Two of the federal government's biggest programs help older Americans make ends meet in retirement. Social Security offers monthly income, but for many people, Medicare's healthcare coverage is worth even more.
Getting the most out of Social Security usually just requires making a single smart decision. But Medicare participants have the opportunity to make changes to their coverage every single year during the open enrollment period, which runs from Oct. 15 to Dec. 7.
The choices you make can help you tailor your healthcare coverage to your particular needs -- even as those needs change. Below, we'll go through three ways that you could save money by looking closely at your options during open enrollment.
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1. Switching from regular Medicare to Medicare Advantage or vice versa
Open enrollment gives you a lot of flexibility in deciding what kind of coverage you want from Medicare. If you've previously chosen to get traditional Medicare coverage, which includes hospital coverage under Part A and medical outpatient coverage under Part B, then you can switch to a Medicare Advantage plan. These plans are offered by private insurance companies and often offer lower premiums and more comprehensive coverage in exchange for limiting access to specific networks of healthcare providers.
Conversely, you can also choose to switch from Medicare Advantage back to original Medicare during the open enrollment period. That can sometimes work out well if the specific provisions of your Medicare Advantage plan charge relatively high copayments and deductibles and you need a lot of care. However, you'll still want to look at what your costs would be under both types of Medicare coverage to decide which might make more sense for the coming year.
2. Switching between Medicare Advantage plans
There's only one type of traditional Medicare coverage, but Medicare Advantage plan providers are allowed to vary their coverage terms significantly. You can therefore shop between Medicare Advantage insurers to find the plan that fits your needs best at the lowest possible cost.
Many people focus solely on monthly premium costs, but there's a lot more to a smart analysis than that. Looking at deductibles, copays, and out-of-pocket maximums is important in order to get the best sense of what you'll end up paying under a plan. If you find another provider that offers a better deal than the Medicare Advantage plan you have now, you can switch during open enrollment.
3. Adding, switching, or dropping prescription drug coverage
Finally, Medicare Part D offers coverage for prescription drug needs. Traditional Medicare participants need Part D in order to have their drug costs covered, while some Medicare Advantage plans include prescription drugs as part of their overall package.
People often find that their drug needs change over time in retirement, and making sure your Part D coverage is the best available can be a huge cost-saver. Different plans can have very different pricing, and you might find that a drug is covered under one Part D plan but isn't covered at all under another. You're allowed to switch Part D plans, add a plan, or remove your prescription drug coverage entirely during open enrollment.
Don't wait!
Making a smart choice about your Medicare coverage takes some time. However, the right decisions can save you hundreds or even thousands of dollars next year. It's worth taking a look at your Medicare coverage between now and Dec. 7 to find out whether making some changes could give you some vital savings.
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November 07, 2020 at 06:16PM
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