The Medicare open enrollment period has started. There are some issues with the plan assistance tool, Medicare Plan Finder. I think it is worthwhile to go over some general thoughts and decision rules about open enrollment. We’ll talk generally and then specifically for Medicare.
Picking an insurance plan, be it Medicare, be it group insurance through work or individual insurance on the Exchange is tough. It is a cognitively demanding task that has multiple threads of uncertainty pulling your decision processes in conflicting directions.
I would like to consider myself extremely well informed about insurance and benefit design. On this subject, I believe that I’m at least as smart as an average bear looking for a picnic basket. However, I know my limitations. I am very confident that I won’t make a horrendous choice. I am also very confident that I won’t make the optimal choice. And I’m okay with that. When I have to choose an insurance product, I engage in a strategy that minimizes my regret. I’m okay with sacrificing some perfection as long as I know that my eventual choice is at least good enough. The extra two or three or thirty hours of gaming out every potential scenario is not worth the time nor the stress.
How important is access to a particular set of doctors or hospitals? This will be a mixture of your health status and the learning/hassle costs of switching docs. Right now in my life, I am lucky enough to be in good health so I don’t have any investment in a relationship with my primary care provider nor do I have any regular specialist visits. I value those relationships at a fairly low value. My 66 year old mother is a medical zebra. She has a history of weird conditions. She greatly values the team of docs and hospitals that have cared for her needs over the past fifteen years. Switching to a new team would be extremely painful for her.
How much can you afford in a worse case scenario versus how much can you pay out each month? This is a tough trade-off. All else being equal, a higher monthly premium means more protection in a worse case scenario (that is less likely in the ACA as there are an increasing number of gold and silver plans with the same out of pocket maximum as bronze plans but merely take a lot more time/claims to get there). For a given monthly premium, what are you willing to concede to get a targeted level of protection? How important is a cap on exposure?
Insurance can be complex.
Most people don’t spend several thousand hours a year thinking about insurance markets. Some people do. Use those people.
Medicare has decision support tools, navigators and agents. Agents are obligated to give you reasonable advice. The advice does not have to be optimal, but it has to be solid. Use trusted sources to reduce the decision complexity from hundreds of plans to maybe two or three reasonably decent choices given the criteria that you value.
Right now at the start of the open enrollment period, you have time. Medicare beneficiaries will have about seven weeks. ACA individual market enrollees will have a little more than six weeks. Use the early part of the window to quickly discard really bad options and then use the rest of the time to find good advice and expertise to make a not bad choice. Accept that it is unlikely that retrospectively that you will make an optimal choice but be confident that prospectively, you can make a reasonable choice.
Good luck and ask away in comments as weird things come up during open enrollment.
Thanks, David. Your summary of the difficulty in the decision-making process is valuable. Several years ago, Ellen Peters and colleagues published a paper on the “Less is More” effect in health-care decision-making (“Less Is More in Presenting Quality Information to Consumers”), which goes into more detail. You (and your readers) can find an open-access copy of the paper here: https://pdfs.semanticscholar.org/e9a3/7e772c1743933fce8025ddca3ea2854fccf5.pdf
It’s near open enrollment time for the feds as well. I get the distinct pleasure of getting new eye insurance as virtually no one in my area takes what I have anymore. Including the eye doctor I just acquired who dropped it not six months after going to her. Tots & Pears appreciated.
My brothers and sister are helping our mother select plans. I am totally stumped by what i am reading about Part D and Medi-gap plans.
True! Where the hell do I find them?
Or more accurately, where would my wife find them? She turned 65 back in July and is just now going through the initial enrollment process, at the end of her 7 month window. Doubly confusing since neither of us realized that would overlay the annual enrollment period, but here we are.
That’s where my wife is at this point, having done her A/B, and did D about an hour ago. It’s state-dependent, of course, so I can’t help you much. I leaned heavily on AARP when I enrolled, and found their Part D and supplemental to be pretty attractive in my case. Not all enrollees will have the same needs, unfortunately.
I haven’t had enough coffee yet to read this right now but will print it out—I am turning the Magic 65 next spring and I need to know all this. Many thanks!
hedgehog the occasional commenter
Thanks for this–like Ohio Mom I’m going to print it out. I don’t turn 65 for three more years, but mr. h turns 65 in January and seems to think Medicare will just automatically happen without him having to do anything. Grr.
@Ohio Mom: me too! AARP has been very helpful, even though one of their main purposes seems to be selling multiple insurance products to seniors. Since I already get SS retirement benefits, I will be automatically enrolled by SS into Medicare part A, so it seems I just have to figure out the rest. I plan on traveling, so I am going with the government plan since it’s not tied to a geographic network.
