One of the greatest gifts in life is good health. Bad health or lack of access to good and affordable health care is always one of the biggest burdens anyone can have especially if one is not working.
Medicare Health Insurance Program
Luckily, the Federal government has some programs dedicated to ensuring affordable health care for citizens of the United States. One of these programs is the Medicare health insurance program.
This health insurance program seeks to subsidize the cost, of receiving health care through paying certain health care expenses. The Centers for Medicare & Medicaid Services (CMS) which is a part of the United States Department of Health and Human Services (HHS) is responsible for administering Medicare.
It is important to keep in mind that Medicare is an entitlement program just like Social Security. This means that most people who earn the right to enroll in the insurance program work and pay their taxes in the United States for a specified period. However, even those individuals who have not had the opportunity of working long enough to qualify for Medicare benefits may still enroll into the program. The only downside is that they may have to pay more for the insurance.
Enrolling in Medicare
For some people, enrollment in Medicare is an automatic process. Situations in which automatic enrollment applies include;
. When an individual is already receiving retirement benefits upon turning 65: This leads to automatic enrollment into Medicare Part A also known as hospital insurance. Additionally, it is automatic whose who sign up for Medicare Part B (medical insurance) when signing up for retirement benefits.
. When an individual is under 65 but is receiving disability benefits from Social Security or the Railroad Retirement Board: Such individuals get automatically enrolled in Original Medicare, Part A, and Part B after at least two years of receiving the benefits.
There is an exception to this particularly in regards to individuals who get diagnosed with End-Stage Renal Disease (ESRD). However, individuals with ESRD who have also received kidney transplants or need regular kidney dialysis may apply for Medicare.
Individuals under the age of 65 may also receive automatic enrollment into Original Medicare if they get diagnosed with Lou Gehrig’s disease which is also known as amyotrophic lateral sclerosis (ALS).
. People can also enroll into Medicare during the Initial Enrollment Period (IEP) which is a seven month period starting from 3 months before an individual turns 65 and stretching three months after the individual turns 65. It also includes the birthday month. People who are not currently receiving retirement benefits or do not qualify to receive retirement benefits may apply during this period.
. Fourthly, those who do not enroll in Medicare during the Initial Enrollment Period may enroll during the General Enrollment Period. For Original Medicare, this period runs from the first day of January to March 31 of every year.
. There are also those individuals who may not enroll in Medicare when they are first eligible because they are already covered by group medical insurance, e.g., through a union or an employer. Such individuals may sign up during the Special Enrollment Period which normally begins in the first month that an individual’s employment ends or when group coverage ends depending on which occurs before the other. However, it is critical to keep in mind that COBRA insurance programs and retiree health coverage are normally not considered current employer coverage and therefore do not qualify one for the Special Enrollment Period.
Medicare Open Enrollment Period
It is also known as the Medicare Advantage plan annual election period, and it runs from October 15th to December 7th every year. This period allows Medicare beneficiaries to review their coverage and make any necessary changes before the beginning of the next year, in this case, before 2018.
Individuals may also sign up for additional drug or medical coverage for the first time during the annual election period. Subsequently, these changes come into effect starting January 1st of the New Year (2018).
Seniors ought to note that the Medicare open enrollment period is different from the open enrollment period of state and federally run Health Insurance Marketplaces for individual health insurance plans. These market places often begin open enrollment two weeks after the start of the Medicare open enrollment period and end on December 15th, a week after the Medicare open enrollment period ends. This often leads to confusion among people with many thinking that the two open enrollment periods are related. However, it is important to note that these two open enrollment periods are distinct from each other. ACA health insurance marketplaces do not sell Medicare plans.
Why Is Medicare Open Enrollment Period Important?
One of the biggest reasons why the Medicare annual election period is important is because Medicare advantage plans or drug plans tend to change their formularies. Additionally, the health care needs of an individual may change hence requiring a subsequent change in coverage plans. For example, a plan may stop covering a certain drug or in some cases, cover the drug at a different price.
Luckily, when plans change, subscribers of the plan ought to receive some form of notification. For Original Medicare, information on any changes is normally found in the next year’s Medicare & You handbook (in this case the 2018 handbook). This handbook includes information on Medicare costs and benefits for the next year.
Those with Medicare advantage plans or stand-alone Part D plans should receive an Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) from their plans. Reviewing these notices for changes in costs, benefits and rules for the upcoming year are of absolute importance.
People Who Stand to Benefit from the Open Enrollment Period
- Individuals who wish to ensure that they are on the best possible Medicare insurance plans for their health needs and at the best price possible.
- Individuals who have missed deadlines to sign up for Medicare Advantage or Part D coverage
- Individuals who are signing up for additional coverage for the first time.
- Individuals who are looking for larger networks of doctors or facilities.
- Those who are unhappy with their current plans and need to make changes.
According to experts, it is advisable for people to compare and contrast different plans during the open enrollment period. This piece of advice is relevant even for those who feel that they are satisfied with their current Medicare coverage. In fact, research suggests that doing so may help lower the cost of coverage and benefit from better health/drug coverage.
