If you are over the age of 65, it’s that time of year to review your Medicare plans. Once a year from November 15 through December 31, those eligible for Medicare have the option to change existing Medicare Part D prescription plans and Medicare Part C Advantage plans. This period is called the Open Enrollment Period. During the six-week period when changes can be made, you owe it to yourself to evaluate your options.
Medicare consists of four parts — Part A, Part B, Part C and Part D. Most Medicare enrollees have Part A, which includes hospitalization and rehabilitative care after hospitalization and Part B, which includes doctors visits, durable medical equipment and certain home healthcare services. In addition, you may have an employer-sponsored supplement or a private pay Medigap policy to go along with Part A and Part B. The fourth part of Medicare is Part D or prescription drug coverage. You may think that the “D” in Part D is because of the word “drugs.” Actually it’s because there is a Part C.
Part C is the Medicare Advantage program. It was started in 2003 as part of the Medicare Modernization Act, the same Act that created the Medicare Part D prescription drug coverage. The Medicare Advantage program is essentially a repackaging of the Medicare+Choice program which has been around since 1997.
With Medicare Part C Advantage plans, you have the private insurance versions of Medicare Part A and Part B. If you have signed up for a Medicare Part C Advantage plan, you are no longer covered by Medicare Part A and Part B. Your Medicare coverage is now governed by the private health insurance contract you entered into with the insurance company.
Be careful when you sign up for Medicare Part D prescription coverage so you do not unknowingly also sign up for a Medicare Part C Advantage plan. In a continuing legal education panel discussion earlier this year, a number of legal experts who have reviewed numerous Medicare Part C Advantage plans in Michigan found no Medicare Part C Advantage plan that was as comprehensive as the government run Medicare Part A and Part B programs. In addition, if you have Part C, you can not sign up for a Medicare supplement or Medigap coverage.
There is also another Open Enrollment Period from January 1 through March 31. During this period, you can enroll in a Part C Advantage plan but cannot change Part D status, meaning if there is just a Part D, a change or cancellation to the drug plan cannot occur at this time. If there is a Part C Medicare Advantage plan with Prescription Drug coverage (MAPD), a change can be made by purchasing another MAPD. Or, if there is just prescription coverage, an MAPD can be purchased. Going the other direction from an MAPD to prescription coverage only, is not allowed.
On April 1 and thereafter, Medicare institutes a lock-in period. During this time, generally no changes to Part D drug coverage or Part C Advantage plans are allowed. As with most government programs there are a few exceptions to the rule. If you have moved out of the area the plan operates in, or if you become a resident in any long term care facility, or if you involuntarily lose coverage, you can enroll for new coverage under a Special Election Period or SEP. Finally, if you are eligible for or are on Medicaid, you can usually change coverage whenever you choose.
So what’s the big deal? Why do you need to be aware each year of what is going on? The reason is the insurance companies that sponsor the Medicare Part C and Part D plans have the option to change what they offer each year. Changes may come as a result of directives from Medicare, from previous years’ claims experience, or from a multitude of other issues.
Medicare allows the insurance companies to start marketing their plans to the public on October 1 when the companies can release information on intended changes to existing plans. For any pending changes, you should receive an Annual Notice of Change, usually in November. You need to take the time to review changes to be aware of the plan you are in and the benefits it provides when you might need to use the coverage.
Medicare has changed the rules on how companies can induce people to change. In prior years, you could be invited to attend presentations where you received free meals as an inducement to attend. Starting this year, only snacks can be provided. Preliminary indications are that coffee, donuts and fresh fruit are on the menu. Personally, I love fresh fruit and it keeps me regular.
By: Matthew M. Wallace, CPA JD
Published edited November 1, 2009 in The Times Herald, newspaper Port Huron, Michigan as: Review Medicare plans during open enrollment