(BPT) - Fall and winter don’t just bring cooler temperatures and the holidays — the final seasons of the year also mean open enrollment for Medicare. For most seniors in the United States, the period between Oct. 15 and Dec. 7 is the only time they can switch or make changes to their Medicare insurance plan.
“As people age, their health care needs evolve,” says Dawn Maroney, chief growth and strategy officer for Alignment Healthcare. “When that happens, they may find the Medicare plan they first chose when they became eligible no longer meets all their needs. This open enrollment period is their yearly opportunity to re-evaluate whether to continue with their plan or switch to another, with changes becoming effective the first of the new year.”
Most Americans are aware that Medicare is a government program designed to ensure people older than 65 have access to affordable health insurance. The program can also cover people younger than 65 who have certain disabilities.
The Medicare program has four parts, according to Medicare.gov: A, B, C and D.
* Medicare Part A helps pay for in-patient hospital stays, care in a skilled nursing facility and hospice care.
* Medicare Part B helps cover care by doctors or other health care providers, outpatient services, some medical equipment and some preventive services.
* Medicare Part C (also known as Medicare Advantage) covers everything included in parts A and B, and usually includes Medicare prescription drug coverage as part of the plan. Medicare Advantage plans may include extra benefits and services for an extra cost. Medicare-approved private insurance companies, such as Alignment Healthcare's Alignment Health Plan, run Medicare Advantage plans.
* Medicare Part D helps cover the cost of prescription medications and is run by Medicare-approved private insurance companies.
Original Medicare versus Medicare Advantage
Most people think of Medicare parts A and B as Original Medicare, in which the government pays directly for the health care services received. People with Original Medicare can see any doctor and hospital that accepts Medicare in the country, without prior approval from Medicare or their primary care physician. Most people do not pay a monthly premium for Part A if they paid taxes while working; everyone pays a monthly premium for Part B, based on income. The standard premium for Part B in 2017 was $134 per month, which is deducted from the individual's Social Security benefits.
Original Medicare pays for about 80 percent of the total costs of health care. The patient is responsible for the remaining 20 percent, which can mean high out-of-pocket costs in the event of a hospitalization or other events requiring significant medical attention. To offset the financial burden of that 20 percent, some people choose to purchase supplemental insurance, called Medigap.
Private insurance companies offer Medigap to cover things Medicare doesn’t, such as deductibles, co-pays and co-insurance — but, keep in mind, Medigap only supplements Original Medicare benefits. Further, if you do not apply for Medigap in the first six months of becoming eligible, there's no guarantee that an insurance company will sell you a Medigap policy.
With Medicare Advantage, government-approved private companies administer health plans that cover everything Original Medicare does, but can do so with different rules, costs and restrictions that can change every year. For example, a private Medicare plan may require your physician to request permission before performing a procedure in order to be paid by the plan. Medicare Advantage plans, however, usually cover extras that Original Medicare does not, like dental care, vision services, hearing exams and gym memberships.
Most Medicare Advantage plans also include prescription drug coverage (Medicare Part D), which is not included in Original Medicare, at no additional cost. If you elect to enroll in a Medicare Advantage plan, you still have Medicare — this means that you must still pay your monthly premiums for parts A and B, in addition to a monthly premium for Part C, if applicable. Many Medicare Advantage plans are available for no additional monthly premium.
Considerations when choosing
When choosing between Original Medicare and Medicare Advantage, you should consider these questions:
* How likely is it your health needs will change down the road? Since health changes as you age, chances are your treatment needs will, too. If you don’t enroll in the additional insurance and drug coverage when you first sign up for Original Medicare, you may pay a monthly penalty for enrolling later and may not be eligible for additional Medigap coverage.
* Are you still working past age 65? If so, you will probably want to enroll in Part A, because there generally are no monthly premiums, and it may supplement your employer’s insurance plan. You might choose to delay enrolling in Part B, but it depends on your health coverage. Everyone has to pay a monthly premium for Part B.
* Is it more important to you to have lower or no premiums or lower out-of-pocket costs? With Original Medicare, you may pay more out of pocket without supplemental insurance and prescription drug coverage. Medicare Advantage includes supplemental insurance and sometimes prescription drug coverage, too.
* How important is it to keep your doctor? Original Medicare is accepted by any doctor or hospital that accepts Medicare, without referral. Medicare Advantage plans allow you to select a doctor from the plan network, which is usually very large; your current health care providers are likely to be in the network already.
* Do you regularly take prescription medication for chronic conditions? Prescription drug coverage is not included in Original Medicare, and if you fail to sign up for Part D at the time you enroll, you could pay a penalty for adding it later. Most Medicare Advantage plans do cover prescription drugs.
“Medicare Advantage allows patients to receive the care they need to stay well and keeps their budgets in check with set costs and annual maximums,” Maroney says. “It’s an ideal solution for patients who need frequent care or who struggle to meet medical expenses.”