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Choosing a Medicare Advantage plan for 2016

If you have a Medicare Advantage plan, you should be receiving your annual notice of change from your plan. Medicare Advantage plans are required to tell you of any changes for the upcoming year before the fall open enrollment period, which begins Oct. 15 and ends Dec. 7.

Don't ignore it, advises Pamala McIntire, a benefits consultant for Reames Employee Benefits Solutions in Daytona Beach, Fla. The notice will tell you of any changes in the plan's costs, benefits and rules for the upcoming year.

Medicare Advantage 2015If you are OK with the changes, you don't have to do anything. But if you're dissatisfied or want to change to a different Medicare Advantage plan, open enrollment is the time. It's also time for people with Original Medicare to change to a Medicare Advantage plan.

With original Medicare, the government pays your health care providers for your Part A and/or Part B benefits.

Medicare Advantage plans are a type of Medicare offered by private companies. The companies contract with Medicare to provide you with your Part A (hospital) and Part B (medical) insurance. Most Medicare Advantage plans are health maintenance organizations or preferred provider organizations. However, some Medicare Advantage plans are private fee-for-service plans.

Medicare Advantage plans have lower premiums

The advantage to buying a Medicare Advantage plan is that you likely pay less in monthly premiums than you would for supplemental plans (called Medigap) and traditional or Original Medicare, says Tracey Fults of the Williams-Manny Insurance Group in Rockford, Ill.

Medicare Advantage premiums have fallen by six percent since 2010, when the Affordable Care Act became law, according to the Centers for Medicare & Medicaid Services.

Some Medicare Advantage plans have zero monthly premiums. Some have premiums as low as $25 or $30 a month. The cost of the plans can vary depending on where you live. Yet "in some areas, the cost of a Medicare Advantage premium can be fairly high," notes Frederic Riccardi, director of client services for the Medicare Rights Center in New York.

Costs for 2016 Medicare Advantage plans

The Centers for Medicare & Medicaid Services (CMS) says that average premiums for 2016 Medicare Advantage plans will increase by 1.25%.

The trade-off to a low premium is that you might have higher deductibles and co-insurance when you need health care. Also, you will pay more or may not have any coverage if you use doctors and hospitals that aren't part of your Advantage plan's network.

Drug coverage likely included in a Medicare Advantage plan

Most, but not all, Medicare Advantage plans provide prescription drug coverage. If you have Original Medicare, you must buy your drug coverage (Part D) separately.

Here's what you need to do when choosing a Medicare Advantage plan:

Look at what doctors and hospitals are in the plan's network. Provider networks can change from year to year and even mid-year, McIntire warns. If you are set on using particular doctors or hospitals, make sure they're part of the plan you choose.

"You do have to stay within the network for the most part," McIntire says. "However, most Medicare Advantage plans are very good about getting you where you need to go. If they don't have the specialist you need in their network, they will get you someone."

Riccardi warns that not all providers accept all Medicare Advantage plans. "Some don't accept any, so it's really important to check," he says.

Look at drugs and your usage when selecting plan. If you're taking prescription drugs, examine the plan's list of covered medications very carefully.

"The costs of different medications can vary greatly with each plan," Fults says. It may be worth your time to set up a spreadsheet with the medications you take and the costs under your different Medicare Advantage and Original Medicare options.

If you take a number of prescriptions, you may reach a coverage gap known as the "donut hole." This is an annual limit on what the Advantage or drug plan will cover for drugs. The Affordable Care Act set a schedule to close the donut hole by the year 2020, so next year's hole will be smaller than this year's gap.

In 2016, you fall into the coverage gap once you've spent $3,310 on covered medications. After that, you will pay out of pocket for drugs until the end of the year, but you won't have to pay full price. Under the Affordable Care Act in 2016, you'll get a 55 percent discount for brand-name prescription drugs covered by your plan. Some Advantage plans offer coverage through the donut hole for generic prescriptions, McIntire says. If that's important to you, look for one that does.

Consider the plan's maximum out-of-pocket costs. You may want a plan that has a low out-of-pocket maximum "so you'll be protected should you have something going on with your health," McIntire says. If you're healthy and don't plan to use much health care, you might want to risk a higher out-of-pocket maximum.

Ways to buy a Medicare Advantage plan

Use Medicare's Plan Finder.

Visit the plan's website to see if you can sign up online.

Enroll by filling out paperwork. Contact the plan to get an enrollment form. All Medicare Advantage plans must offer this option.

Call the plan directly: 1-800-MEDICARE (1-800-633-4227).

You can't buy Original Medicare or Medicare Advantage plans on state health insurance exchanges. The exchanges sell only individual and family health insurance.

A good resource for choosing the best Medicare Advantage Plan is the plan finder tool on Medicare.gov. After you determine what Medicare Advantage plans are in your area and appear to meet your needs, go to the plan's website to double check and see that it indeed has what you're looking for, Riccardi advises.

You also can call the plan and talk to a plan representative. If you speak with a representative to confirm that the plan you want covers all your drugs and that the doctors, hospitals and pharmacies you want to use are in its network, take notes. Keep a record of whom you spoke with and what was said, Riccardi says. "This information may help protect you if the representative of the plan gives you misinformation."

The bottom line: Cost in the long run

No one can predict what health care you may need in 2016, but based on your claims this year you can look for the plan that has the best coverage and costs for you.

If you choose a Medicare Advantage plan and find you're unhappy with it, you may have an out. There is an annual disenrollment period from Jan. 1 to Feb. 14. During this time, you can drop your Medicare Advantage plan and go back to Original Medicare. You can't switch Medicare Advantage plans during disenrollment, but you can buy a stand-alone prescription drug plan if you drop your Advantage plan.

If you need help with choosing a Medicare plan, visit medicare.gov, call 1-800-MEDICARE or contact your State Health Insurance Assistance Program (SHIP).

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