@marklar: I’m reading through McWiliams et al (2011) on too much choice in Medicare Advantage
It is the 55 types of jelly on the shelf problem
@Spanky: Easiest space to find them is to call AARP or the Area Agency on Aging.
2nd best choice is to call an independent broker who is willing to work on an hourly fee basis for you.
It is difficult. The AARP Medigap ads really bother me because Medigap plans are standardized, and all work the same way. The only thing you really have to fear is bankruptcy, and not even that, not much anyway. Otherwise, choose based on price and benefit structure that seems to best suit your likely needs. I would suggest looking at the lettered plan options and tentatively making a choice, and then get prices on who offers those in your area. A broker is probably best for this exercise.
For standalone Part D, if you are taking prescription medications, then use the plan finder to figure out which plan is most likely to give you coverage in preferred tiers for those drugs.
For Medicare Advantage, most seniors start with plans that include their PCP or another doctor that they see frequently, e.g., if you have a heart condition, maybe that is a cardiologist, and evaluate the remaining choices along other lines. Medicare tells you to look at the average total costs under a given plan, but most seniors heavily weight monthly premiums as a basis for choosing. Just understand two things: First, you are likely to underestimate your medical expenses year over year, but, on the happy side, you can totally choose a new MA plan next year if you were unduly optimistic this year.
I would suggest that you look at every medical related expenditure you had the year before and assume that it will only go up from there.
I’m at the point where I’m trying to figure out if there’s any reason I would benefit from getting a medicare advantage plan. I am starting Medicare A and B on Nov. 1, with CHAMPVA as my secondary payer and prescription med coverage. So right there I have fairly decent coverage with an annual catastrophic cap of $3000. A low cost medicare advantage plan would limit my potential network for providers, but maybe there are benefits in coverage that would be worth that trade-off. It makes my head hurt reading over all the plan descriptions.
We switched to Kaiser a couple years ago, so new docs . They are significantly cheaper than our other options. It hasn’t mattered to me, I rarely need a doctor. My wife has a few ongoing conditions and is now of the opinion that “fresh eyes” is a good thing. The new doc’s were agreeable to changes her old docs didn’t agree with.
I’ll be moving to Medicare in a couple years which will be several years before my wife. We’re going to put her name as the primary on our Obamacare plan starting this year. I read changing the primary Obamacare recipient midyear can be glitchy.
@JeanneT: If you already have secondary coverage and an annual catastrophic cap, you almost certainly don’t “need” MA. Your secondary payer would be available to pick up MA cost sharing as well, but it might be more complicated to deal with, for a variety of reasons. Some MA plans offer “supplemental benefits” that people value, such as hearing or dental coverage.
@David Anderson: Yes, our Athens Council on Aging is a great resource here.
I have begun to price plans as my partner and I both turn 65 in January. There is a lot of confusing and contradictory guidance out there. We plan to go true Medicare with gap and Part D. Our issue is neither of us currently take any prescription drugs, so it’s hard to pick a drug plan. As I understand it the gap plans are standardized so once you choose a letter, it’s basically shopping for credit quality and premium.
@Sure Lurkalot: If you don’t currently take any drugs, then I would focus on premium for now. If the situation changes, you can change plans during the next open enrollment. In addition, when you do see a doctor, take along a pocket reference guide for your Part D plan formulary, so that if for some reason your doctor decides to prescribe a medication, you will at least be able to figure out which of the most common types of drugs are in the cheapest tier.
@Spanky: Does your County have a Council on Aging or similar organization? If so, they can be a wealth of good information at no or low cost including plan selection.
Several months ago our 20-something daughter decided to step back from the insanely punishing world of case management (she’d spent years working with domestic violence survivors & homeless folk). She looked around the small town she was in and started randomly applying for jobs that seemed stable and worth doing.
She works for an insurance company now — a good, solid place owned and run by women. She describes their process and ethics in ways that feel good to me. Meaning, they’re not trying to gouge the last nickel out of everyone, but see their role as a sort of necessary pill in a fucked-up system.
This means that we now have a family member who is on the ground, so to speak.
She told me the other day that this is “Insurance Season,” and that no one in the company can take vacation during the next 3 months. Who knew? She also describes the very steep learning curve she’s had to climb to become their resident expert in just one aspect of the business, so I appreciate your efforts here to point us juicers toward the necessity of paying attention and making an effort.
The question I really want the answer to is this: what sort of monthly expense can we expect once neither of us are working? I know there are a million variables, and I’m not asking it here … but that seems like what you’d want to know, within some useful range, if you’re trying to make a plan for the good ol’ “fixed income” period.
