Four Good Reasons to Take Another Look at Your Medicare Plan

happy retired couple snuggling in the kitchen discussing their MedicareAttention, Medicare recipients!

Once a year, between Nov. 15 and Dec. 31, the government gives you a chance to change your minds about some aspects of the program that you previously chose.

While it can be difficult to switch from one Medigap or Medicare Advantage plan to another without encountering limits on preexisting conditions and flat-out refusals based on your overall health, if you are really unhappy, now is the time to explore the possibilities of switching. Check out the options using the government's Medicare database.

1. Consider Your Drugs
Start by reviewing the Medicare Part D prescription drug plan you've selected. It has likely changed a lot due to health care reform.The most important thing to consider is the shrinking "doughnut hole." Previously, if you spent more than $2,830 on drugs in a single year, you would hit a gap in coverage known as the doughnut hole. At that point, you would have to pay all your own drug costs until you spent a total of $6,440 per year, then coverage would kick back in.

In 2011, the initial coverage limit -- the point where you reach the doughnut hole -- increases $10 from $2,830 to $2,840. At that point in 2010, you would have been expected to pay 100% of drug costs until you had spent an out-of-pocket total of $4,550. Then catastrophic coverage would kick in and pay 95%.

In 2011, thanks to the beginnings of health care reform, once you hit the (slightly smaller) doughnut hole, you'll pay 93% of the costs of generic drugs, while the government pays 7% (in 2012, it will pay 14%), and 50% of the cost of branded drugs, while the drug companies eat the other 50%.

Jim Yocum, executive vice president of DestinationRx, which created and maintains the government's online Part D prescription drug plan search engine, says these changes to the plan affect benefits significantly for many people.

To use this calculator, you'll need a list of every drug you take. Once you have all your drugs identified, the calculator will figure out the cost per dosage, taking into account the doughnut hole, and give you a list of drug plans at pharmacies in your neighborhood that cover your needs at the lowest cost.

The difference in cost between the most expensive and the least expensive plans is about 16%, but as Yocum says, 16% of thousands of dollars is a lot of money.

One thing the calculator can't always do is take into account the $4 for 90 generic drugs plan available at stores like Costco and Walmart. It's wise to find out if you take a drug that's available at a very low rate at one of these or other outlets. When you run the calculator, make sure it reflects this price. If it doesn't, then just leave the drug out of the calculator because you may be ahead of the game to purchase it outside of Medicare.

2. Be Prepared to Spend More
The cost of Part D prescription drug coverage will rise next year for some people. Beginning in 2011, singles with incomes above $85,000 and couples with adjusted gross incomes above $170,000, will pay more for prescription drug coverage. If your income qualifies you for this change, Yocum says it is particularly important to look for a plans whose overall costs are lower.

3. Take Advantage of New Preventive Care
Beginning in 2011, every Medicare recipient will be entitled to a free wellness exam every year. Free cancer and diabetes screenings will be included. Call your doctor and make an appointment.

4. Reconsider Your Medicare Advantage Plan
If you have selected a Medicare Advantage plan instead of Parts B and D and Medigap, expect changes this year. Medicare Advantage plans cost taxpayers more than regular Medicare. Beginning in 2011, the government won't pay the difference. The result is that some plans are going to offer less and while the cost will be level or down slightly in 2011, you may not like the changes. If you're signed up for a Medicare Advantage plan, use the government's calculator to check it out. It might be time to make a change.

On the plus side, if you are covered by a Medicare Advantage plan, thanks to health care reform, your doctor can no longer charge you more than Medicare pays so this could offset other increases. The government also has instituted an out-of-pocket maximum of $6,700 in 2011, a big cost-saver for some people.

If you are thinking of switching back to traditional Medicare with a Medigap policy -- provided you can find an insurance company to take you without high premiums and a long-term limit on a pre-existing condition -- do some calculations first. Traditional Medicare with Medigap doesn't cover vision or dental, which most Medicare Advantage policies do. Plus, you'll need to buy Part D prescription drug coverage separately. The pluses are increased flexibility, choice and the ability to take the coverage anywhere. has an excellent piece by attorney and author Joe Matthews that will answer many questions about choosing a Medigap policy as opposed to Medicare Advantage. I asked Matthews why it has to be so complicated. He summed it up this way:

"It's run by insurance companies and the government. What do you expect?"
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