Why Older Adults Should Review Their Medicare Coverage Each Year
8 min read
Should you review your Medicare coverage every year? Yes. Medicare Advantage and Part D plans can change their premiums, out-of-pocket costs, covered drugs, provider networks, and extra benefits from one year to the next. Your health and prescription needs may change, too.
Reevaluating your Medicare coverage each year can help you make sure your plan still covers the care and medications you need at a cost you can afford. It also gives you a chance to compare your current coverage with other options during Medicare Open Enrollment.
Your Annual Medicare Coverage Check: 6 Steps
Use this checklist to see if your current coverage will still meet your health care and financial needs next year.
| Step | Ask Yourself | What to review |
| 1. Check your health needs | Has my health changed this year? | Consider new diagnoses, injuries, treatments, or ongoing care you may need. |
| 2. Check your provider network | Are my doctors, hospitals, and pharmacies still in-network? | Medicare Advantage networks can change each year. |
| 3. Check your prescriptions | Will my medications still be covered? | Compare your medications with your plan's drug list and check for cost or coverage changes. |
| 4. Check additional benefits | Will I need dental, hearing, or vision care? | Original Medicare offers limited coverage for these services. Some Medicare Advantage plans provide additional benefits. |
| 5. Check travel coverage | Will my plan cover me where I plan to travel? | Original Medicare works nationwide with providers that accept Medicare. Medicare Advantage may limit routine care to a specific service area. |
| 6. Check your costs | Does my plan still fit my budget? | Review the premium, deductible, copayments, coinsurance, and yearly out-of-pocket limit. |
Explore the benefits of evaluating your Medicare coverage annually and what factors you need to consider.
Why is it important to review my Medicare plan annually?
If your current Medicare plan isn’t working for you, you have choices. You may be able to find a plan that costs less money, covers the medications you need, and gives you more flexibility in the doctors you see. You may even be able to get coverages not included under original Medicare—such as dental, vision, and hearing care.
When can I make changes to my Medicare plan?
Medicare recommends taking the time to review your plan (and any notices you’ve received about your coverage) in September and October.
Then, during Medicare’s Annual Open Enrollment Period (Oct. 15 to Dec. 7), you can make the changes you want. These are the basic changes you can make during that timeframe:
- Change from original Medicare to a Medicare Advantage plan (or vice versa).
- Change from one Medicare Advantage plan to another.
- Join a Medicare (Part D) drug plan, or swap one Part D plan for another.
- Drop your Medicare drug coverage completely.
- Swap a Medicare Advantage plan without drug coverage for one that offers drug coverage (or vice versa).
Any changes you make during the Annual Open Enrollment Period will take effect on Jan. 1 of the following year.
What are the most common Medicare mistakes?
According to Samuel Kina, SVP of Economics & Research at Picwell, Inc., Medicare choice errors can be unnecessarily costly. These errors range from selecting inappropriate coverages or not enrolling in a plan by a specific deadline. Even worse, these kinds of mistakes have financial consequences that can build over time.
In this excerpt from his book “It's Not That Complicated: The Three Medicare Decisions to Protect Your Health and Money,” author and Medicare expert Ari Parker, JD gives a jarring real-world example of the high price of Medicare choice errors:
“At one of our recent Medicare Made Simple presentations, a 72-year-old attendee, Diane, was getting ready to retire and wanted information on how to apply to enroll in Medicare. She loved her employer-provided coverage. And she assumed, because she had worked continuously past age 65, that she could delay taking Medicare without hassle.
“When it came time to notify Social Security of her intent to enroll in Medicare, Diane learned two pieces of bad news:
- She wasn’t eligible to enroll in Medicare Part B by way of her Special Enrollment Period because her employer only had 18 employees.
- Because she missed her sign-up window, she would pay a 70% Late Enrollment Penalty on her Medicare Part B premium for the rest of her life.”*
Despite cautionary tales like this, Medicare choice errors are common. According to Kina, a team of economists who analyzed Medicare Advantage plan selections found that just 10% of older adults chose the optimal plan:
People were overspending by more than $1,000 per year on average, and more than 10% of people were overspending by more than $2,000 per year,1 ” he explained.
