The Medicare Open Enrollment period, October 15 through December 7, is here again. In most circumstances you are allowed to drop or switch Medicare Plans only during the enrollment period. (The “Medicare & You” handbook on Medicare’s website gives information on exceptions to this.) Unfortunately, many people are overwhelmed by their choices and they do not know where to get unbiased information on their options. Let’s first get a brief overview of Medicare to put the choices you face in an understandable context.
Traditional Medicare Coverage
Traditional Medicare Coverage is comprised of three parts: Hospital Insurance (Part A), Medical Insurance (Part B), and Prescription Insurance (Part D). Part A is provided to people age 65 or older who are eligible for Social Security or Railroad Retirement benefits. Part B has a premium, which is deducted from your Social Security or Railroad Retirement monthly benefit before you receive your check. Part D is purchased through insurance companies; these premiums may be paid directly to the insurance company or deducted from your Social Security or Railroad Retirement benefit. Because there are deductibles and co-pays with traditional Medicare, it is wise to purchase supplemental insurance, known as a Medigap policy. These policies are categorized by capital letters. Medicare requires all companies offering Medigap policies to provide identical coverage for each “letter” category. This enables you to compare prices easily. With a Medigap policy you will have two insurance cards (Medicare and Medigap). It is important to show both cards to medical providers to be sure claims are filed with both insurances. If your Medigap policy does not include prescription coverage, you can also purchase a Part D policy from participating insurance companies; you would use that card for any prescriptions.
Medicare Advantage Programs
In a Medicare Advantage Program (Part C), an insurance company contracted with Medicare combines traditional Medicare coverage with supplemental coverage. It issues a single policy under that insurance company. There are a variety of Medicare Advantage plans such as Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Point of Service Organization (POS), and Private Fee For Service (PFFS). With some Medicare Advantage Programs you may incur a financial penalty if you use an out-of-network provider or fail to obtain precertification or authorization from your primary care physician for certain treatments. Since a Medicare Advantage policy combines traditional Medicare coverage with supplemental coverage, you do not use your Medicare card, but instead use the card issued by the insurance company.
Now that you understand the Medicare basics, you can see that your first choice is to decide if you want a traditional Medicare Plan or a Medicare Advantage Plan. Both of them have pros and cons. Medicare Advantage Plans tend to be less expensive than traditional Medicare combined with a Medigap Policy and a Part D Policy. However, traditional Medicare allows you to choose any Medicare provider, while many Medicare Advantage Policies have financial penalties if you go outside their network of preferred providers. If you have an employer or former employer helping to pay for your medical insurance, you may find it financially unwise to drop what the employer is helping to pay for. (This is the reason most Pennsylvania Commonwealth retirees have a Medicare Advantage Plan.) If you travel or spend much time outside the Central PA area and if you are interested in a Medicare Advantage Plan, it is wise to check with that plan to see how routine medical care is covered outside the Central PA area. While all of the plans will have provisions for emergency care, some plans may treat routine care as “out of network” care.
At this time of year many insurance companies offer free information about Medicare options. By requesting the information you agree to allow their marketing/sales people to contact you about their particular company’s Medicare Plan options. Some companies even offer free lunch or dinner “seminars” on Medicare as part of their marketing strategy. While the information on Medicare may be accurate, the presenters are likely to be biased in favor of the Medigap or Medicare Advantage policies offered by the company which employs them. Fortunately, these “free” offers are not the only sources of accurate information on your options. Medicare has an excellent website, which can help you 1) compare traditional vs. Medicare Advantage coverage 2) know what Medigap, Part D, and Medicare Advantage Policies are offered in the area in which you live and 3) compare the medications you take against the formulary of the Part D policies that are available to you. The term “formulary” refers to the approved list of medications for a particular company. Since some medical conditions have a number of different medications that can be used to treat them, each insurance company develops a list, or formulary, of preferred medications. You probably will incur higher costs when you use a medication that is not in your particular company’s formulary.
www.medicare.gov is Medicare’s website. As you navigate through it, you will be asked for your zip code, which allows Medicare to let you know what plans are available to you. For prescription coverage you also will be asked for a list of your medications, so Medicare can match your medications with the formularies of the available drug plans. If your medications have changed since last year, it is wise to have Medicare compare your current medications with the formularies to be sure you have the best prescription plan for the coming year.
I know some of you are thinking, “I do not have a computer. Isn’t there someone I can talk with about my options?” The answer is, “Yes, there is.” The Cumberland County Aging and Community Services office has a free service called the Apprise Program. They have trained volunteers who not only understand your Medicare options, but can help you understand them as well. Call (717) 240-6110 and ask to speak with an Apprise volunteer. They offer unbiased information to help you get the Medicare coverage that is best for you. The Apprise program is also available through Offices of Aging in other counties. Call 1-800-783-7067 for more information.
John Reese
Elder Care Coordinator