Medicare 2021 open enrollment begins Oct. 15

Medicare open enrollment for health care and drug coverage for 2021 begins Oct. 15, but beneficiaries can get a sneak peak at plan changes for the coming year starting Oct. 1.

During the annual open enrollment season, which runs through Dec. 7, Medicare beneficiaries can switch health and drug plans for 2021, with the new coverage beginning on Jan. 1. If they do nothing, they will remain in their current plans.

Advisers should urge their clients to check their mail for notices from providers of their current Medigap and prescription drug plans, or all-inclusive Medicare Advantage plans, regarding any changes to their coverage for next year.

While most Medicare beneficiaries enrolled in the nation’s primary health insurance program for retirees and people with disabilities usually ignore the annual opportunity to reassess their coverage, many can save money if they take the time to review their options. Clients should focus on what matters to them, whether that's access to their preferred doctors, lower monthly premiums or the best plan to cover their specific drug needs.

That is especially true for people with diabetes, who account for about one-third of Medicare beneficiaries. For the first time, many participating drug plans will offer a 30-day supply of insulin for a co-pay of $35 or less per month starting next year, allowing beneficiaries to save an average of $446 per year on out-of-pocket costs for insulin in 2021, according to the Centers for Medicare and Medicaid Services.

The migration of new and existing Medicare beneficiaries from original Medicare to private Medicare Advantage plans is expected to continue next year as many of these all-inclusive plans add extra benefits and reduce premiums.

“Medicare is changing a lot,” Seema Verma, administrator of CMS, said in an interview. “More services are available in Medicare Advantage plans and we have developed a new tool to allow people to shop around between traditional Medicare and Medicare Advantage plans and make the decision that is right for them.”

Starting on Oct. 1, Medicare beneficiaries can take an early look at Medicare health plans and drug plans by using the Medicare Plan Finder. If you have a Medicare number, you can log in or create an account to put together or access a list of your drugs, compare your current Medicare plan to others, and see prices.

There are two main ways to get Medicare coverage — original Medicare and Medicare Advantage.

Original Medicare includes Part A hospital coverage, which is premium-free for most people, and Part B, which covers doctors' visits and other outpatient expenses and carries a basic monthly premium of $144.60 in 2020, although some higher-income people pay more. CMS has not yet announced premiums and surcharges for 2021.

If you want drug coverage, you can add a separate Part D prescription drug plan. You can also add a Medicare supplemental insurance policy, commonly known as Medigap, to help pay your out-of-pocket costs. Some people who have retiree health benefits through a former employer may not need to buy a Medigap policy or Part D plan, but they still need to enroll in Medicare Parts A and B.

Alternatively, beneficiaries can enroll in an all-inclusive Medicare Advantage Plan. By 2021, 42% of beneficiaries are expected to choose bundled plans that include Part A, Part B and usually Part D. Most Advantage plans also offer extra benefits — like vision, hearing and dental coverage and complimentary gym memberships — that original Medicare does not cover.

In response to the COVID-19 pandemic, some Medicare Advantage plans added transportation benefits and meal delivery services to promote social distancing and expanded telehealth services, while reducing or waiving costs for telehealth. For 2021, 94% of all Medicare Advantage plans are expected to offer telehealth services, up from 57% this year.

In exchange for typically lower costs and expanded benefits, most Medicare Advantage plans require members to use their in-network health care providers and often require prior approval to see specialists. Medicare Advantage members pay the Part B premium and, in some cases, an additional monthly plan premium. But Advantage members do not need to buy a Medigap policy (in fact, it’s illegal) and usually do not need to buy a Part D prescription drug plan, so monthly premium costs may be lower (though out-of-pocket costs can be higher).

Premiums for Medicare Advantage Plans are dropping to historic lows for 2021. The average monthly premium is expected to decrease 11% to $21, down from $23.63 this year. Since 2017, the average monthly Medicare Advantage premium has decreased by 34%, CMS reported.

Meanwhile, premiums for stand-alone Part D prescription drug plans are expected to increase slightly next year, to $30.50 per month.