare beneficiaries enrolled in the nation's primary health insurance program for retirees and people with disabilities usually ignore the annual opportunity to re-shop their coverage, they may want to pay special attention this year.
During the annual open enrollment season, which runs through Dec. 7, Medicare beneficiaries can switch health and drug plans for 2020, with coverage beginning on Jan. 1. If they do nothing, they will continue in their current plan.
"Plans change and your needs change," the Centers for Medicare and Medicaid Services noted in a recent blog highlighting the importance of the 2020 open enrollment season.
New rules take effect next year governing prescription drug coverage, changes in out-of-pocket costs, expanded benefits under Medicare Advantage plans and the elimination of some popular supplemental Medigap plans for people who turn 65 after Jan. 1.
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There are two main ways to get your Medicare coverage—Original Medicare and Medicare Advantage.
Original Medicare includes Part A medical insurance, which covers hospital costs, and Part B medical insurance, covers doctors' fees and outpatient services. If you want drug coverage, you can add a separate Part D prescription drug plan.
You can also add a Medicare supplement insurance policy, commonly known as Medigap, to help pay your out-of-pocket costs. Some people who have retiree health benefits through a former employer may not need to buy a Medigap policy or Part D plan, but they still need to enroll in Medicare Parts A and B.
Part A is free for most retirees who paid FICA payroll taxes throughout their careers. The basic Medicare Part B premium is $135.50 per month in 2019, but higher-income beneficiaries pay more. CMS has not yet announced premiums and surcharges for 2020.
A Medicare Advantage Plan is an all-in-one alternative to Original Medicare. About one-third of Medicare beneficiaries choose these bundled plans, which include Part A, Part B and usually Part D. Most Advantage plans also provide extra benefits — such as vision, hearing and dental coverage, and complementary gym memberships — that original Medicare does not cover.
In exchange for typically lower costs and expanded benefits, most Medicare Advantage plans require members to use their in-network health care providers, and the plans often require prior approval to see specialists. Medicare Advantage members pay the Part B premium and, in some cases, an additional monthly plan premium. But Advantage members do not need to buy a Medigap policy (in fact, it's illegal) and usually do not need to buy a Part D prescription drug plan, so monthly premium costs may be lower (though out-of-pocket costs can be higher).
Advisers should urge their clients to check their mail for notices from their current Medigap and prescription drug plan providers, or all-inclusive Medicare Advantage plans, regarding any changes to their coverage for next year.
"Carefully review any materials and changes in costs or coverage that will happen in 2020 and decide if your current Medicare coverage will meet your needs for the year ahead," the CMS blog said. "Our new and improved Medicare Plan Finder makes it easier than ever to compare coverage options and shop for plans."
The Medicare Plan Finder tool was redesigned for the first time in 10 years in preparation for the 2020 open enrollment season.
Big changes for 2020
Several changes in Medicare health and drug plans are scheduled to take effect next year.
The Part D coverage gap, known as the doughnut hole, is closing in 2020, but people with high drug costs face an added challenge next year. The total out-of-pocket spending required to reach catastrophic coverage, where beneficiaries typically pay 5% of the cost of a drug, will jump by $1,250 in 2020, to $6,350.
People who turn 65 after Jan. 1 will no longer be able to buy Medigap policies that cover the Part B annual deductible, which is $185 in 2019. So instead of buying one of the most popular Medigap policies, Plan F, new enrollees in Medicare in 2020 and beyond may want to purchase Plan G, which covers all the same things as Plan F, except for the Part B deductible. People who are 65 or older this year can continue to buy Medigap Plan F, but a shrinking insurance pool could lead to higher premiums in the future.
Medicare Advantage plans will be able to offer more benefits next year to chronically ill enrollees, which could include meal delivery, transportation for grocery shopping and other errands and support for family caregivers.
Bottom line: There will be more Medicare choices next year and more tradeoffs. Clients should focus on what matters to them , whether it is access to their preferred doctors, lower monthly premiums or the best plan to help with their specific drug needs.