Managing Medicare

Hi Gary,

I am a little confused by your question. Part A is automatic for anyone who worked and paid payroll taxes for 10 years or was married to someone who did. Assuming your father did, your mother has Part A. She could not get a private supplement plan without having Part A. It is possible to decline Part B, and many people who have insurance from an employer or union do this. Once that coverage ends, you have a special enrollment period when you can sign up for B and other supplemental coverage. If your mother needs supplemental Medicare coverage and can no longer qualify for a Medicare Supplement plan, there is still time left in Medicare’s annual enrollment period, which ends December 7 and she can sign up for a Medicare Advantage plan at any time between now and then. Any Medicare Advantage plan would cap her out-of-pocket costs at $6,700 or less – the average cap in 2013 is $4,500. If there is a 5 star Medicare Advantage plan in her area she can sign up for that at any time. And, it is critical that she use her own Social Security number, not your father’s, when trying to enroll in coverage. There are a number of things in your question that don’t track with what we know about Medicare and how it works. Therefore I encourage you to contact a licensed agent to receive further input on your questions. You can contact PlanPrescriber at 888-312-5447 TTY: 711 as well as the Medicare office directly at 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week. You can also contact the Social Security Office at 1-800-772-1213 between 7 am and 7 pm, Monday through Friday.
 

If you’re new to Medicare, there are important decisions you need to make right now that could affect your Medicare coverage for the rest of your life. Right now you need to decide if you want a Medicare Supplement plan, or if you want to stick with some combination of Parts A, B and D or Part C.

Before I dazzle you with product details, let me give the basics on Medicare. Medicare A&B (what’s called original Medicare) is a great benefit, and it will only cost you about $100 a month from your social security check for Part B. But A&B (original Medicare) has three gaps you need to be aware of:

1. Cost-Sharing: They have cost-sharing requirements like copays, multiple deductibles and co-insurance. And, all of these things can vary depending on what type of care you need, when you need it and how long you need it for.
2. No maximum out-of-pocket limit: Parts A&B have no annual cap or limit on what you can spend out of pocket. In a worst-case type scenario, even with original Medicare (Parts A&B) you could face excessive out-of-pocket medical costs.
3. No prescription drug coverage: Parts A&B do not cover prescription drugs.

The decisions you need to make now are: Are you going to fill those gaps and, if so, how? You have three options:

1. Just adding prescription drug coverage: Unlike Parts A&B, you cannot get Medicare Part D (the prescription drug benefit) from the government. You have to buy it from a private insurance company. If you don’t buy it when you’re first eligible, you have to wait until next year’s annual enrollment period (October 15 to December 7) and you’ll pay a permanent penalty for waiting. Plans start as low as $15 a month. What’s critical to remember is that these plans are regulated and subsidized by the government to provide a minimum standard benefit, but then they can add in any additional benefits to make them more attractive. And you may pay more for the more comprehensive plans, but not always.

We see plans that cover as few as 49% of all available drugs, which means if you’re taking one of the 51% you’re plan does not cover, you’re not benefiting at all from having a prescription drug plan. Make sure, if you buy a Part D plan, that it covers the drugs you take. And check your coverage every year. You have the option during that annual enrollment period to review your drug coverage, and it’s a good idea to use it. People save on average over $600 a year when they do a review, primarily because the drug plan formularies change each year, and they also change how much of a drug’s cost they’ll cover. If you ignore the annual check-up, you may get hammered with prescription drug sticker-shock the following year.

2. Adding prescription drug coverage and limiting your out of pocket risk: Medicare Part C – also called Medicare Advantage – combines Medicare Parts A, B and D into a single insurance policy that you have to buy from a private insurer. Just like Part D, these plans are regulated and partially subsidized by the government, but they’re run by private insurance companies. About a third of all plans available nationally (32%) have a $0 premium, which means you get Part C for the same price you pay the government for Part B (about $100 for newcomers). The average priced Medicare Advantage plan nationally is about $60 this year.

All Medicare Advantage plans have two major benefits. First, most provide a Part D prescription drug benefit, which is built into the price. Even most $0 plans have a Part D benefit built in. And Medicare Part C plans must – by law – cap your out-of-pocket risk at $6,700 or less. In 2013 the average cap on out of pocket costs is about $4,500 but some plans go as low as $500 for in-network care. Some plans also include other benefits, like dental and vision care, and you may pay more for plans with those additional of benefits.

