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Time for a Medicare switcheroo?

By Jennie L. Phipps · Bankrate.com
Sunday, October 14, 2012
Posted: 6 am ET

Retirement planning alert: Medicare open enrollment starts Oct. 15 and runs through Dec. 7. During this period, all Medicare beneficiaries are able to change their Medicare coverage for the coming year.

Even if you're happy with what you have now, take a second look. Retirement is expensive and the time you dedicate to this kind of research can really pay off.

Mary Dale Walters, senior vice president of Allsup Medicare Advisor, a service that helps people choose the best Medicare plan, advises looking hard at these aspects of your plan while you have the opportunity to make a change.

This is your budget on drugs. The average Part D prescription drug premium is expected to rise to $30, only a few cents higher than it was in 2012. But that's the average. Prices charged by individual providers vary widely. It's a useful exercise to list the drugs you take on the Medicare.gov website and see if another provider offers a less costly plan for the drugs you are taking now.

Consider the doughnut hole. While only about 3 million out of 50 million Medicare enrollees encounter the much-vaunted doughnut hole, if you are one of them it can be expensive. The doughnut hole is the gap in Part D coverage when all costs are paid by enrollees out of their own pockets. As a result of the Affordable Care Act, in 2013, the government is fiddling with the doughnut hole to lessen its impact. Recipients enter the doughnut hole at $2,970 -- $40 later than in 2012 -- and catastrophic coverage kicks in $50 later at $4,750. As they traverse the doughnut hole, next year recipients will pay 47 percent of premium drug costs, down from 50 percent this year, and 79 percent of generic drug costs, down from 86 percent this year. If you are likely to fall into the hole, it is especially important to make sure you're signed up for the most economical plan for you. As you can see -- even with the reductions -- these are whopping costs.

Medicare Advantage in constant flux. If you are enrolled in a Medicare Advantage plan, review the information your plan providers should have sent you in September. This mailing will tell you about changes in services, premiums, deductibles and co-pays. The mailing also must show you the plan's quality rating -- a one-to-five-star system that ranks plans on 50 customer service and coverage measures. Health and Human Services announced Friday that in 2013, recipients will have access to 127 four- or five-star Medicare Advantage plans. If you have a plan that gets fewer stars, take a hard look at the other alternatives.

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