Friday is the deadline to sign up for this year’s Medicare open enrollment. If you are 65 years old or older, or about to enter that age group, it might be a good time to consider your plan options to avoid headaches down the line.
“Medicare, it’s much beloved, but it’s also very complicated,” Rovner says.
How Does Medicare Open Enrollment Work?
“There are actually sort of three types of open enrollment for Medicare,” Rovner says. “The one that we’re in now that ends at the end of this week is the time when anybody on Medicare can change their plan. But every single person has their own open enrollment.
“The first one comes when you turn 65, when you are eligible if you’ve worked 10 years, 40 quarters, to sign up for Part A, just the … hospital and nursing home part of Medicare, and that’s free. You don’t have to pay a premium if you’ve worked enough quarters, but you need to sign up for it.
“The other part is Part B, that’s the outpatient part of Medicare. When you stop working, if you no longer have employer insurance, that’s when you sign up for Part B and Part D, which is the prescription drug part.”
‘Even If I Have Health Insurance, Medicare Part A Can Pick Up Additional Costs?’
“Absolutely correct. If you’re already on Social Security, you’ll be signed up for Part A automatically,” Rovner says. “But if you’re still working, you have to affirmatively tell Social Security, ‘Yes, I’m still working, but I’m turning 65. I want Part A.’
“It’s really important to do that if you work for an employer with fewer than 20 employees, because in that case, Medicare becomes your primary insurer. If you work for a larger firm, it becomes your secondary insurer, so what your employer insurance doesn’t pay, Medicare might.”
You Had Medicare Part A Supplementing Your Employer Insurance. But Once Your Employment Ends …
“Then you have to think about what kind of supplemental insurance you want,” Rovner says, “because for all of how wonderful Medicare is for most of its beneficiaries, it doesn’t cover a lot of things, so you will need some kind of supplement.
“You can stay in the traditional Medicare program, where you can go to any doctor or hospital you want, then you can buy a Medigap plan, a supplemental plan that covers literally the gaps in Medicare — your deductibles and your copayments — and then you can buy a Part D plan, a prescription drug plan that comes separately. Those are the things that you can change during open enrollment every year.
“Or you can go into what’s called a Medicare Advantage Plan, which is Part C, which is a private plan that covers almost everything that Medicare doesn’t, including drugs, sometimes dental and vision coverage. The trick with those is that once you’ve joined you might not be able to go back to traditional Medicare and get a traditional [supplemental plan]. Also, you must go and see only the providers that are signed up with that plan, so you have a much more limited group of providers. Those things are what you can change during the open enrollment every year that we’re in now.”
Why Is It Hard To Go Back To Traditional Medicare, If Someone’s On A Medicare Advantage Plan?
“Because the Medigap plans, the private supplemental plans, they only have guaranteed issue when you are first eligible,” Rovner says, “so if you go into a Medicare Advantage Plan, a managed-care plan, and then you get sick and you decide it doesn’t have the doctors you want and you want to go back to traditional Medicare, you can go back to traditional Medicare, but you might not be able to get a regular Medigap plan anymore, because now you have a preexisting condition and now you’re outside of that guaranteed-issue window. So it can be tricky to go back and forth. A lot of people get caught in that trap.”
Signing Up For Parts A, B And D Vs. Only Part C (Medicare Advantage): Is One Better Than The Other?
“One isn’t better than the other, and this is one of those cases where it’s good to have choices,” Rovner says, “because some things are going to definitely be better for some people and other things are going to be better for other people.
“Part of it is how important it is to you to stick with your doctor, if you have one, and whether that doctor is part of a Medicare HMO [health maintenance organization] or not. If you’re very comfortable with your health care providers and they don’t belong to one of these managed care plans, then you probably want to stay in traditional Medicare.
“If you’re really worried about out-of-pocket spending and you want those extra benefits and you’re OK with being in a managed care plan, a lot of people now turning 65 have been in managed care for a long time. That’s why we’re actually seeing enrollment go up. Those people are perfectly happy in Medicare Advantage, so it’s a very individual choice.”
What Should People Look For When Searching For The Right Coverage?
“In some ways it’s a lot like car insurance: The more you pay in premiums, the less you’ll pay out of pocket if you get sick, and vice versa,” Rovner says. “So you really need to look at the different Medigap plans, what they cover, what the premiums are, where you’re comfortable with having a lot of insurance or not so much insurance and what you might be exposed to.”
What’s The Biggest Mistake People Make When Signing Up For Medicare?
“I think one of the big mistakes people make is missing that open enrollment period, and remember as we said, there’s several of them there,” Rovner says. “You get sort of two for yourself, and then there’s one every year. But if you miss signing up when you were supposed to sign up, you could pay a penalty into perpetuity. So you would have to pay a higher premium, and that does happen to a lot of people.
“You do get a lot of mail and a lot of them are ads, but it’s really important to, as you’re reaching 65 or as you’re preparing to retire from your job if you have employer health insurance, to really find out when those deadlines are and to meet them.”