It happens during Medicare open enrollment every year: Older Americans’ mailboxes and TV screens fill up with pitches for enrolling in Medicare-related insurance.
If you call the number on the ad, you’ll likely end up talking to a licensed insurance agent. The bad news is that if the person works exclusively for one insurer, you could be stuck for a whole year with a policy that’s inappropriate for you.
“The [consumer] listens to the features and benefits of the plan, and the agent tells them why it’s so great,” said Matt Chancey, a certified financial planner based in Orlando. “Then they sign up and don’t realize until later that it didn’t actually fit their needs.”
Open enrollment, which runs through Dec. 7, is for adding or changing coverage related to Medicare Part C (also called an Advantage Plan) and Part D (prescription drug coverage).
MEDICARE PARTS EXPLAINED
Part A. This covers inpatient stays at hospitals, skilled-nursing facilities and the like. As long as you’ve paid into the system by working the equivalent of about 10 years, you won’t pay any premiums. If not, you’ll have to pay for it.
Part B. Everyone pays premiums for this coverage, which generally includes outpatient services and supplies. Higher incomes generate higher premiums: If you’re single and have an income of more than $85,000 or are married with a joint income of at least $170,000, you will pay more.
Part C. Also called Medicare Advantage, the program lets people choose from a Medicare-approved private insurance plan instead of Parts A and B. Each plan comes with differing variables, ranging from coverage to deductibles and co-pays.
Part D. This is prescription-drug coverage. It often ends up being included with an Advantage Plan. If you have Parts A and B instead of an Advantage Plan, you can purchase Part D coverage separately. Although this is voluntary coverage, if you don’t sign up during your initial enrollment time and change your mind later (if you don’t meet an exclusion) you’ll likely pay a penalty that will last forever.
Any changes made during this window generally take effect Jan. 1. If you subsequently discover that your doctor is out-of-network or the pharmacy filling your prescriptions is far away, you cannot change your plan until this time next year.
If you’re located in more populated areas, there are typically multiple plans available. At the Medicare Plan finder, you can plug in your information (including current medications you’re on) and options will appear.
In other words, if you’re up to the task of sorting through what’s presented and weighing your options, you can bypass an agent.
Alternatively, you can search for a broker who specializes in Medicare-related insurance in your state. That person, who is paid a commission by the insurance company whose plan you choose, ideally will be well-versed in all aspects of Medicare and will work in your best interest.