The other nice thing about Part C is that you can change your plan every year during this same annual enrollment period that runs from October 15 to December 7. So, if you’re super healthy now you can get a low-cost $0 plan that fits your current needs and saves you money, and further down the road if your health deteriorates you’re able to buy a more comprehensive plan.

3. Getting “Cadillac” Insurance: Right now, because you’re new to Medicare, you have the option to enroll in a Medicare Supplement plan. If you wait too long (typically the six months surrounding your 65th birthday month) the insurance company can decline your application in most states. Medicare Supplements are designed to fill the gaps in Original Medicare (Parts A&B) and give you maximum access to doctors, hospitals and specialists with little or no out-of-pocket risks. The “top tier” Supplement plan is an F plan, and these plans cost – on average – about $170 a year on top of Part B.

Most Medicare Supplement plans do not include prescription drug coverage, but a few have begun to do so this year. Most people with a Supplement plan do have to buy their drug coverage separately, so you’re looking at about $185 to $200 a month on average if you combine an F Supplement with a Part D plan. With that, you’ll be at a far smaller risk of out of pocket costs. For things like knee replacements, heart surgery, etc. you’ll often hear people on Medicare Supplements say they paid little or nothing out of pocket. One man told me after his hip replacement that, “I never even saw a bill.”

The downside of Supplement plans are that: A) they’re more expensive every month, so if you don’t get sick or need surgery, you’re not saving money; B) the premiums tend to increase over time, so as you age they’ll cost more and; C) it gets harder and harder to switch from one supplement to another, the older you get. Remember, insurance companies can decline you after that initial eligibility period. What sometimes happens is that people start on Supplements and then the plan eventually becomes too costly so they switch to Part C.

Medicare is complex and has important gaps you need to be aware of. You do have these private options available to fill those gaps, so the real dilemma is how and what “gap fillers” to choose. I’d encourage you to start by assessing your financial situation and figuring out what you can afford each month, and what you could afford in a medical emergency. Once you know that, go to a website like ours at http://www.planprescriber.com and shop around. Look at Medicare Advantage (Part C) plans, Medicare Part D drug plans and Medicare Supplement plans. Get a sense of what they’ll cost you, what they’ll cover and what you’ll be responsible for in a medical emergency. Then, compare that to your budget so you can make an informed decision.

 

You’re right to be asking this question. Humana Gold Plus is a Medicare Advantage plan, which means it’s likely to be built specifically for your county with local doctors and hospitals all built into a network. If you’re going to leave the area for an extended period of time, there are three things you should do:

1. Call Humana and let them know. Let them know where you’re going and how long you’ll be there. Trust me, they get this question a lot and they’ll have a plan for you, especially in a major metro area like Seattle.

2. Have a plan for your prescription drugs. When you talk to Humana, have a complete list of the drugs your taking and find out if there is a preferred pharmacy they’d recommend where you can get your drugs at the best price OR see if you can order your drugs through the mail. You’ll typically get a 3-month supply, which may cover your entire trip.

3. Look into travel insurance. Even if Humana has a way for you to receive care while you’re in Seattle, the out-of-pocket costs may be higher. Some Medicare Advantage plans have different out-of-pocket limits if you’re in-network compared to out-of-network. A travel insurance plan can help you cover some of those costs if the worst should happen, and the plans are typically very affordable.


 

“Just Medicare” is typically referred to as “Original Medicare.” Your HMO plan is a Medicare Advantage plan. Typically, what you’re buying with a Medicare Advantage HMO plan is:

• An HMO network of providers who are contracted to provide you with service
• Prescription drug coverage
• An annual limit of no more than $6,700 on the amount of money you’ll pay out of pocket.

Most Advantage HMO plans will have these three things, but they’re not provided by Original Medicare. Original Medicare is a terrific benefit, but it has gaps. Original Medicare (Parts A and B) have deductibles. And the Part A deductible is not tied to a calendar year like they are with traditional health insurance. Instead, it’s tied to a 90-day benefit period, with some exceptions. After the 90 days, the deductible typically resets.

