Medicare's Annual Enrollment Period (AEP) runs each year from Oct. 15 to Dec. 7. AEP is the time of year when you can review your Medicare Advantage or Medicare prescription drug plan to make sure it's still the best plan for you. And, if it's not, it's the time of year that anyone can make a change.
Ross Blair is chief executive officer of PlanPrescriber.com, a division of eHealth. PlanPrescriber.com provides no cost, no obligation comparison tools and educational materials for Medicare-related insurance. Ross discussed with AgingCare.com some of the challenges Medicare beneficiaries and their advisors face each year during the AEP.
What should people considering Medicare Advantage during AEP be thinking about?
For some people, Medicare Advantage is a great option because the monthly premiums are usually lower than combining a Medicare Supplement plan (also called Medigap) with a stand-alone Part D drug plan. In fact, many Medicare Advantage plans in 2015 will have no additional monthly premium, which makes them less expensive than a stand-alone drug plan. In 2016, the average monthly premium for a Medicare Advantage plan was $32.60, and the average annual out-of-pocket maximum was $6,700. But the key is to understand your needs and know what you are buying.
How is Medicare Advantage different from original Medicare?
"Original Medicare," the traditional benefit provided by the government, has two parts: Part A (hospital insurance) and Part B (medical insurance). It's a fantastic benefit, but it has some gaps. It does not include prescription drug coverage; there is no cap on out-of-pocket expenses; there are separate deductibles for Part A and B; and there is coinsurance for most Part B benefits. An example of coinsurance would be needing to pay 20 percent of a physician's fee out of your own pocket.
There are different types of Medicare Advantage plans (also called Medicare Part C), including HMOs and PPOs. Most plans combine Original Medicare with Medicare Part D prescription drug coverage into one plan. The plans are completely managed by a private insurance company so they set up the physician networks on their own and manage payments. These private companies that offer Medicare Advantage must be approved by Medicare and provide comparable benefits to Parts A and B. In 2016, the health reform law placed a mandatory maximum limit of $6,700 on all out-of-pocket medical costs for Medicare Advantage plans. That's the mandatory maximum, but some plans offer a lower cap.
What are the important differences between Medicare Advantage and Medicare Supplement plans?
A Medicare supplement covers gaps in Medicare, but does not cover prescription drug costs. You would need to enroll in a separate Medicare drug plan to get that benefit. Medicare Supplement plans also typically provide more "first dollar" coverage when you require medical care. Put another way, Medicare Supplements typically pay your co-pays, coinsurance and deductibles, so you're less likely to have any large out-of-pocket costs if you get sick. Medicare Advantage plans often include a prescription drug benefit, making them more comprehensive in some ways. However, Medicare Advantage plans still typically require people to pay deductibles and co-payments until the maximum out-of-pocket limit is reached.
What should people think about when it comes to out-of-pocket costs with Medicare?
Whether or not you need a Medicare Advantage plan depends, at least in part, on how much out-of-pocket expense you are willing to take on. If you could afford your plan's maximum out-of-pocket limit, then Medicare Advantage may be a good option for you. If you could not afford the plan's annual out-of-pocket limit, you might want to consider a Medicare Supplement. And remember, the "Original Medicare" you get from the government does not have a limit on out-of-pocket costs.
Can a person keep their doctor with Medicare Advantage?
Not always. Some Medicare Advantage plans are PPOs or POS plans, which means they'll give you more flexibility when selecting a physician. However, it's always a good idea to make sure the doctor you want to use accepts the Medicare Advantage plan you want to enroll in. If the plan does have a designated network, check beforehand that he or she is an in-network provider for the plan you are considering.
What should people know about medications and Medicare Advantage?
Whether you're in Medicare Advantage or a stand-alone Medicare prescription drug plan, you need to check your medications each year during the AEP to be sure they're still covered in the coming year. Drug plan formularies change every year, which means your drug costs can skyrocket from year to year if you're not paying attention.
Where can people turn for help?
Anyone struggling to select the right Medicare plan should contact Medicare at Medicare.gov or by calling 1-800-MEDICARE (1 800-633-4227) 24 hours a day, seven days a week. Or, you can find help at the Plan Prescriber and My Medicare Matters websites.