By asking the right questions about Medicare, you can avoid unexpected costs and penalties. These considerations will also guide you as you choose the Medicare plan that best suits your health needs and lifestyle.
To get started with these important decisions, ask yourself the following critical questions.
When Is Medicare Open Enrollment?
If you already have Medicare, open enrollment is the time period from October 15 to December 7 each year, during which you can switch to a different insurance plan.
If you’ve never had Medicare before, three months before you turn 65, you’ll enter into a seven-month enrollment period, during which you can sign up for Medicare. Regardless of when you sign up for coverage during those seven months, your plan will begin the month that you turn 65. If you neglect to sign up during the appropriate enrollment window but choose to enroll later, you’ll be charged a penalty fee for as long as you are on Medicare.
People often miss their Medigap open enrollment period (also known as the guaranteed issue period), which coincides with the initial Medicare open enrollment period. Some states have additional periods where people can get any Medigap plan they want or switch Medigap plans without being charged more if they have health problems — but in most states, there is a limited period to enroll in a Medigap plan.
Following your initial enrollment, you’ll be able to switch from original Medicare to a Medicare Advantage plan or join, change or discontinue your Part D Medicare Drug plan each year during the open enrollment period.
If you’re signed up for a Medicare Advantage plan and wish to switch to a different Advantage plan or change to Original Medicare, you can do so each year between Jan. 1 and March 31. If you do decide to switch from a Medicare Advantage plan to original Medicare, don’t forget to also sign up for a separate Plan D prescription drug plan. Also, it’s important to note that in most states, you may not be able to get a Medigap plan if you initially sign up for a Medicare Advantage plan and then decide to switch to original Medicare later.
Do You Have Any Expensive Procedures or Tests Coming Up?
If you have health issues or you know that you’ll need expensive tests and procedures in the next year, you should think about deductibles when choosing your Medicare plan for the year. The more health risks and conditions you have, and the older you get, the more likely it is that unexpected and potentially costly health problems will arise over the next year. Choosing a plan with higher premiums but lower deductibles and out-of-pocket costs for hospitalization may be the most sensible choice.
“A good candidate (for Medicare Advantage) is someone who can understand the rules and embrace them,” says Barbara Hopkins, a self-employed Medicare educator with nearly 30 years of experience in health payer operations, based out of Portland, Maine. “Second of all, if they have not had huge health problems up until the point of being 65, they’re going to be a pretty good candidate because it costs less to join a Medicare Advantage plan, and chances are they are going to be using less expensive services.”
Do All of My Doctors Accept Medicare?
Original Medicare has a network of providers spread across the United States. If the provider accepts assignment, they agree to the Medicare fee schedule and can’t charge more than Medicare recommends for individual services. If a provider is in-network but does not accept assignment, they can charge up to 15% more than Medicare suggests by tacking on a limiting charge.
There are basically three types of providers, explains Joel Mekler, a health benefits professional, Medicare expert and writer of the “Medicare Moments” weekly column in the New Castle (Pennsylvania) News. “They call them participating, non-participating and opt-out.”
Participating providers agree to charge only the amount that Medicare allows for services, while opt-out providers will not accept Medicare at all. If you want to see a physician that has opted out of Medicare, you will need to pay out of pocket for all of your medical care. On the other hand, non-participating providers “can balance bill (charge the patient the difference between what they charged and what the insurance company paid) the person up to 15% above the amount that Medicare will pay.”
With most Medicare Advantage plans, you’ll be limited to only seeing doctors in the plan’s network, wherein with original Medicare, you can see any doctor, although you may have to pay a higher price to see out-of-network providers.
Hopkins says if you’re considering a Medicare Advantage plan, it’s essential to consider “the rules of the Medicare Advantage plan that they’re choosing. They need to make sure their provider is in the network. They need to make sure that the hospitals they want to use are in the network, as well. If they are not, they need to know if it’s possible to see doctors beyond the specific network or not.”
