Every fall, Medicare recipients–your parents included–are bombarded with notifications about the upcoming “open enrollment” period and their options for switching coverage. As you read them, be aware that these notifications basically are advertisements for the different plans.
This annual “open enrollment” period, currently from about October 15 through December 7, should not be confused with the initial seven-month long “open enrollment” for Medicare, which begins three months before the month in which a prospective beneficiary turns 65, includes the birthday month, and extends for three months after the birthday month. Those who fail to sign up during this initial period can do so during subsequent yearly open enrollment periods, but may be penalized with higher Part B premiums.
The annual open enrollment period gives current beneficiaries, your parents included, a chance to switch plans if they can find a better deal. Options depend on where you live and what local insurers have to offer. Choices are much greater in some areas than in others. The annual “Medicare and You” book Medicare sends to beneficiaries provides a list of plans available in your state and local area.
Basically, the choice is between staying with Original Medicare (and any Medigap policy your parents may have purchased to help with co-pays, deductibles and other expenses) if that’s the coverage your parents have and exchanging Original Medicare and Medigap for a Part C Medicare Advantage policy. (Read our article on Understanding Your Elderly Parents’ Medicare Coverage for a discussion on Medigap and Medicare Part C plans.)
Be Aware of the Tradeoffs
If you or your parents are tempted to switch, you need to be aware of the tradeoffs.
Medicare Advantage plans, by law, must cover all the services that original Medicare covers except for hospice care and some care for qualifying clinical research studies. Most plans also include Part D, prescription drug coverage.
Medicare pays a fixed amount for your basic Medicare coverage to the company that offers the Medicare Advantage Plan you select, but that company can charge different out-of-pocket costs and set its own rules for how you get care, such as whether you need referrals to a specialist or can only use in-network providers.
Medicare Advantage plans also may offer coverage for services not included in Medicare, such as dental, vision and hearing care, so you need to read through what is covered, and what it costs, carefully. Medicare Advantage Plans may charge a monthly premium in addition to the Part B premium and also add co-pays for provider visits.
Many Medicare Advantage Plans are HMOs (health maintenance organizations, Kaiser Permanente is an example) or PPOs, preferred provider organizations, which may limit your choice of physicians and/or hospitals or restrict access to specialists.
Before making a switch, it might be wise to check with Medicare, your local Social Security office, or a licensed insurance broker to see if Medicare Advantage Plans are better plans for your parents.
Pay Attention to Coverage Details
While there are a number of different types of Medicare Advantage plans, they vary, so you have to understand how each plan operates before you join. For example, the “Evidence of Coverage” information the plan provides tells you, in detail, what the plan covers and how much you pay. Both are subject to change, so plans also provide an “Annual Notice of Change” alerting you to any changes in coverage and costs that will take place the following year.
If the Medicare Advantage Plan that interests your parents has a provider network, you need to find out what happens if you go to a doctor who is not in the network. Will services be covered or will you simply have to pay more? You also should find out what happens if your plan changes its providers during the year. Will you need to find a new doctor?
Once you have studied all the plans available to your parents and helped them decide which to choose, you have the period between October 15 and December 7, the “open enrollment” period, to switch no matter how you do it: one Medicare Advantage Plan to another, original Medicare to a Medicare Advantage Plan, Medicare Advantage Plan back to Medicare. Coverage with a new plan begins January 1 as long as the plan is notified of the change by December 7.
To confuse matters even more, you can switch out of a Medicare Advantage Plan back to Medicare between January 1 and February 14. If you make that switch, you have until February 14 to join a Part D, prescription drug plan. But that’s the only kind of change you can make during that period. You can’t switch Medicare Advantage plans or move from Original Medicare to a Medicare Advantage Plan, and you can’t switch from one Part D plan to another.
Given all the variables, you might want to check your options, coverage and costs with a licensed insurance broker who can run the numbers for you. The service is free and it will help answer your questions about the best coverage for your parents.