Medicare Open Enrollment: What to Look for When Selecting Your 2012 Plan

Seniors have until Dec. 7 to decide which Medicare plan will best suit their needs for next year. There are several things they may want to keep in mind when making their selections.

Those who are eligible may choose to go the route of original Medicare, with Part A (which covers mainly hospital visits), Part B (which covers doctors’ visits and outpatient care), or Part D (prescription drug coverage), or choose Part C, a Medicare Advantage Plan that may or may not include prescription drug coverage.

“If you’ve never been in an Advantage Plan and you’re newly 65, and you’re used to fee for service, you’re essentially going into an HMO or managed-care plan,” says Deborah Freund, president at Claremont Graduate University, health economist and Medicare expert. “The plan selects doctors and hospitals for you. Make sure you look at what the plan requires and ask yourself if you were sick, is that the doctor you’d want to go to? Is that the hospital you’d want to go to? This can help you decide if an Advantage plan is right for you.”

Pricing is also a factor in choosing the right plan. “Medicare Advantage plans allow for a $0 premium or premiums of just over $100,” says Kimberly Reynolds, certified financial planner and senior advisor with the Welch Group in Birmingham. “Healthier individuals would most likely want to choose a zero-premium option.”

Starting in 2012, Advantage plans will no longer charge patients for preventative services that are free to those who use traditional Medicare, such as wellness visits, as long as providers are within the plan’s network.

Also new this year: If you make a selection and you decide you want to change it, you can switch into a five-star Advantage or prescription drug plan. It used to be that you had to wait a whole year for the open enrollment season to make changes, but now you’re allowed a one-time change.

“Keep in mind that choosing the most expensive plan doesn’t mean you’re getting the very best plan for you personally,” says Reynolds. “Say you only have one or two generic prescription drugs. You could easily be overpaying for prescription drug coverage.”

Medicare Monthly Premiums for 2012

“When you go over a certain income limit, you get an additional premium attached,” says Reynolds. “I’ve reminded my clients that this year, you can give your required IRA distribution directly to charity. Right now the law lets you do this until the end of 2013.”

Reynolds says that this is something higher-income couples and individuals may want to do in order to keep their adjusted gross income below the threshold that would require them to pay a higher premium.

Part D Monthly Premium Rates for 2012, Based on Income

Shop around for the best plan for your individual needs with Medicare’s Plan Finder Tool or call a Medicare specialist directly at 1-800-MEDICARE.