PPO vs. HMO
All Medicare Advantage Plans are either Preferred Provider Organizations or Health Maintenance Organizations. In general, Medicare Advantage plans that are a PPO will allow you to see a wider network of providers than you can with a HMO.
“Although a Medicare PPO is a little more expensive, it allows for a larger network,” says Mekler. In other words, with a PPO, somebody could go in or out of the plan’s network. Unlike with an HMO, you won’t need a referral from your primary care doctor to see a specialist if you have a PPO. ”
How Much Do I Want The Extra Perks?
Medicare Advantage offers perks that original Medicare doesn’t, such as coverage for things like dentures, eyeglasses and gym memberships. However, you may need to pay extra for some of these perks or accept additional premiums. Advantage plans also require no out-of-pocket payment for mammogram and prostate screenings.
Shub Debgupta, founder and CEO at Predict Health, a health care analytics company, says that some innovative perks to reduce social isolation or improve living conditions that can affect health are becoming more commonplace among Medicare Advantage plans. Specifically, he points out that it’s becoming more common for beneficiaries who are eligible for both Medicare and Medicaid to receive assistance with air conditioning or air filters for their homes.
He explains that programs that help alleviate social isolation have become quite popular in the past year. “There are a few vendors offering that, so this is helping seniors. It could be peer-to-peer or it could be maybe a college student or somebody who could help run errands for them, who could drive them around.”
He also believes that technology support will become a more popular perk offered by Advantage plans in the near future. With more of our daily life becoming dependent on technology, this could be a very helpful service for seniors.
Financial planning is yet another Medicare Advantage perk that is quickly gaining steam, according to Debgupta.
How Do I File an Appeal?
Although many seniors find the perks offered by Medicare Advantage advertisements very appealing, eligible individuals should know that an April 2022 report from the inspector general’s office found that some Medicare Advantage insurance providers denied care or payment for care that would have been covered under original Medicare. In fact, 13% of the instances of denied prior authorization by Medicare Advantage providers met the eligibility requirements of original Medicare.
Debgupta says that it’s vital for people who have a claim denied to understand their rights of appeal. “When people do appeal or refile, the second refiling acceptance rate is in the nineties. Some of those (denials) are primarily paperwork glitches. The majority of appeals get accepted.”
How Much Money Do I Have for Out-of-Pocket Medical Expenses?
It’s a good idea to always prepare for the unexpected. Hopkins says that a good example of someone who might want to consider a Medicare Advantage plan would be someone “who wouldn’t mind putting aside a little bit of money every month” to cover deductibles, coinsurance and copayments for unforeseen medical problems.
Although all Medicare Advantage plans have an out-of-pocket maximum built into them, those limits only cover Medicare-eligible services. For example, the out-of-pocket maximum will not apply to extra benefits or most prescription drugs — those covered by original Medicare Part D.
Although your premiums will likely be higher with original Medicare compared to Medicare Advantage plans, the out-of-pocket costs for people with health problems will often be lower overall.
Does the Plan Cover Prescription Drugs?
Medicare drug coverage helps pay for prescription drugs, although this coverage is optional. It’s important to note that if you don’t sign up for drug coverage when you first sign up for Medicare and you don’t have other coverage at the time, you’ll need to pay a late penalty for the entire time that you are on Medicare if you sign up after the initial enrollment period has expired.
You can add a Medicare drug plan if you have Medicare Part A and Medicare Part B. Alternatively, you can sign up for a Medicare Advantage plan (Part C), which provides drug coverage.
All plans are required to cover a wide range of commonly prescribed medications. Each plan has a different formulary, which lists what medications are covered. The formulary must include no fewer than two drugs in each of the most commonly prescribed drug classes.
By looking at your medical history, taking stock of your health savings account and reviewing the doctors that you see most often, as well as the medications that you take, you’ll be equipped to make a wise decision when it comes time to sign up for or adjust your existing Medicare coverage. When it comes to health care, knowledge truly is power.
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