The good news is that you can prevent these pricey mistakes—and save money—simply by reviewing your Medicare coverage each year.
What should I check during an annual Medicare plan review?
Reviewing your Medicare plan doesn’t have to be time-consuming—all it takes is 10 or 15 minutes. These questions can help you assess your plan and make any changes you need:
- Have your health care needs changed in the past year? For example, did you sustain an injury that requires ongoing care, or were you diagnosed with a chronic illness?
- Are your doctors still considered in-network? If you have a Medicare Advantage plan that only covers a specific list of providers, facilities, and/or pharmacies, you'll want to have the most up-to-date network information. Covered providers can change from year to year, and most people prefer to stick with the doctors they already see.
- Will your prescriptions be covered under your current drug plan? Make a list of the medications you take and check them against the formulary for your Part D or Medicare Advantage plan with prescription coverage. Hint: insurance carriers publish their drug list each fall.
- Do you need additional benefits—for example, dental, hearing, or vision? These services have very limited coverage under original Medicare. If you think you'll need these coverages in the coming year, you may want to look into a Medicare Advantage plan that offers them.
- Will you be traveling a lot next year? If you have original Medicare, you're covered nationwide for any provider that accepts Medicare. But if you have a Medicare Advantage plan, your coverage may be restricted to a certain geographic area. You can avoid high medical bills by making sure your Medicare plan follows you wherever you go.
- Have your financial needs changed? Consider how your plan fits into your current budget, and whether you need something more affordable. In addition to the monthly premium, you'll want to consider other out-of-pocket Medicare costs such as deductibles, coinsurance, and co-payments. Tightening your budget may be more of a priority right now that having a broader choice of providers.
You’ll also want to compare plans, particularly if you have Medicare Advantage. With a bit of comparison shopping, you may be able to find a new plan that offers better coverage at a lower cost.
When is the best time to review your Medicare plan? Ari Parker recommends reviewing Medicare Advantage and standalone Part D plans every fall. Medigap (supplemental coverage) plans should be reevaluated every three to four years.
Frequently asked questions (FAQ)
Why should I compare Medicare plans every year?
Medicare Advantage (Part C) and Part D (prescription drug coverage) plans can adjust their costs, coverages, provider networks, pharmacies, and covered medications each year. Your health care needs and budget may also change. Comparing plans helps you decide if your current coverage is still the best fit, or if another plan could provide better coverage or lower costs.
Can a Medicare Advantage plan change its benefits?
Yes. A Medicare Advantage (Part C) plan can modify its premiums, deductibles, copayments, provider network, drug coverage, and additional benefits from one year to the next. Your plan will explain upcoming changes in its Annual Notice of Change (ANOC), which arrives in the fall.
When should I review my Medicare coverage?
It’s a good practice to reevaluate your Medicare coverage each fall after receiving your Annual Notice of Change, typically in September. You can then compare your options and make changes during Medicare Open Enrollment, which runs from Oct. 15 through Dec. 7 each year. Any changes you make typically take effect on Jan. 1.
Where can I get free help comparing Medicare plans?
Choosing the right Medicare plan is a personal journey. There’s no one-size-fits-all plan; everyone’s needs and situation are unique. That’s why it’s essential to do your homework before enrolling in a Medicare plan—even if it’s one highly recommended by your family or friends.
You can also get in touch with a State Health Insurance Assistance Program (SHIP). These local organizations offer expert, unbiased counseling to Medicare-eligible people as well as their families and caregivers. Best of all, this service is 100% free. Find your local SHIP now.
*Excerpted from "It's Not That Complicated" Copyright © 2022 Memoir, Inc. dba Chapter, All rights reserved. No part of this book may be reproduced without the prior written permission of the copyright owner.
Source
1. Gruber, J., B. Handel, J. S. Kina and J. Kolstad. Managing Intelligence: Skilled Experts and Decision Support in Markets for Complex Products (GHKK, 2021). Found on the internet at https://www.nber.org/papers/w2703
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