The Part B benefit includes coinsurance after you meet your deductible, which means Medicare pays a percentage of each bill and you pay the rest (typically between 20 and 45 percent, depending on the service) after applicable premiums and deductibles. Your Advantage plan may also have deductibles and coinsurance, but Original Medicare does not limit how much you’ll pay out of your own pocket for covered medical services each year. And, again, Original Medicare does not cover the cost of most prescription drugs. Many people who participate in Medicare without an Advantage plan elect to fill the gaps with Medicare Supplement and a Part D prescription drug plan.

If you’re trying to save money on your monthly premiums, you can go online to see prices and benefits for competing Medicare Advantage plans that may be an option for you. Each year there is an annual enrollment period when you can switch from one plan to another. This year the annual enrollment period runs from October 15 through December 7. If you do decide to go with original Medicare, you will need to enroll in a stand-alone Medicare Part D plan to be sure you have prescription drug coverage and don’t face penalties for going without. You can pick your Part D plan during the same annual enrollment period.

You may also try to get coverage through a Medicare Supplement, but most Medicare Supplement plans will require you to pass a health screen if you are not within your first six months of Medicare eligibility. So, there is a chance you will not have access to that alternative.

Details about Medicare Advantage Plans for 2012 will soon be available. Medicare reports that on average Medicare Advantage premiums will be four percent lower for 2012. That is good news, but it is still important to see what your plan will charge in premiums next year. Also, review your copayments if you require medical care, your out of pocket spending limits and your prescription drug benefit.
 

Medicare might pay for the bed rails. The doctor’s order is necessary and the equipment must be purchased from a Medicare certified supplier. You can check with Medicare in advance of the purchase by calling 1-800-MEDICARE. If you have a Medicare Advantage plan you should check with that plan to make sure you follow its requirements.  

You’re right. The donut hole resets each year. Annual enrollment for the 2012 plan year runs from October 15 through December 7, 2011, so we are approaching the right time for you to go online and check to see if there will be any changes in your mother’s existing plan as well as the whether the coverage provided by other plans better fit her situation. I would highly recommend that you use a Medicare Part D prescription drug plan comparison tool, such as the one we offer at PlanPrescriber.com or the one that is available at Medicare.gov. Here’s why: If your mother hits the donut hole in 2012 she can get a 50 percent discount on brand-name drugs and a 14 percent discount on generic drugs if the drugs she’s taking are covered by her plan.

She can only access those discounts if the drugs she takes are covered by the plan she’s enrolled in. And, if the plan she selects does not include her drugs on the plan’s formulary, she could wind up paying full price for those drugs.
 

If you are a caregiver for your parents and you’re trying to enroll them in a Medicare Part D plan when they’re not with you, make sure you have your parent(s) give you power of attorney so that you’re authorized to make that decision. When you sign your parents up, the insurance company will ask you for a copy of the power of attorney when you sign the paperwork. However, if you don’t have power of attorney, don’t let that stop you from helping your parent(s) enroll. You can work with an agent to pick the right plan, and then have your parent follow-up with the agent to confirm their decision.

If your mother is just looking to you for a second opinion on her choices, she can ask her agent to add you to a conference call when she is reviewing options with the agent. The agent should be able to make plan materials available to you by e-mail.
 

This is a great question as it is an important reminder to everyone enrolling in Medicare plans this year. Medicare’s Annual Enrollment Period (AEP) for Prescription Drug and Medicare Advantage plans did change this year. The new Annual Enrollment Period takes place between October 15 and December 7, 2011. It starts a full month earlier than last year and ends three weeks earlier as well (previously, AEP ran from November 15 – December 31).

What’s good about the date change is that it pushes the enrollment process up ahead of the holiday season, where most people probably don’t want to be pouring through insurance information. The bad news is that not everybody may be keeping track of these new dates. Every year we get phone calls on January 1st from people who forgot to call in December and want to try and make a late change to their coverage. And, unfortunately, we have to tell them that they’re too late. I’m fully anticipating the number of these calls to increase in 2011.

That being said, I do think that in the long run the date change is a good thing. In the past, Medicare’s Annual Enrollment Period encompassed Thanksgiving, Chanukah and Christmas, and ended on New Year’s Eve. These are major US holidays when people tend to travel, visit family and generally just have an awful lot going on. By moving the event up three weeks, my hope is that more people will make their changes early so that they can get it over with and enjoy the holiday season.