By Richard Klass and John Arfanis
Medicare eligibles have two coverage options – Original Medicare whose coverages are called Part A, B, C and D or Medicare Advantage Plans (Medicare Part C). Individual needs drive the best option choice that must be evaluated annually.
Newly Eligible Enrollees
The most common Medicare eligibility factor is the 65th birthday. For newly eligible individuals, decision angst is reduced.
1. New enrollees have seven months to enroll. The Medicare Advantage plan option may be selected three months before the birthday month through three months after the birthday month.
2. If a Medicare Advantage plan is selected, the individual can during any time in the next 12 months revert to original Medicare coverage without waiting a full year for the next annual enrollment period.
Existing Medicare Enrollees
Existing Medicare enrollees can review their health plan benefits at least every year.
Changing Medicare benefit coverage requires a decision between October 15th and December 7th – The Medicare Annual Enrollment Period or the Annual Election Period [AEP].(1) During the AEP, a Medicare eligible enrolled in Medicare Part A and B can:
• Switch from Medicare Advantage back to original Medicare coverage.
• If enrolled in original Medicare, the enrollee can add a Medicare supplement plan. These plans only apply in conjunction with those enrolled in Original Medicare and are provided by private insurers.
• Disenroll from original Medicare and enroll in a Medicare Advantage plan.
• Switch from one Medicare Advantage plan to another.
• Enroll in a Part D prescription drug plan or change from one Part D prescription drug plan to another.
• If enrolled in Original Medicare and supplemental benefits, switch or cancel Medicare dental and vision plans. Supplemental benefit plans are provided by private insurers and there is a premium involved.
Individuals Enrolled in and Keeping an Advantage Plan
For individuals enrolled in and keeping an Advantage Plan, the Medicare Advantage Open Enrollment Period (OEP) runs annually between January 1 and March 31.(2) A Medicare eligible can only enroll in a Medicare Advantage plan if they enroll in Medicare Part A and B. For most eligibles the 2022 monthly premium for Part B is $170.60. Usually there is no monthly Part A premium covering the hospital and facility coverage if an enrollee or spouse paid Medicare taxes for a certain amount of time.
People select Medicare Advantage due to lower overall cost of coverage and the simplicity of having a health, prescription, hearing, vision and dental benefit under one plan. One payor covers most healthcare expenditures for inpatient and outpatient care, and pharmaceuticals. Advantage Plans also typically cap the insured’s maximum-out-of-pocket cost.
It’s important to verify the plan network includes:
• Preferred doctors and hospitals and Centers of Excellence that treat illness.
• Preferred provider’s referral options.
• Access to the right providers in the right setting at the right time. Beware most managed care organizations may offer narrow provider network options and/or impose restrictions to access to reduce cost.
The most popular Advantage Plans belong to Humana (35%) and United Health Group (22%)(3); they dominate the South Florida market. Advantage Plan versus original Medicare penetration varies markedly by county: Miami-Dade County (74%) is highly penetrated (74%) followed by Broward (62%), and Palm Beach County (44%).
Original Medicare
The benefit of original Medicare is freedom of provider choice anywhere in the U.S. Many South Floridians are ‘snowbirds’ and or reside in multiple geographies so original Medicare with a Medicare Supplement can make sense for this cohort.
Nationally 93% of primary care doctors accept Medicare, but only 70% accept new patients.(4) Consequently it is very important to confirm the physician who resolves most of an individual’s health issues accepts Medicare.
For people desiring comprehensive health insurance coverage and minimal financial risk, Original Medicare necessitates multiple policies; some are government sponsored and some are private entity offerings. Consider:
• Original Medicare Part A covers hospital stays, limited skilled nursing facility/ rehabilitation (SNF) care, hospice care and limited home care services. Most people with Medicare Part A also purchase Part B which covers diagnostic and preventive services such as wellness checkups, vaccinations and colonoscopies.
• Medicare pays for only a portion of inpatient and outpatient services. Insureds need a supplemental policy that covers the “gaps” under Medicare Parts A & B. Medigap policies are standardized, and named by letters, Plans A-N. The challenge is picking the right plan benefits based on individual needs.
• Medicare doesn’t cover prescription drug costs. Individuals must investigate Part D plans in select geographies that have varying prices for pharmaceuticals in their formularies. This contrasts to Medicare Advantage plans that offer Part D under the same single premium that includes Part A and Part B services.
What’s Next
Answering the question “What is the most important reason for obtaining health care benefits?” supports making the right Medicare option selection. Medicare eligible can do their own homework on the Medicare.gov website or use an insurance professional.
Insurance professionals put top priorities into perspective and save research time on selecting Medicare health and drug plans, identifying participating Medicare doctors/ other providers, and determining the quality ratings of Medicare Advantage plans.
Richard Klass, President, 2CY, Inc. can be reached at rklass@2cy4u.com.
John Arfanis, President, Arfanis, Inc., can be reached at johnarfanis@gmail.com.
1 https://www.medicarefaq.com/faqs/medicare-annual-enrollment-period/
2 https://www.medicarefaq.com/faqs/medicare-advantage-open-enrollment-period/
2 https://www.medicare.gov/Pubs/pdf/11219-Understanding-Medicare-Part-C-D.pdf#:~:text=There%20are%20specific%20times%20when%20you%20can%20sign,certain%20enrollment%20periods%20each%20year.%20See%20page%205.
2 https://www.medicarefaq.com/faqs/medicare-annual-enrollment-period/
2 https://www.medicarefaq.com/faqs/medicare-advantage-open-enrollment-period/
3 CMS market share data as of October 2021.
4 Kaiser Family Foundation Research, October 2015