From what I can tell so far, getting high and low numbers on that range is going to be a major pain in the ass. He just turned 64, so it’s not like we have forever to sort it out. Luckily, hitchhiker daughter #2 is going to be in a position to help.
And for what it’s worth, she says that it’s normal for people like us to show up with questions and be guided to good decisions, often not involving buying something from her agency.
This is where it gets weird for me. I’m 67, currently still using spouse’s insurance. I haven’t had any medical expenditures. I don’t take any medications. I don’t have any indicators for anything coming down the pike. Blood pressure, cholesterol, weight, blood sugar, whatever — I’m still fine.
I know that will change, but I can’t guess how much or in what way.
@hitchhiker: The one cost you will face as your turn 65 is the Part B premium, regardless of whatever other choice you make. It is $135.50 per month for 2019, and goes up with the rate of inflation. Average Part D premium is around $25 per month. Medigap is much harder to price on average because there are different plans and geography matters (more so than with Part D), but if you buy one at 65, plan to spend at least $150 per month.
So that’s just over $300 monthly in premiums, without regard to Part D or other cost sharing.
Thanks for this David. I’m dropping my employer insurance and both of is are going on Medicare this year. I’ve got to navigate that and find something for my <26yo son. I’ll look at your links and the comments. Other than AARP are there any sources of info you recommend?
@hitchhiker: Right. This was my mother’s situation. You can only work with the information you have, and right now, that suggests you can prioritize premiums over other things without being unpleasantly surprised by coverage gaps. The only other thing is to consider whether you would like vision or dental coverage, and figure out which MA plans give you the best benefit for those things.
@hitchhiker: ETA: If you are considering Medigap, the best time to get it is when you first enroll in Medicare, but I don’t know the Medigap rules off the top of my head if you have not obtained Part B coverage because you are covered under the policy of a spouse who is still actively working. I don’t know whether that’s a guaranteed issue/no underwriting situation or not.
@JeanneT: I had a Medicare Advantage plan for the last year and didn’t see any benefit from it. It paid a meaningless share of prescription drug costs and would pay for a flu shot only at a specific pharmacy chain. I called to complain that the nearest store in this chain is more than 60 miles away and was directed to use a different store that is 9 hours away. Other than that it meant a flood of useless paperwork. (I don’t need a letter that tells me how much I spent on my prescription last month. I wrote the damn check.)
As far as the Exchange, I discovered the hard way that a Bronze plan is also worthless; we sent in the premium check every month but discovered that what we got in return didn’t deserve to be called “insurance,” as Blue Cross of Michigan found an excuse to deny even preventive and wellness care, so this year we’re switching to catastrophic coverage to save the money.
Butch, Barbara – thank you for your thoughts. I have been leaning toward just keeping it simple (ha!) w/Medicare plus CHAMPVA; you have reinforced that lean! I’ve already got hearing aids (reasonable cost through Costco, free exams and maintenance) and get my glasses online, so those extra benefits would be only marginally useful.
Butch, sorry to hear your BC Michigan has sucked. My son and DIL have a Blue Cross Bronze and (through pregnancy and post delivery inpatient hospitalization) maxed out their out-of-pocket (paid for from a health savings account?) and have been reasonably happy with the coverage in proportion to the cost. They’re double-checking other Bronze offerings this round, just to keep Blue Cross as honest as possible.
I hate United Health Care and all it stands for. The CEO’s salary is obscene. That being said, I will once again enroll in the AARP Medigap plan. Or rather, I will not change my provider. I chose AARP originally because I was living in two states and had doctors in both. The easy portability of AARP seemed the best choice. That was almost 12 years ago.
I have had both minor and major health issues since enrolling. I have never paid a penny in copays and have never had a single medical cost challenged. I’ve never had a single doctor or hospital refuse the insurance and there have been no hidden fees. The monthly premiums are high but friends who are on Advantage plans for less money seem to be shelling out copays on a regular basis. The convenience and peace of mind are worth the higher costs to me and I’m lucky to be able to afford them. I’m less enamored of their Part D coverage and will take a look at options.
There are no easy choices with medical coverage and it’s not cheap. But there are issues beyond the monthly premiums that everybody should consider.
@hitchhiker: Would you be so kind as to share the name of the women-led insurance company? Always on the lookout for good companies, and if they don’t sell policies in my state, maybe they can recommend a company or two that does.
@JeanneT: BCBS of Michigan sets an out-of-pocket limit that’s within ACA standards but then imposes an entirely different deductible of $13,500 for anything BCBS decides is either out of network or “unusual,” and according to BCBS just about every treatment you’d ever receive is “unusual.” I want to see BCBS burned to the ground.
Currently reading Medicare & You. I am now even more against Medicare For All. What a confusing mess of choices!!!!