5 Mistakes People Make During Medicare Open Enrollment

Take the time to do your homework

Medicare's Open Enrollment Period comes around Oct. 15 through Dec. 7 every year. This is your big chance to make a change from the Medicare plan you currently have to one that better suits your needs.

Every insurance company is going to want a piece of that pie and that means you will likely be bombarded with advertisements and promotions that leave your mailbox looking like a stuffed turkey. The temptation is to toss all of that paper into the trash and keep the plan you have. That may not always be the best idea. You may want to take the time to wade through that information to get a better deal.

Here are the five most common mistakes people make during Medicare Open Enrollment and how to avoid them.

You Don't Sign Up for Prescription Drug Coverage

Prescription drugs on smartphone

The knee-jerk response is to not purchase prescription drug coverage with a Medicare Part D plan if you don't take medications. Why would you pay monthly premiums for something you don't need? Because you could face a lifetime of Part D late penalties when you finally do sign up.

As with most things in life, there is an exception. If you have creditable drug coverage from another source (an employer-sponsored health plan, Indian Health Service, Program of All-Inclusive Care for the Elderly, TRICARE, or Veteran's Health benefits), you can wait to sign up for a Part D plan without facing penalties. Creditable coverage means that the drug coverage is as good as Medicare. Your other health plans have to notify you if they meet this standard so you can make an informed decision about signing up for Part D.  

TIP: If you do not take prescription medications and do not have creditable coverage from another health plan, pick the Part D plan with the lowest premium so you get coverage at the least cost.

You Do Not Read the Annual Notice of Change for Your Plan

At the end of every year, your Medicare Advantage or Part D plan will send out an Annual Notice of Change. This document outlines what changes are coming in the new year regarding costs and coverage.

Premiums, deductibles, coinsurance, and copayments don't come cheap and price hikes could surprise you come January 1 when the new plan kicks. Losing coverage for services or medications you use on a regular basis would cost you even more in out of pocket expenses.

TIP: Read your Annual Notice of Change every year to make sure you can afford the updated plan in the coming year and to make sure you are covered for the health care you need.

You Sign Up for the Same Plan as Your Friend or Spouse

Many people sign up for a specific health plan based on recommendations from people they know. Maybe a friend or neighbor or even your spouse has had a good experience with a plan. Some people may choose a plan based on its brand name and reputation. While this may bode well for good customer service and coverage benefits, do not let these recommendations in and of themselves make the decision for you.

Your health is unique to you. No one shares your medical history. They may not be on the same medications or use the same doctors. In this regard, your medical needs will differ from your friends and family. You need to find a plan tailored to your individual situation first.

TIP: Recommendations from family and friends may help you to decide between plans but make sure those plans meet your personal needs first and foremost.

You Don't Switch to Keep Your Doctors

Unlike Original Medicare, which works the same anywhere in the country, Medicare Advantage and Part D plans work in local networks. That means that you can only use healthcare providers within that network or you will pay for their visits out of pocket. Those costs can add up quickly.

Networks can change at any time. That means a Medicare plan could drop a provider from its network, not because there are any issues with the provider per se but because there is disagreement over contractual requirements. If you want to save money and keep the doctors you know and trust, or if there is a doctor you want to go to that is not in your current network, you may want to pick a plan that includes that doctor in its network.

TIP: Pick a plan that has all your healthcare providers in the network.

You Do Not Shop Around for a New Plan

You may think you already have the perfect plan. It covered all of your health needs the past year and it came at a reasonable cost. It also delivered satisfactory customer service. Does that mean it is going to be the best plan for you in the new year? Not necessarily.

Insurances companies have a goal to provide quality health care but in a capitalist society, their main intention is to turn a profit. With dollars and cents running the show, insurers are competing with each other in the market and this could work to your advantage. The truth is there may be several plans that may meet your needs. Take the time to see how they compare on costs and pick the one that will save you the most money.

TIP: Visit https://www.medicare.gov/find-a-plan/questions/home.aspx to compare the costs and coverage of different plans.

The Biggest Mistake

The biggest mistake people make during Medicare's Open Enrollment is not making a change. Too many people take the path of least resistance and keep their current plans without further investigation. It is always worth a closer look to see if you can get better care at an afforable price.

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