If you are over the age of 65, the time of year to review your Medicare plans has moved up this year. For 2011, the starting date for the Open Enrollment Period has moved up a month to October 15, 2011 and the ending date has moved up 3½ weeks to December 7, 2011. During this 7½ week period, if you are eligible for Medicare, you have the option to change existing Medicare Part D prescription drug plans and Medicare Part C Advantage plans. While you can make the changes this year, 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. Parts A and B are often called “Original” or “Traditional” Medicare. In addition, you may have an employer-sponsored or private pay Medicare supplement policy to go along with Parts A and 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 period called the Medicare Advantage Disenrollment Period from January 1, 2012 through February 14, 2012. During this period, if you are in a Medicare Part C Advantage plan, you can leave your plan and switch to Original Medicare Parts A and B. If your Medicare Part C Advantage plan included prescription drug coverage, you will have until February 14, 2012 to also join a Part D Medicare prescription drug plan to add drug coverage.
If you have just a Part D drug plan, a change or cancellation to the drug plan cannot occur at this time. During this period, you also cannot switch Medicare Part C Advantage plans nor switch from Original Medicare Parts A and B to a Medicare Part C Advantage plan.
On February 15 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 when certain events happen in your life, such as if you move, lose other insurance coverage, are on Medicaid or live in an institution. These chances to make changes are called Special Enrollment Periods. Rules about when you can make changes and the type of changes you can make are different for each Special Enrollment Period.
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.
You should receive an Annual Notice of Change for any pending changes by September 30, 2011. 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.
On October 1, 2011, the plans start marketing for 2012. You will see lots of information on TV and in your mailbox from various plans. 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 or 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. In prior years, the Council on Aging assisted seniors in evaluating and choosing Medicare plans. If they cannot assist you this year, they should be able to tell you who can.
With the 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 September 25, 2011 in The Times Herald newspaper, Port Huron, Michigan as: New deadline looms for Medicare choices