Editor’s Note: Journalist Philip Moeller, who writes widely on health and retirement, is here to provide the Medicare answers you need in “Ask Phil, the Medicare Maven.” Send your questions to Phil.
Medicare’s annual open enrollment period begins on Oct. 15 and runs through Dec. 7. During this period, all Medicare beneficiaries are free to select new plans. For the next few weeks, Ask Phil will focus on open enrollment before turning again to answer your Medicare questions.
The experts who track annual changes in Medicare know that the terms and costs of plans change so much each year that many millions of beneficiaries could save a lot of money in 2016 and improve their health coverage by picking new plans.
They also know that if as many as one in five of you do so, that would be a huge shift in behavior. Medicare is so complicated that most beneficiaries do nothing during open enrollment. But doing nothing is not really doing nothing. It amounts to permitting the automatic renewal of the coverage you already have, even if it is no longer (or never was) your best insurance plan.
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Like Don Quixote tilting at windmills or Charlie Brown hoping that Lucy will not pull away that football he really wants to kick, the Maven badly wants to believe that consumers can make informed Medicare decisions. So here’s another one of my rash promises: If you read this column for the next few weeks, you will become an open enrollment expert.
I have been in touch with all of the big insurance companies that sell Medicare Advantage plans (Part C of Medicare) and Medicare prescription drug plans (Part D). They know how complicated this stuff can be. I will try to guide you to the “right stuff” you need to know.
I’ve also reviewed how Original Medicare works. This includes Part A for hospital insurance and Part B for doctors, outpatient expenses and medical equipment. Any insurer who sells you a Medicare Advantage plan must cover everything in Parts A and B. To find out what this is, download the free annual guide “Medicare & You 2016.” The more I read about Medicare (and I read so much that I am a pariah at social events), the more I appreciate the clear language in this guide. And did I say it was free?
By now, all Medicare beneficiaries with private insurance should have received copies of their insurer’s 2016 plan documents. These go by the snappy names of ANOC (annual notice of change) and EOC (evidence of coverage). Read the shorter ANOC and use the more encyclopedic EOC as a reference document. But do read them.
Next, understand the basic choices you have. There are only a few, so this part of open enrollment need not be complicated at all.
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People with Original Medicare can choose whether to also buy a Medigap policy, which is also called a Medicare supplement policy. Medigap policies fill, to varying degrees, the holes in Original Medicare. The biggest hole is that Original Medicare pays only 80 percent of covered expenses, leaving beneficiaries on the hook for the other 20 percent. As anyone who’s stayed in a hospital or had major surgery knows, that can be 20 percent of a very, very big number.
If you don’t have Medigap or even if you do, you can select a Medigap plan during open enrollment. There are 10 different Medigap “letter” plans. Coverage within each type of plan must be identical. This means that all letter A plans are the same, all letter B plans and so on. But premiums can and do vary a lot. So shopping around for the best rate is a must. Specific coverage requirements of the various plans have not changed much since I wrote about them a year ago. You can find them on page 101 of “Medicare & You 2016.”
Unfortunately, Medigap policies may be very pricey for people once they’ve passed the early period when they first were eligible for Medicare. During this period, most people had what is called “guaranteed issue” rights to Medigap. This means that private Medigap insurers had to sell them a policy, regardless of their age or medical condition. They could not “underwrite” them to tack on higher premiums or coverage restrictions tied to a person’s pre-existing medical conditions.
So if you want to switch from one Medigap plan to another, you may find this a very expensive shift. If you have serious medical issues, insurers don’t even have to sell you a Medigap policy once you’re no longer protected by those guaranteed issue rights.
People with Original Medicare also have the option during open enrollment of buying a Medicare Advantage plan. And those with Medicare Advantage can pick a different Medicare Advantage plan. They cannot be denied coverage or required to pay more because of pre-existing conditions. (An exception to this rule is that people with end stage renal disease are not eligible for Medicare Advantage plans.)
People with Original Medicare who switch to Medicare Advantage cannot keep their Medigap plan should they have one. Medigap plans do not provide any coverage to people with Medicare Advantage. If you do drop a Medigap plan and shift to Medicare Advantage, you need to be aware that reversing this decision next year may not be possible, given your loss of guaranteed issue rights.
Everyone with Medicare — the roughly 70 percent with Original Medicare and the 30 percent with Medicare Advantage — also has the option during open enrollment of changing their Part D prescription plan.
Next week’s column will be about how to pick a Part D plan. The following week, Medicare Advantage plans will be in the spotlight.
For now, your homework is to locate your EOC and ANOC documents and read them.