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Medicare, the government health insurance plan for disabled Americans and those over 65, has undergone some of the most significant changes since its inception in 2006.
Experts suggest that Medicare enrollees pay close attention to changes made in their plans, during the open enrollment period which lasts until Dec. 7.
Investopedia interviewed Tim Smolen of Statewide Health Insurance Benefits Advisors (a division of the Washington State Office of the Insurance Commissioner) about the ways in which enrollees may reduce the costs of their Medicare coverage and medical care. This interview was edited to ensure clarity and brevity.
How do Medicare enrollees choose the right plan to fit their budget and needs?
TIM SMOLEN : We highly recommend Medicare’s website. The Plan Finder Tool, which compares all Medicare Advantage Plans on the site is a great tool. The plans are offered on a local level. It makes sense, then, to visit this site because you can find the latest information on the available plans in your zip code and you will also get a wealth of detail about each plan, including coverage exclusions, out-of pocket costs, etc.
Many older adults find that prescription medications are very important. You can start the Plan Finder by entering your list of covered medications, along with dosage, strength and frequency. You can incur a large amount of cost in your out-of pocket costs and premium if you do this.
We would also suggest that people go ahead and download what's called the Evidence of Coverage form because the Plan Finder just has the headlines, right? It's going to say, 'Yes, we have a hearing aid benefit,' but it's not going to describe the details for you about what that means. Medicare Advantage Plans usually have conditions and qualifications for the extra benefits they offer.
Have a heart-to-heart conversation with yourself, or have a good friend interview you and say, 'Okay, what are your must-have things compared to your nice-to-have things?' Then, you won't get in there and get swamped with comparisons at this excruciating level of detail about stuff you don't really care that much about.
INVESTOPEDIA – How does someone choose between a premium that is higher or lower?
Tim Smolen: This is part of the conversation you should have before enrolling in a Medicare Supplement Plan. Some enrollees enjoy having a Medicare Supplement Plan. If Medicare pays then insurance will also pay. It’s predictable for some.
In general, what people prefer about Medicare Advantage plans is that they're going to have very low-cost premiums. Again, it depends on your location, but there are still many Medicare Advantage plans that have zero-cost premiums.
People are going to say, well, ‘I like that zero premium. I can put aside a little bit of money every month in case I have doctor's bills or in case I need to make my deductible, and I feel better about that, and I'm willing to live with the uncertainty about what my total costs are going to be because I like that zero premium.’
INVESTOPEDIA What can Medicare enrollees for Original Plan do if the current plan they have is too expensive?
You should not pay too much money for basic Medicare. Medicare Part A for most people is free, because they’ve paid enough into the Medicare Trust Fund.
But almost all people pay a Medicare Part B Premium. Standard premiums for 2024 are $174.70 but there are some who pay even more. There is a premium for individuals with high incomes, called IRMAA.
Looking ahead to January 2025, if you have a surcharge for your Medicare Part B insurance, it's worth checking to make sure that it's right. This is because the Medicare Part B premium is calculated based on your income for 2025. [on your taxes] In April 2024 you will receive a check based on the earnings from January through December 2023. Many people’s earnings drop significantly when they retire. That's not reflected immediately in their tax return. It's a very simple process to appeal that.
For low-income workers, the state pays their Medicare Part B Premium. It’s a big deal for people to get $175 back in their Social Security checks each month. It’s a pretty simple process. The application can be completed on the Social Security Website or by calling your local Medicaid office.
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