What do those on Medicare need to do to prepare?

Question: What exactly should those of us currently on Medicare be doing to prepare for the Annual Enrollment Period?

This is Part 6 of my "Medicare Reset" series designed to prepare those on Medicare for the Annual Enrollment Period (AEP) that starts on Oct. 15 and runs through Dec. 7. AEP is the only time of the year when those on Medicare can make any and all changes to their plan lineup.

With up to one million people expected to have their current Advantage Plan discontinued, major benefit changes to many other Advantage Plans and Part D prescription coverage, as well as the highest increases in Supplement premiums in the past 20 years, more people than ever are going to need or want to change Medicare health and drug plans. If you're in one of these positions, it's going to be vital to educate yourself in order to make a wise decision. This series is written to help you do just that.

If you're just seeing the Medicare Reset Series for the first time, I highly recommend reading it from the beginning. You can find all prior editions on our Facebook Group, Ask the Medicare Specialist, or our website, www.GetYourBestPlan.com.

Answer: Let me break this down into two groups, those on Advantage Plans and those on Supplements, because the necessary preparation is different.

I'd like to state first that clients of ours at The Health Insurance Store need to do little or nothing to prepare for AEP because we do all the work for them. We mail every single Medicare client our "Recommendation Letter," which explains what changes, if any, they can expect in benefits and premiums for the upcoming year.

If their current plan is going to remain competitive, we advise them to renew. If those changes are going to be significant and costly enough that we feel a change in plan or company should be considered, we let them know and encourage them to make an appointment to compare their current plan to others we feel are going to offer better overall value.

How those on Advantage Plans should prepare

If you don't have an agent who does that for you, here's my advice on what you need to do to prepare for AEP. Get a copy of your Summary of Benefits. That's the document that discloses all your current plan details such as co-pays, coinsurance, and deductibles for all medical and prescription services as well as a description of any ancillary benefits, the "extras" like dental, vision, hearing, and OTC allowances you plan provides. Look it over well. You should always be familiar with it every year so you never pay an erroneous bill, get overcharged for prescriptions, and are aware of exactly what your extras are and how much you're entitled to so you can extract the most value from them.

Then look out for your Annual Notification of Change (ANOC) that's required to be mailed out by your Advantage Plan company no later than Sept. 30. Some people have already received their ANOC. In that book, which can be as many as 50 pages, is a section that illustrates all the specific changes that will take place in 2027 compared to what those benefits are currently. Those are the only pages in that document that matter in my professional opinion. Look them over well!

In Western Pennsylvania, for the majority of people on Advantage Plans, there are going to be significant and concerning changes in 2027, specifically a huge increase in hospital co-pays, as much as $1,700 on many of the most popular plans, as well as the introduction of a $700 prescription deductible on plans that currently have a $0 deductible.

Make sure you know exactly how any changes are going to affect you based on your current health status and prescription usage as well as the potential for the financial strain in the event of a change in health or drugs. Don't make the mistake of just telling yourself, "I don't need to worry that my hospital co-pay is going up $1,500. I'm never hospitalized." My father wasn't either until he had eight separate five day or longer stays over a span of two years.

And don't panic if your plan has major changes that could be costly because there are still good options in Advantage Plans for 2027, including choices within the same company your current plan is with, that can eliminate or reduce the potential for higher out-of-pocket hospital costs or increased drug deductibles.

I also recommend you make a list of what you want most out of an Advantage Plan in order of importance. Are the lowest premiums most important? Lowest possible out of pocket medical and prescription costs? Getting the most dental coverage? Having a small or no prescription deductible? Having the largest hospital and doctor network? The days of any single Advantage Plan providing all of those are gone, so making this list can be helpful when deciding on an HMO or PPO for 2027. I ranked what I consider to be most important items to look for in Advantage Plans in Part 4 of this series that ran Aug. 24 on both our Facebook Group and website.

One other way those on Advantage Plans might want to prepare is to investigate the possibility of moving to a Supplement, learning about them and how they eliminate the concern of dealing with benefit changes each AEP.

Years ago, I predicted these big changes to Advantage Plans that we've seen in 2026 and 2027 were inevitable. I'm also predicting that in the years to come, Advantage Plans are going to continue to have higher premiums, increased out of pocket medical and prescription costs, a reduction or elimination of dental and other extras, as well as smaller networks of doctors and hospitals.

