OurSeniors are likely to intersect with Medicare frequently. In many cases, a senior’s first ever interaction with Medicare may be the most important; it will have lasting effects.
Unfortunately, many younger seniors are not well prepared for this introduction. They have given little thought to their Medicare options and do not understand how early choices will affect them in the future. Months before turning 65, they will begin receiving advertisements via mail, email, or even telephone directing them to various Medicare options. Some of these options may be well-suited to their needs, but others not.
Medicare’s Initial Enrollment Period begins three months before the enrollee’s birth month, includes that birth month, and goes on for three months more. During this seven-month period, the senior is asked to make important choices. Seniors who started receiving Social Security benefits before age 65 will automatically be enrolled in Original Medicare Parts A and B. Seniors who are not already getting benefits should enroll themselves as early as possible in the enrollment period. You can enroll in Medicare online through the official Social Security website, by calling the Social Security Administration at 1-800-772-1213, or by visiting your local Social Security office.
Whether you are enrolled automatically or self-enrolled, Medicare will send you a welcome letter early in your Initial Enrollment Period. This is accompanied by instructions on how to proceed. These instructions will tell you how to enroll in an Advantage plan (Medicare Part C) or to remain with Original Medicare, Parts A and B. Seniors will make a better choice if they have prepared for this decision, but most have not. If you or someone you know is about to enter the Initial Enrollment Period, NOW is the time to plan this out. The best decision is very much an individual matter. Even a senior couple, living in the same house, may have very different needs.
Advantage plans are a form of “managed care,” in which the Medicare enrollee is placed in a network of doctors, hospitals, pharmacies, and other care providers associated with that plan. Using a provider outside the network may not be covered by Advantage plans. Many medical professionals feel that managed care is better care, because it encourages coordination between care providers. Advantage plans simplify things for most seniors; they combine hospital, doctor, pharmacy, and other coverage into one package. They may offer other perks like gym memberships designed to keep seniors healthy. On the other hand, Advantage plans restrict the choices you can make and may require prior approval before you see a specialist. Once you are in an Advantage plan, it is difficult to change until the Annual Enrollment Period that comes once a year.
Original Medicare provides major (but not complete) coverage for hospital and non-hospital expenses. It allows you to choose any care provider who accepts Medicare, not restricting you to a network. Original Medicare alone includes no prescription drug coverage. Because this coverage is not complete, it is wise to buy a supplemental plan (Medigap) to cover hospital and non-hospital care and a separate Part D plan to help pay drug costs. This means that you will be dealing with several different insurance policies.
Choosing between Advantage Medicare and Original is the first big decision you must make. This may be a complicated choice involving several factors. Each senior’s circumstances will be different, so you must educate yourself to make this decision. Below are some key facts to consider when deciding.
Advantage plans are local organizations with a fixed set (a network) of local providers from whom you must get care. Medigap plans pay for Medicare approved services throughout the United States.
Medigap plans are designed to fill in the gaps between what a provider charges and what Medicare pays (typically 80% of the approved charge.) There are ten standard Medigap plans labeled with letters A, B, C, D, F, G, K, L, M, and N. Each lettered plan provides a specific set of benefits, and the coverage is the same for all plans with the same letter, regardless of the insurance company offering them or where they are sold.
Advantage plans can vary greatly between insurance companies and locations. Seniors opting for an Advantage plan should compare benefits and costs carefully. Review the plan’s Summary of Benefits document. It will tell you what’s covered, as well as listing copay amounts, deductibles, and premiums for which you’ll be responsible.
The monthly payment deducted from Social Security benefits is the same for Original Medicare and Advantage plan members. Seniors enrolled in Medicare Advantage plans continue to pay their Medicare Part B premium, which is typically deducted from their Social Security benefits. Medicare Advantage plans are sometimes called replacement plans, but this isn’t quite true. You’ll need Original Medicare in order to enroll in Part C.
Advantage plan benefits are subject to change each year, while Medigap letter plans are unchanging by law. Advantage members should review their Annual Notice of Change letter each year to be certain the plan still meets their needs.
The Initial Enrollment Period offers a one-time opportunity to be automatically accepted by a company offering Medigap plans. If you miss this chance, the underwriter may require you to pass a physical examination, pay a higher premium or even refuse to write the policy. Once you are accepted by a Medigap plan provider, you are guaranteed coverage if you pay the premium. You cannot be cancelled or charged higher than normal premiums.
That is a brief summary of the Initial Enrollment Period. In the future, we will try to bring bite-sized lessons about important aspects of Medicare. A lot of OurSeniors cross paths with Medicare each day. We call it Medicare Corners. Thanks for reading our blog and have a great day!