It is also useful to note that during open enrollment, individuals may make as many changes to their coverage as they see necessary. The last change is the one that takes effect on January 1. Nonetheless, fewer changes are recommended to avoid any potential enrollment issues.
Potential Actions to Take During Medicare Open Enrollment Period
During the annual election period for Medicare, individuals may choose to act based on some options.
1. First, individuals who are satisfied with their current health care plans and any changes made in the plans may choose to keep their medical and drug coverage plans unchanged.
2. Secondly, open enrollment also allows individuals who wish to switch from Original Medicare to a Medicare Advantage plan.
3. There is also the option of switching from the Medicare advantage plan and back to Original Medicare.
4. Additionally, individuals may choose to switch between different Medicare Advantage plans.
5. One may choose to switch from Medicare Advantage and get Medigap instead albeit after a health review.
6. The fall open enrollment period also provides an opportunity for those who intend on changing plans to join a Medicare Medical Savings Accounts (MSA).
7. Those with Part D prescription drug plans may choose to switch between plans.
8. Conversely, those who are currently included in a drug plan may choose to drop the coverage during the open enrollment period.
9. There is also the option of signing up for Medicare Advantage, Medigap or drug plans for the first time.
Please note that during the open enrollment period, individuals do not have to fill out a medical questionnaire to get enrolled in Part D or Medicare Advantage plan.
Things One Cannot Do During Open Enrollment
There are a few things that individuals are not allowed to do during open enrollment.
- A person cannot switch Medigap (Supplements) plans without answering certain health questions on the application.
- An individual cannot join Part B unless they have a qualifying event.
- One can also not switch to a Medigap plan from a Medicare Advantage plan without answering some medical questions. However, there are certain exceptions to this rule as well.
Exceptions to the rule:
- Individuals who have had their Medicare advantage plans for less than a year (12 months) are exempted.
- Individuals who have moved out of their Medicare Advantage coverage area are exempted.
- It is also acceptable to switch to a Medigap plan if the individual’s plan is discontinued.
Medicare Advantage Disenrollment Period
There are some situations where one is not satisfied with the Medicare Advantage plan that he or she signed up for during the open enrollment period. In such cases, it is possible for the individual to disenroll from the plan and switch back to original Medicare plans during the Medicare Advantage Disenrollment Period (MADP). This period runs every year from January 1 to February 14. In fact, this is the only other time (other than the annual election period) that individuals can make changes to their Medicare Advantage plans without qualifying for a Special Election Period.
Understanding Different Parts of Medicare
There is often a lot of confusion regarding what Medicare is and more so, what the different parts of Medicare entail. There are four distinct parts of Medicare referred to as Part A, Part B, Part C and Part D. Parts A and B are collectively part of original Medicare.
1. Original Medicare (Part A and B)
Both of these programs are federally run.
Part A is responsible for covering hospital insurance. This includes covering;
- Inpatient hospital care
- Limited time in a skilled nursing care facility
- Limited home health care services
- Hospice care
Most beneficiaries of Part A coverage do not have to pay monthly premiums particularly if they have worked for at least ten years and paid their Medicare taxes while working. Those who do not meet these requirements often have to pay a monthly premium of $413. In addition to that, a deductible of $1,316 is paid for each benefit period.
Part B, on the other hand, covers medical insurance. This includes covering specific non-hospital medical expenses including;
- Visits to doctors’ office
- Diabetic screenings and supplies
- Outpatient hospital care
- Blood tests
Beneficiaries of Part B coverage pay monthly premiums for this program. It is important to note that these monthly premiums are higher for individuals with high incomes. Most people who receive social security benefits pay an average premium of $109 for part B.
2. Part C (Medicare Advantage)
Unlike Part A and B programs which are federally run, private insurance companies that are contracted through CMS are responsible for providing Medicare Part C. This is meant to provide people with an alternative to Original Medicare, and it is therefore optional.
However, to qualify for this type of Medicare plan, one must have Original Medicare, i.e., Part A and B. Medicare Advantage plans are mandated to provide the benefits of Medicare Part A and B except for hospice care. Further, different private health insurers approved to provide Part C may have different additional benefits.
For example, some Medicare Advantage plans may cover health care services such as eye exams, dental care, health care received while on foreign travels and even hearing aids among others. A majority of Medicare Advantage plans also include prescription drug coverage commonly known as Medicare Advantage Prescription Drug Plans.
Ultimately, different insurance providers charge different premiums for their services. The average monthly premium for Part C is $40, but these can go as high as $150 depending for a local Preferred Provider Organization and as low as $0 for those in a Health Maintenance Organization(HMO) plan.
3. Medicare Part D
This is optional prescription drug coverage and is often available as a stand-alone drug plan through the private insurance companies that are CMS approved. Different insurance companies charge different monthly fees, and beneficiaries have to share the cost of prescription drugs based on the specific plan one is enrolled in. Costs often include a deductible, plat copayment amount and coinsurance.
Those planning on making use of the Open Enrollment Period are always advised to seek help especially when they are in doubt. Some avenues to seek help include the “Medicare & You” handbook as well as visiting the Medicare website. Individuals may also call 1-800-MEDICARE to get more information about Medicare plans.