Out of pocket costs on Supplements never change, so enrolling in one eliminates the concern of co-pays for hospitalizations and services such as chemo, other infused medications, radiation, and injection therapy that can be thousands of dollars with Advantage Plans. Supplements also provide access to every doctor or hospital in the country who accepts Medicare, eliminating the concern of networks or losing access to hospitals who end contracts with Advantage Plan companies, which is also becoming quite common.

Once in a lifetime opportunity for many on Advantage Plans!

It now appears that over 1 million people currently on Advantage Plans, including tens of thousands in Western PA, are going to have their plan terminated in 2027.

This isn't a bad thing! Quite the opposite. Those whose plans are being eliminated will be granted what is known as "Guaranteed Issue" rights, a once in a lifetime opportunity to enroll into a Supplement at the "preferred premium," even if that person has, or has had in the past, serious health issues that normally would result in a denial of a Supplement policy.

If your plan is terminating you need to make sure you get all the facts and meet with an experienced, honest broker who will give unbiased information and advice regarding the Guaranteed Issue opportunity. Finding one may prove to be difficult because brokers don't get paid a full commission, and often no commission, to enroll someone who is losing their Advantage Plan and using Guaranteed Issue rights to enroll in a Supplement.

The agents at The Health Insurance Store always make recommendations that are in the best interest of our clients. We never let commissions, or lack thereof, influence us. So, if you get notification that your Advantage Plan will no longer be available in 2027, reach out to set up an appointment to learn about all your options, not just the select few plans that agents get paid commission to sell.

What do those on Supplements (Medigap) need to do to prepare?

As I explained, because what's covered and the out-of-pocket costs for medical care never change, there's no need for those on Supplements to go digging into the weeds or comparing companies to see who has the best benefits every year.

The one thing I do recommend for people on expensive Supplement letter plans C, F, and G, and I have been writing about it over and over the last couple of years, is look into moving to Plan N or a newer option called Innovative G that can save $1,000 to $3,000 per year in premiums while providing coverage for the same exact services with very little difference in out of pocket medical expenses.

Not only are there immediate savings, but based on an assumed 12% annual rate increase on all Supplement letter plans, N and Innovative G will save people who switch as much as $20,000 over the next 10 years!

Find out if you qualify to transition from expensive C, F, or G! Don't wait until it's too late and your Supplement has another 40% or 50% premium increase in the next two years and you can't pass underwriting. We continue to meet too many people who are being priced out of Plans C, F, and G, leaving them choosing between moving to an Advantage Plan or continuing to figure out how to pay for a Supplement they can't afford.

Stand Alone Part D plans need reevaluation

There is one thing that everyone on Supplements needs to do to prepare for AEP and that's evaluating their Stand-Alone Part D prescription drug plan. The first item of preparation is looking for any correspondence sent out by your company in the next few weeks. This is the time of year they will mail or email warnings if a drug that you're currently taking will not be covered next year or is moving from a reasonably priced Tier 1 or 2 medication to a Tier 3 or 4 that will become expensive. If that happens, you almost certainly will want to shop Part D plans.

We're still waiting for specifics, but we're hopeful the lowest cost Part D plans that currently have premiums from $0 to $20/month are going to stay in that price range. If that's the case, the only thing those who are on the inexpensive plans need to do is look out for any notifications that a drug they're on now won't be covered or going up in Tier in 2027. If neither happens, simply renew your current plan.

Those who have a Part D with monthly premiums over $20 need to shop and compare 2027 plans. A costly mistake millions of people on Supplements make is remaining on the same Part D plan year after year without shopping. We advise our clients each AEP whether it's best to stay on their current plan or if they need to send us an updated list of current medications so we can find the best value for the upcoming year. We take the time to do this because there are years where hundreds, even thousands of dollars can be saved by changing Stand Alone Part D plans or companies. With Medicare Part B and Supplement premiums going up along with everyday expenses like groceries and utilities, we realize how important it is to find our clients, most of who are on a fixed income, savings wherever we can.

For questions regarding today's topic or anything else Medicare related, or if you would like to set up an appointment to go over options for 2027, give the office a call, 724-603-3403 or email me personally, [email protected].

Distributed by Newsbank, inc.