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 Parts A and B. Part A includes hospitalization and rehabilitative care after hospitalization. Part B includes doctors visits, durable medical equipment and certain home healthcare services. In addition, you may have an employer-sponsored or private pay Medicare supplement 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 Parts A and B. If you have signed up for a Medicare Part C Advantage plan, you are no longer covered by Medicare Parts A and B even if you have your red, white and blue Medicare card. Your Medicare coverage is now governed by the private health insurance contract you entered into with the insurance company.
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. If you have just a Part D drug plan, a change or cancellation to the drug plan cannot occur at this time. If you have a Part C Medicare Advantage plan with Prescription Drug coverage (MAPD), a change can be made by purchasing another MAPD. Or, if you have 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, 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. Finally, if you are eligible for or are on Medicaid, you can usually change Medicare coverages whenever you choose.
So what’s the big deal? Why do you need to review your Medicare plan(s)? The reason is the insurance companies that sponsor the Medicare Parts C and D plans have the option to change what they offer each year and many of them do. Changes may come as a result of directives from Medicare, from previous years’ claims experience or from a multitude of other issues.
For example, the government subsidies paid to insurance companies who sponsor Medicare Part C Advantage plans were cut with the Obamacare healthcare legislation. As a result, it is reported that many insurance companies are increasing co-pays and/or premiums and/or limiting coverages. Some insurance companies are even getting out of the Part C Advantage plan business altogether.
You should receive an Annual Notice of Change for any pending changes, usually in late October or early November. You need to take the time to review the changes to be aware of the plans you are in and the benefits they provide when you might need to use the coverage.
If you are Medicare eligible, you may want to consider enrolling in a Part D drug plan even if you do not currently take any prescriptions or ever had a drug plan before. If you do not sign up when you are first eligible and do not have other creditable drug coverage, you are subject to a monthly late enrollment penalty when you do sign up.
This monthly penalty is equal to 1% of a national base premium for each month you did not enroll, but could have. This monthly penalty continues so long as you have Part D drug coverage, even for the rest of your life.
So how do you wade through all this data? Well the first thing you need to do is make a list. The list should include all your current prescriptions, the names of your Medicare Parts C and D plans, the name of your Medicare Supplement policy and the name and address of your pharmacy. Armed with the list, you then go online to the government website, www.medicare.gov.
Once you get to the website, you will see a tab on the left side that says “Health and Drug Plans.” Just click on it and follow the directions. You will be guided through a number of questions which you will answer. When you are done with all the questions, it will list and compare Medicare Part C Advantage plans, Medicare Part D prescription plans and Medicare Supplement policies for you.
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. Many seniors have inadvertently signed up for a Medicare Part C Advantage plan when they thought they were only signing up for a Part D drug plan.
You may not have a computer, the website may be overwhelming to you or you may not have someone who can assist you. There is help. The Council on Aging assists seniors in evaluating and choosing Medicare plans. All you need to do is call the Council on Aging at 810-984-5061 and make an appointment at one of the four Council on Aging centers. If you are homebound or unable to get out, there are a limited number of home appointments available for which the Council on Aging representative will come to you with an internet-equipped laptop through which they can assist you in choosing your Medicare plans.
With the assistance and tools that are available to you, you should be able to find the most appropriate coverages at the most economical prices to meet your health care needs.
By: Matthew M. Wallace, CPA, JD
Published edited November 7, 2010 in The Times Herald newspaper, Port Huron, Michigan as: Rite of autumn: Time to review Medicare plans