Medicare Open Enrollment: Do You Have the Right Plan?

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Open EnrollmentMaking the most of your health care coverage is hard enough when you only have private insurance to deal with. But if you're among the roughly 50 million people covered by Medicare, you have to juggle a bunch of different types of coverage -- including prescription drug plans and Medicare Advantage plans -- to help pay for the expenses that ordinary Medicare doesn't cover.

Every year, you get a chance to review your coverage to make sure it's working as well as it can for you. This year's open enrollment period began Monday and runs through Dec. 7.

Most people simply stick with their current coverage. And that's fine if the plan you chose gave you the coverage you needed at reasonable prices, and access to high-quality care in locations that were convenient for you. As the Medicare website suggests, these are some of the important factors to use in evaluating a plan.

But if any of those favorable traits were missing, it's worth it to look at what else is available. You'll almost always have enough plans to choose from that you'll be able to find at least one that will work well for you.

How to Pick a Better Plan

Shopping for health insurance is difficult even for those who are generally comfortable with financial affairs.

While you may have certain medical conditions or prescription drug needs that you already know about, it's impossible to guess with certainty what types of health care you'll need in the coming year. Moreover, finding the most important information -- and figuring out exactly what a given plan will cover -- can be a big challenge.

One good place to start is the Medicare Plan Finder, which allows you not only to determine which plans are available to you, but also to compare their features against one another.

As you review the information the finder gives you, pay special attention to the following:
  • The monthly premiums you'll pay, both for your regular health plan as well as for any prescription drug coverage.
  • Any deductibles you may be responsible for out of your own pocket before coverage kicks in, and what portion of any additional charges you'll have to pay as well.
  • Whether you can pick your own doctor.
  • Whether the plan covers the particular prescription drugs you need, as well as whether they're available in cheaper generic form and whether an approved pharmacy is nearby.
Medicare even allows you to get a custom-tailored report based on the drugs you actually use. By entering your personal Medicare number, you'll get personalized search results that take your medical history into account.

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Another thing to bear in mind is that there will often be a trade-off between how much you pay every month in premiums versus how much your copay is for doctor visits and prescriptions. All other things being equal, a plan with higher copays and lower premiums is best for someone who doesn't anticipate a lot of medical needs. Conversely, having lower copays can be worth paying a higher monthly premium for if you require substantial care or have multiple prescriptions.

On the other hand, don't forget to take a look at the other end of the spectrum: What will your maximum out-of-pocket expenses will be if you end up having a catastrophic event or other injuries or illnesses requiring extensive and expensive care? Ideally, you'll be able to find a plan that leaves you with low enough maximum liability that you can cover it from savings.

Don't Pass Up This Opportunity

It can be tempting just to coast through open enrollment without even thinking about making changes. All too often, however, Medicare recipients waste money by sticking with plans that aren't right for them.

By spending a little time and taking advantage of the resources at your disposal, you can make sure you'll get the best coverage at the lowest cost. Be sure to visit the Medicare website for more information.

Obamacare Myths
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Medicare Open Enrollment: Do You Have the Right Plan?

Myth 1: Obamacare is being partially funded by a $500 billion cut to Medicare.

Reality: Funding for Medicare will actually increase over the next 10 years. However, the rate of increase will drop, partially due to more aggressive prosecution of fraud and a reduction in overpayments to insurance companies.

In fact, the ACA has already increased funding to Medicare in some ways. It has increased the minimum rebate on drugs, extended coverage to smaller hospitals, set up public health screenings for Medicare recipients, and it introduced a discount to help cover the Medicare "doughnut hole" on prescriptions. The plan is to eliminate the doughnut hole by 2020.

Myth 2: Obamacare will introduce "death panels" that will severely ration care and will force elderly patients to commit suicide or submit to euthanasia.

Reality: Introduced by Sarah Palin in 2009, the idea that health care reform will lead to euthanasia is one of the most persistent lies myths surrounding Obamacare. There have been several versions of this claim; the most recent is that the Independent Payment Advisory Board will ration care and will make end-of-life decisions for patients.

In truth, the IPAB is basically powerless. It will make health care policy recommendations to Congress, which will then have the ability to pass or reject those suggestions. The president, in turn, will have the power to veto Congress' decisions -- as he can with any other piece of legislation.

Ironically, death panels already existed before health care reform -- but they were run by your insurance company. Insurers have regularly denied coverage for pre-existing conditions, canceled policies on sick patients, refused to pay for vital, life-saving operations, and otherwise made financially-based decisions about who would get to live and who would be left to die.

According to one congressional report, three insurance companies -- UnitedHealth (UNH), WellPoint (WLP) and Assurant (AIZ) -- saved $300 million by canceling policies on over 20,000 sick people over a five-year period. The new health care law will make many of these practices illegal. In other words, rather than creating death panels, Obamacare will actually abolish them.

Myth 3: Obamacare will force the middle class to pay for health care for poor people and illegal immigrants.

Reality: Many health care reform critics have argued that America already has a universal health care option: emergency rooms. After all, the argument goes, when people without insurance find themselves in desperate need of medical attention, they can always find help in ERs, which are required by law to open their doors to anyone in need of care. Consequently, critics claim, poor people can get health care without passing the charges on to the middle class.

But this health care isn't free -- in fact, standard treatment through a primary care physician is far cheaper than crisis care in an ER. Many hospitals aggressively bill emergency patients -- and their insurers -- to recoup the inflated costs of such care. Even so, they come up short.

So who covers the shortfalls? Well, a significant source of hospital funding is taxes. For the rest, hospitals make up their ER losses by inflating the prices that insured customers pay -- and according to the Center for American Progress, this amounts to a $1,100 yearly "hidden tax" on health insurance. Put simply, emergency room care is already funded by taxpayers and the insured middle class.

Granted, Obamacare will extend Medicaid to lower income families, and will subsidize health insurance for people who make up to 400% of the poverty line. On the other hand, it will also require people who can pay for health insurance do so, and will more aggressively prosecute Medicare fraud. More to the point, it will levy a 0.9% tax on households making more than $200,000 per year, and will increase taxes on medical machinery manufacturers, pharmaceutical companies, and insurers. Thus, it will, in all likelihood, actually reduce the burden on middle class families.

Myth 4: Obamacare is a socialist program.

Reality: Socialism is a system under which the government directly runs a nation's industries. Under this standard, New Deal programs like the Works Progress Administration and the Tennessee Valley Authority could, arguably, be considered socialist. After all, they represented instances in which the government directly employed people to build and administer power plants and other public works that generated income.

Obamacare, on the other hand, will work through private companies. Rather than directly providing health insurance, either through a national program or through some sort of public option, the government will require that people deal with private insurers. Far from competing with private industry, the health care law will likely give it a lot of new customers.

Myth 5: Obamacare will bankrupt small businesses by making them pay for their employees' health insurance.

Reality: The basis of this claim is a requirement that companies with more than 50 "full-time equivalent" employees must offer affordable health insurance to their workers. The insurance in question must not cost more than 9.5% of the employee's annual salary and must pay for at least 60% of covered health care costs.

A big part of the disagreement over the impact of this requirement lies in how you define a "small business." According to the government, the cutoff line between a small and a large business is 50 "full-time equivalent" employees. In other words, if a company's weekly work load totals more than 1500 hours -- the equivalent of 50 employees working for 30 hours per week -- then it is, officially, a large business, and is required to provide a competitive health insurance option.

As a side note, Obamacare contains a pretty significant tax break for businesses with up to 25 employees that offer health insurance.

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