Personal finance

Medicare open enrollment ends Dec. 7. Here’s why it’s important to evaluate your 2023 coverage

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In between eating leftover turkey and hunting for bargains amid holiday sales, be sure to review your Medicare coverage, if you haven’t already.

The program’s annual open enrollment period, which began Oct. 15 and ends Dec. 7, is when you can make changes, which will take effect Jan. 1. Although you aren’t required to take action — your current plan generally would renew automatically — experts recommend determining whether it still is the best fit.

“It’s important for people to make sure their providers are still participating in their plan for 2023 [and] their medications will be covered at the most cost-effective price possible,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans. 

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“There’s nothing worse than finding out on Jan. 1 that your medications will now be costing you $1,000 more per year,” Gavino said.

Despite how prevalent changes are to plans each year, most beneficiaries do not compare their current coverage with other available plans. Just 29% did in 2020, according to a recent study from the Kaiser Family Foundation.

“Even without a change made by their plan or a change in health status, beneficiaries may be able to find a plan that better meets their individual needs or lowers their out-of-pocket costs,” the study said.

For Medicare‘s 64.5 million beneficiaries — 56.6 million of whom are age 65 or older — this current enrollment period is for making changes related to prescription drug plans (Part D) and Advantage Plans (Part C). Advantage Plans deliver Part A (hospital coverage) and Part B (outpatient care) and usually include Part D.

If you already are enrolled in an Advantage Plan or drug plan, you should have received a packet explaining changes to your coverage for 2023. This could include adjustments to monthly premiums, copays, deductibles, coinsurance or maximum out-of-pocket limit, or changes to drug coverage. Additionally, doctors and other health-care providers move on and off plans from year to year, as do pharmacies.

Be aware that while you can change your Advantage Plan between Jan. 1 and March 31 if you discover it’s not a good fit, that’s not the case for standalone Part D plans.

Advantage Plans are offering more benefits

If you shop for Advantage Plans, you may find they generally are offering more in the way of extra benefits, said Danielle Roberts, co-founder of insurance firm Boomer Benefits. Many plans also have no premium, although you would still be responsible for your Part B premium.

In addition to dental, vision and hearing or gym membership, extras could include things such as a credit — say, $200 or $400 per year — for over-the-counter medicines and other health-care supplies; a Part B premium “buyback,” meaning your plan refunds you a portion or all of your Part B premium, which is $164.90 for 2023; and transportation to and from doctor’s appointments or other providers.

However, while the added benefits can be appealing, it’s important to know that those extras can change from year to year, Roberts said. And, she said, you should make sure the plan meets your medical needs before considering additional benefits.

Here’s what’s new with Part D coverage

The Inflation Reduction Act, which became law in August, ushered in some changes to Part D coverage.

Starting Jan. 1, there will be a monthly $35 cap on cost-sharing for insulin under Part D; some plans may already offer a $35 cap. Part D deductibles also won’t apply to the covered insulin product. For beneficiaries who take insulin through a traditional pump, which falls under Part B, the benefit starts July 1.

Additionally, there will no longer be any cost-sharing for recommended inoculations under Part D beginning Jan. 1, including the shingles vaccine.

Other provisions from the new law that are intended to reduce Part D spending take effect in later years.

This includes eliminating an existing 5% coinsurance in the so-called catastrophic phase of coverage, in 2024, and capping beneficiaries’ annual out-of-pocket Part D spending at $2,000, in 2025. Currently, there is no out-of-pocket limit, regardless of whether you get your coverage as a standalone Part D option or through an Advantage Plan.

Medicare also will be able to start negotiating the price of some drugs beginning in 2026.

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