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Are you prepared for Medicare open enrollment?

Posted on November 3, 2016

Medicare’s annual open enrollment period begins Oct. 15 and runs through Dec. 7. During this period, Medicare beneficiaries are free to select new plans. The experts who track annual changes in Medicare know that the terms and costs of plans change so much each year that millions of beneficiaries could save money in 2017 and improve their health coverage by picking new plans.

Millions of beneficiaries could save money in 2017 and improve their health coverage by picking new plans.

They also know that if as many as one in four of you do so, that would be a huge shift in behavior. Medicare is so complicated that beneficiaries usually do nothing during open enrollment. But doing nothing is not really doing nothing. It amounts to permitting the automatic renewal of the coverage you already have, even if it is no longer (or never was) your best insurance plan.

By now, all Medicare beneficiaries with private insurance should have received copies of their insurer’s 2016 plan documents. These go by the snappy names of ANOC (annual notice of change) and EOC (evidence of coverage). Read the shorter ANOC and use the more encyclopedic EOC as a reference document. But do read them.

Next, understand the basic choices you have. There are only a few, so this part of open enrollment need not be complicated at all.

Original Medicare includes Part A hospital coverage and Part B insurance for doctors, outpatient expenses and durable medical equipment. People with Original Medicare can choose whether to also buy a Medigap policy, which is also called a Medicare supplement policy. Medigap policies fill, to varying degrees, the holes in Original Medicare. The biggest hole is that Part B pays only 80 percent of covered expenses, leaving beneficiaries on the hook for the other 20 percent. As anyone with major health issues knows, that can be 20 percent of a big number.

READ MORE: Signing up for Medicare? Read this cautionary tale first

If you don’t have Medigap or even if you do, you can select a Medigap plan during open enrollment. There are 10 different Medigap “letter” plans. Coverage within each type of plan must be identical. This means that all letter A plans are the same, all letter B plans and so on. But premiums can and do vary a lot. So shopping around for the best rate is a must. Specific coverage requirements of the various plans have not changed much since I wrote about them.  You can find them on page 82 of “Medicare & You 2017.”

Unfortunately, Medigap policies may be very pricey for people once they’ve passed the early period when they first were eligible for Medicare. During this period, most people had what is called “guaranteed issue” rights to Medigap. This means that private Medigap insurers had to sell them a policy, regardless of their age or medical condition. They could not “underwrite” them to tack on higher premiums or coverage restrictions tied to a person’s pre-existing medical conditions.

People with Original Medicare also have the option during open enrollment of buying a Medicare Advantage plan.

Once that period has ended, switching from one Medigap plan to another may be expensive. And if you have serious medical issues, insurers may not even have to sell you a Medigap policy once you’re no longer protected by those guaranteed issue rights.

People with Original Medicare also have the option during open enrollment of buying a Medicare Advantage plan. And those with Medicare Advantage can pick a different Medicare Advantage plan. They cannot be denied coverage or required to pay more because of pre-existing conditions. (An exception to this rule is that people with end stage renal disease are not eligible for Medicare Advantage plans.)

People with Original Medicare who switch to Medicare Advantage cannot keep their Medigap plan should they have one. The two plans provide overlapping coverage and insurers are not allowed to sell both of them to the same individual.

Everyone with Medicare — the roughly 70 percent with Original Medicare and the 30 percent with Medicare Advantage — also have the option during open enrollment of changing their Part D prescription plan.