Medicare Open Enrollment – Making Informed Choices
Some MOAA members have been inundated recently with information from insurance companies regarding enrollment in Medicare Supplemental Insurance (Medigap plans) or Medicare Advantage plans. These can be confusing, so let’s review.
Bottom Line Up Front: If you’re happy with your health care situation, you don’t need to do anything. All the marketing materials can go directly to your recycling bin, and your current enrollment will continue into 2012. Don’t throw out your Medicare & You guide however; it contains a lot of information you’ll want to keep on hand throughout the year.
Original Medicare consists of Part A (Hospital Insurance) and Part B (Medical Insurance). Most retirees or their spouses paid Medicare taxes during their working years and don’t have to pay a monthly premium for Part A. Part B does require a monthly premium, which is means tested. To retain eligibility for Tricare beyond age 65, military retirees must be entitled to Part A and enrolled in Part B.
Medicare Supplements or Medigap plans help cover out of pocket expenses of Medicare beneficiaries. Tricare for Life acts as a Medigap plan for military retirees and spouses. You need no other supplements.
Part D is Prescription Drug Coverage. Most military retirees don’t need to join a Medicare Prescription Drug Plan. The drug plans are run by private companies approved by Medicare. Monthly fees vary by plan.
Sidebar: Surviving spouses who may lose their Tricare coverage due to remarriage, and anyone whose limited income qualifies them for Medicaid, should consider Medicare Part D coverage.
Medicare Advantage (MA) Plans, sometimes called “Part C”, combine Parts A and B, and usually Part D. Private insurance companies approved by Medicare offer these plans. The plans are run like a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO), and can have a yearly deductible, co-payments, additional monthly premiums above Part B premiums, and restrictions on referrals to out of plan providers, as well as yearly limits on out-of-pocket expenses. MA plans must include the coverage obtainable from Original Medicare, except hospice care (Original Medicare covers hospice care even if you’re enrolled in a MA plan). MA plans usually offer additional services such as vision, hearing, dental and/or wellness programs to make them more attractive to some retirees. The insurance companies providing these plans are heavily subsidized by the federal government, though those subsidies are being squeezed by tightening budgets and by changes in health care policy expected to go into effect in the next few years.
When a MOAA member contacts me regarding whether or not to enroll in a Medicare Advantage plan, I always ask first if Part D coverage is required to join that plan. If it is, I advise them to look for another plan, or choose Original Medicare. If a Medicare Advantage plan’s network pharmacy is also a Tricare network pharmacy, the plans may coordinate benefits. However, the potential savings or additional services obtainable from a MA plan rarely offset the added premiums required for Part D coverage (average $30/mo in 2011) and the potential hassle of coordinating drug benefits. If a plan does not require Part D enrollment, proceed with caution. Tricare for Life will back up either Original Medicare or a Medicare Advantage plan, but on the whole, MA plans should be considered as standalone plans.
Once the Part D requirement is determined, the member should carefully evaluate and compare the features of the MA plans under consideration. If the plan offers features that you will likely never need or use, or cover in another way, then it isn’t worth paying any additional money to belong to that plan.
Next, if you want to use your own health care providers, determine whether or not your provider is a member of that MA plan. The best way is simply to ask your doctor if he or she participates in any Medicare Advantage plans. Some MA plans require that you get all of your care from providers in their network (emergencies are usually exceptions). Some MA plans require referrals from a primary care doctor. Some plans allow greater choice of providers, but will charge you extra if you get care from someone outside the network.
Finally, Medicare Advantage plans are offered regionally, and can vary widely around the country of even your state. If you live in more than one place in retirement, a MA plan might not be good choice.
With all the different rules from plan to plan, many retirees decide to keep things simple and stay with Original Medicare. That’s not a bad choice. Tricare-eligible retirees can use Original Medicare and Tricare for Life to great advantage.
We’re nearing the end of Medicare’s Open Season, which closes December 7, 2011. Whatever decision you make isn’t permanent; plans have open enrollment periods each year. You may be stuck with your decision for an entire year though, so choose carefully.
For more information, see Medicare’s Plan Finder tool at www.medicare.gov/find-a-plan
Source: Medicare & You, Centers for Medicare and Medicaid Services, 2011
