When it comes to Medicare, there’s no such thing as one-size-fits-all. That’s because every person has individual health needs. Coverage varies based on where you live, which doctors and hospitals you prefer, and whether you want to pay more money upfront or pay as you go.
Even though your insurance needs might be wildly different from your neighbor’s, it’s likely you’ll both have at least a few of the same questions about Medicare. After all, there are a lot of factors to consider when signing up for coverage.
The process can be easier with some guidance. We consulted advisors to answer your five most pressing Medicare questions.
From many plans, how can I choose the best one for me?
It takes some legwork — and often some help. Start by asking yourself these questions recommended by Cindi Gatton, a board-certified patient advocate and founder of Pathfinder Patient Advocacy Group in Atlanta:
- Do I want a simple comprehensive plan or a combination of policies that are customized to my needs and life? Medicare Advantage plans tend to provide broad coverage in one policy while Original Medicare allows you to add on specific supplement plans to cover medications, doctors in different regions (if you split time between two homes), and more.
- Do my preferred doctors and hospitals participate with the plan option I’m considering?
- How have my health care needs changed from last year, such as new diagnoses, medications, treatments, or physicians? You may want a different set of benefits than you have with your current plan.
- Am I contemplating moving or have I recently moved into a new home? Many Medicare Advantage plans are limited to certain areas.
- Do I fully understand my financial “worst-case scenario” with a new plan compared to my current coverage?
To calculate how much money you’d need to cover all your expenses, add up the fixed costs that you’ll pay regardless of your health care needs, like monthly premiums for coverage, including Medicare Part B, Gatton suggests. “Then add variable costs, such as the out-of-pocket maximum you would be liable for if you have a serious illness or accident, as well as prescription drug costs.”
You can see the breakdown of individual Medicare parts here. Once you figure out your total, try to plan to have that amount set aside in your bank account each year, Gatton says. You’ll be glad you have it in case of a serious illness or injury.
How can I be sure I won’t need to change doctors?
If sticking with your current doctor is important to you, look at the provider networks covered by your Medicare options.
The terms “in network” and “out of network” are often misunderstood, Gatton says. In network means the provider has a contract with Medicare or the Medicare Advantage plan and accepts the plan’s fee for services.
Most doctors participate with Original Medicare, so you won’t often run into out-of-network doctors if you go that route.
But if your provider doesn’t have a contract with Medicare or the Medicare Advantage plan, then it’s out of network. That means the patient can be responsible for the difference between what the plan pays and what the provider bills, which can amount to a hefty sum.
How can I make sure my medications are covered?
The short answer: Talk to your pharmacist. They do far more than fill prescriptions and discuss side effects, says pharmacist Daniel Breisch, PharmD, of Mountain View Pharmacy in Bountiful, Utah. They must be well versed in the nuances of prescription coverage. That includes Medicare.
In fact, they might be your closest in-person resource for coverage information, considering that nearly 9 in 10 adults age 65 and older report they’re currently taking prescription medicine, according to a 2019 report by Kaiser Family Foundation. That report also notes that most older adults have prescription drug coverage through Medicare Part D but that 76% of those surveyed still think the cost of prescription drugs is unreasonable.
Medicare Advantage plans usually cover prescription medications. But even with coverage, plans have specific medications they cover. This list is called a formulary. They’re typically divided into tiers. And the higher the tier, the higher the price of the drug.
It’s important to note that you’re not always going to be locked into one specific medication. Many prescriptions have generic alternatives that may be covered by your plan. A pharmacist can help you figure out coverage for multiple medications.
“When considering Medicare benefits, it is always important to start with your pharmacist,” Breisch says. “I recommend getting a comprehensive medication list from them so you can have clarity on what plan you should choose.”
It’s also important to consider what pharmacy you use, Breisch says. Some plans will require you to use their pharmacy or incentivize you to switch your prescriptions over.
What’s the difference between HMO and PPO Medicare Advantage plans?
Medicare Advantage plans are structured into two main types of plans: health maintenance organization (HMO) plans and preferred provider organization (PPO) plans. There are a few differences between them:
- HMO: This type of plan typically limits coverage to doctors who contract with the plan. People with HMO plans also need referrals from their primary care physician (PCP) to visit a specialist, such as a dermatologist.
- PPO: Unlike an HMO, you can typically see a specialist without a referral from your PCP. This type of health plan contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. With a PPO plan, you pay less if you use providers in the plan’s network. But you can also see doctors outside your network.
Reminder: If you have Original Medicare, you can see any doctor who accepts Medicare. There are no individual networks.
Most Medicare Advantage plans are HMOs. But in some markets, newer plans that offer broader PPO network types are also available. HMO plans often have the lowest monthly premiums outside of the Part B premium.
“They can be advertised as the lowest cost plans, and they are relative to what you pay every month if you don’t use any health care,” Gatton says. “However, many plans do have high out- of-pocket maximums that can be reached if an accident or illness occurs, making them more expensive for high health care utilizers.”
Many Medicare Advantage plans offer additional benefits like vision and dental coverage, although these benefits also require services to be delivered by in-network providers to be covered. HMO plans have specified service areas, so they may not be the best option for individuals who travel frequently or have second homes.
Do I have to enroll in Medicare every year?
No. As long as your premiums are paid, your plan will automatically renew. But even though you don’t have to go through the enrollment process each year and start from scratch, it’s a good idea to review your coverage annually, Gatton says.
“Individuals with coverage through a Medicare Advantage plan should absolutely evaluate their plan’s coverage, including prescription drug coverage, based on their needs every year,” she says. “In most cases, it’s possible to switch from one Medicare Advantage plan to another without having to answer medical questions that could result in the switch being denied.”
Provider networks and out-of-pocket maximums tend to change annually, so it’s crucial to confirm that your preferred doctors and hospitals are still in your plan’s network. Check to make sure your medications are still covered too. Just because they’ve been covered in the past doesn’t mean that coverage will continue.
Exploring new plans may also help you find more attractive benefits. For example, Gatton says there are new Medicare Advantage plans on the market that have broader networks and may not require PCPs to make specialist referrals.
A review might also highlight big changes in your plan. For example, it might have a reduced service area and you now live outside its borders. Or your plan might not renew its Medicare contract. In some cases, Medicare may terminate its contract with your plan.
If your Medicare plan doesn’t renew its contract with Medicare for the coming year, your Special Election Period will run from December 8 to the last day of February of the following year. If you have Medicare Advantage and don’t enroll in a new plan by the date that your current plan ends its contract with Medicare, you’ll be automatically returned to Original Medicare.