Financial Writer and Certified Educator in Personal Finance
Rachel Christian is a writer and researcher for RetireGuide. She covers annuities, Medicare, life insurance and other important retirement topics. Rachel is a member of the Association for Financial Counseling & Planning Education.
Christian, R. (2022, May 31). Few Medicare Users Explore Their Options During Open Enrollment, Experts Say. RetireGuide.com. Retrieved September 30, 2022, from https://www.retireguide.com/news/few-medicare-users-explore-open-enrollment-options/
Christian, Rachel. "Few Medicare Users Explore Their Options During Open Enrollment, Experts Say." RetireGuide.com, 31 May 2022, https://www.retireguide.com/news/few-medicare-users-explore-open-enrollment-options/.
Christian, Rachel. "Few Medicare Users Explore Their Options During Open Enrollment, Experts Say." RetireGuide.com. Last modified May 31, 2022. https://www.retireguide.com/news/few-medicare-users-explore-open-enrollment-options/.
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Medicare open enrollment is an annual opportunity for seniors to compare their current health care coverage and make changes before the new year begins.
Experts consider it an important time because these decisions can help users get better benefits and save money on prescription drugs.
Analysis Finds Few Medicare Beneficiaries Switch Plans During Open Enrollment
A December 2019 analysis found that just 10 percent of Medicare Part D beneficiaries without low-income subsidies voluntarily switched to a different plan during the 2016 annual open enrollment period.
Switch rates were even lower for Medicare Advantage users, at 8 percent.
The analysis was conducted by the Kaiser Family Foundation — a leading nonprofit focused on national health policy issues. The KFF study examined data from 2007 to 2016, the most recent years available for analysis.
Both Medicare Part D and Medicare Advantage plans are administered by private insurance companies that contract with the Centers for Medicare & Medicaid Services, or CMS. These private plans vary significantly from each other and can undergo major changes from one year to the next.
Researchers note that in 2017, more than a third — or 35 percent — of Medicare users found it very or somewhat difficult to compare plan options.
That figure jumped to 44 percent among users in fair or poor health.
“Getting beneficiaries to compare available coverage options each year is a tough nut to crack,” Tricia Neuman, vice president of the Kaiser Family Foundation and a co-author of the study, told RetireGuide. “And (it’s) probably the toughest for seniors who really need the best coverage because they have serious medical conditions or take many drugs.”
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Numerous Plan Options Can Make Open Enrollment Intimidating, Despite Potential Savings
Switching Medicare plans can equal real savings for seniors.
One estimate from a private health firm in 2020 found that customers who compare Medicare Advantage prescription drug plans could save an average of $982 a year.
Comparing plans isn’t necessarily fun, Neuman acknowledged, but it’s often worth it.
“I saved my mom thousands of dollars one year by switching her to another drug plan,” Neuman said. “For people who are watching their budget, it could be a meaningful savings.”
But if Medicare users can save so much money, why don’t more people switch during open enrollment?
Simply put, the number of options is often intimidating.
According to CMS, there are more than 4,800 Medicare Advantage plans available during 2021 open enrollment, an average of 47 plans per county.
That’s an increase of 78.5 percent since 2017.
Likewise, there are nearly 1,000 Part D plans offered nationwide in 2021, or an average of 30 plans per state.
“With so many plans offered, the plethora of choices can be overwhelming,” Neuman said.
That may be one reason why 45 percent of people on Medicare said they rarely or never review their options, according to the KFF analysis.
“This is not surprising given the sheer number of Medicare private plans now available and the many ways in which they differ,” study researchers concluded.
Solutions to Help Seniors Navigate Open Enrollment
Medicare experts and advocates agree: Consumers want neutral information to help them sort through their options and pick the best coverage.
Beneficiaries can use the online Medicare Plan Finder to explore choices in their area — but the process can be cumbersome and time consuming.
One way to get help is by contacting your local State Health Insurance Assistance Program, or SHIP.
These federally funded programs offer free advising from trained counselors who can educate Medicare beneficiaries, their families and caregivers on different health care options and help them make informed decisions.
3 Tips for Picking Better Coverage During Medicare Open Enrollment
Anne Chansler is the director of Elder Protections at the Florida Department of Elder Affairs. She helps to oversee the SHIP program, which goes by the name Serving Health Insurance Needs of Elders — or SHINE — in Florida.
She sat down with RetireGuide to offer three important tips for navigating the open enrollment process this year.
3 Tips for Open Enrollment
Review Your Annual Notice of Change Document”SHINE strongly encourages beneficiaries to be on the lookout for their Annual Notice of Change, which they should receive from their plan no later than Sept. 30. Reviewing their benefits and evaluating their health care options each year is vitally important for beneficiaries. Acting quickly can assure a smooth transition into the 2021 benefit year.”
Don’t Base Your Medicare Changes on What Your Friends or Neighbors Do”It is extremely rare that a beneficiary is on the same medications, seeing the same doctor or has the exact same needs as those around them. Taking into consideration the experience others may have with a company — either good or bad — can be a factor, but it should not determine the beneficiary’s choice in a Medicare plan entirely. That’s where SHINE comes in: To help navigate each beneficiary’s independent needs and provide specific company information based on the beneficiary’s perception of customer service or network availability as advised by a friend, neighbor or spouse.”
Consider Any Health Changes Over the Last Year“Individuals often experience subtle changes in their health over the course of the year, and these changes may alter the kind of care they need. This could directly affect their need for more or less health insurance, the types of prescription drugs they require, or their access to particular doctors or pharmacies. Health changes may also affect costs, and understanding those changes ahead of time helps with budget planning.”
For more information about State Health Insurance Assistance Programs, check out our Oct. 16 news story.
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