Open enrollment for Medicare begins on Thursday and runs through Dec. 7.
More than 70 million Americans are in the program, which provides subsidized health care to people age 65 and older, and those who qualify for disability insurance.
For those navigating what can be a complicated enrollment process for the first time, “Here & Now‘s” Indira Lakshmanan speaks with Jill Schlesinger, a CBS News business analyst and host of the podcast “Money Moves.”
This article was originally posted on WBUR.org.
So, Jill, many people may not realize that Medicare is not a single healthcare plan. How many options are there?
It sounds like a billion, actually. And if you look at all the TV commercials and radio commercials and everything that's out there, you're going to be bombarded. One Medicare expert actually said it's like a shock to the system. There are a number of parts that people refer to. So there's Part A, which covers hospital stays and skilled nursing. Part B, which covers doctors' visits and outpatient care, and then there's Part D, which is prescription drugs. So when people say original Medicare, they usually mean Parts A and B, plus D is the prescription drug. But yes, there is something called C, which really should not be called C. It’s called Medicare Advantage. It's really not Medicare. It's an alternative to that combination of A, B and D offered by private insurers.
Yeah, I know it's like alphabet soup.
Just think like A, B, D. Perfect. C is like, “Oh, I don't want A, B and D. I'm going to get C. I'm going to get one plan that basically takes care of all three.” And essentially, just so you know, is that it's usually a lower monthly cost but has a lot of limitations to it. These are really important.
Let's talk about Medicare Advantage. Many people will be familiar with that. That's the version covered by private insurers. But this year, some major insurers, including United Healthcare and some statewide Blue Cross plans, are no longer going to offer Medicare Advantage, which means some 5 million Americans will have to switch plans this year, according to an estimate by the health technology firm Duos. So, what is the impact of this going to be?
I think that for many people, what they might find is going to the original Medicare A, B and then D, it actually may not be as expensive as they fear because the thing is the advantage part of Medicare Advantage is that it's a lower monthly cost. But to be clear, there are really specific issues around the doctors in the network and approval for certain drugs or services, and for a lot of folks, this out-of-pocket cost is rising. So, what's it going to mean? It's going to mean more cost. I think that's the real misconception with this entire program. A lot of people work their whole lives, and they're like, "Oh, I can't wait to get on Medicare because it'll be so much cheaper.” Guess what? It's expensive, and it's very expensive no matter what route you choose. I have to be clear that whether it's $200, $300, $400, $500, there are a lot of people paying $600, $700 a month per person to get healthcare coverage from age 65 on. I think that's something that people have to bear in mind as you're saving up for your retirement. A lot of people think, “Ah, my all my spending is going to go down when I turn 65.” It may not.
I want to say healthcare costs are going up across the board. Part D, which you mentioned, the Medicare drug plan, is expected to increase 6%. Employers are expected to see increases of about 8%, and people on the Affordable Care Act are expected to see at least a 15% increase this year. With all these rising costs, how can we best prepare ourselves for unexpected healthcare costs?
You know, the best bet is that you really do have to spend some time with all these plans. Whether it's Medicare or you're still working and you're about to get into benefits season yourself, it's not just the premium payment. There are these deductibles that you have to add in. There are co-payments or co-insurance amounts. So, spending like an hour, just an hour, for something that's thousands of dollars a year will really help you make your better decision. These are big dollars. Spend some time, focus on these choices. Do your research.
Click here for the Medicare.gov page on open enrollment for information on changing plans, enrolling and more.
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