Medicare’s Annual Enrollment Period (AEP)
October 15 – December 7th 2011 is Medicare’s AEP. If you feel like you’re seeing a lot of Medicare commercials on TV right now…well you are…and AEP is the reason. During AEP all individuals already on Medicare should review their current plan to make sure it still fits their needs and they have the opportunity to make certain changes during this time.
The following is a brief primer on Medicare that should help you better understand its parts so that you can make an informed decision. There is an outstanding publication put out by CMS called Medicare and You 2012 (used as a reference for this article), please refer to this publication for more information. There are many “moving” parts to Medicare and it can get complicated with exceptions, special time frames, etc. – the brief primer below is not all encompassing but meant as a starting point.
Let’s starts with the different parts of Medicare.
Part A (Hospital Insurance)
Helps cover inpatient care in hospitals as well as skilled nursing facilities, hospice and some home health care. Medicare Part A covers approx. 80% of costs – unless you purchase a supplement or choose a Medicare Advantage program you will be responsible for the remainder of the costs with no maximum out of pocket in any given year. Most people receive Part A at no charge if they are over 65 years of age (or disabled), are a legal resident or citizen and either you or your spouse have worked in Medicare-covered employment for at least 10 years. If you aren’t eligible for free Part A, it can be purchased.
Part B (Medical Insurance)
Helps cover doctors’ and other health care providers’ services, outpatient care, durable medical equipment and some home health care. Includes some preventative services to help maintain your health and to keep certain illnesses from getting worse. Part B also covers approx. 80% of costs – and here again you have the option to purchase a supplement or choose a Medicare Advantage program to help limit your out of pocket costs. You must pay a monthly premium for Part B.
An advantage of Original Medicare (Parts A & B) is that you can choose any provider in the US who accepts Medicare and you are not limited to a specific doctor (like HMO) or geographic region. A disadvantage could be the co-insurance amounts that are associated with Original Medicare. If you have a major illness, 20% could be a large amount.
Part C (also known as Medicare Advantage)
Offers health plan options run by Medicare-approved private insurance companies. Medicare Advantage Plans are a way to get the benefits and services covered under Part A and Part B. Most Medicare Advantage Plans also cover Medicare prescription drug coverage (Part D). It is important to note with these plans that many are HMO and you must select a preferred provider and get referrals to see a specialist. There are a few PPO Medicare Advantage plans, but again it is important to stay within the plans network of providers. There are plans with $0 premiums and others with modest premiums. These plans will help you limit your out-of-pocket costs in any given year with predictable co-pays.
You must continue to pay your Part B premium, even if you sign up for a Medicare Advantage plan.
Part D (Medicare Prescription Drug Coverage)
Helps cover the cost of prescription drugs (generally not covered under Original Medicare) and may help lower your prescription drug costs with known, negotiated drug costs. Part D plans are run by Medicare-approved private insurance companies. Part D plans are usually purchased by those with Original Medicare (Parts A & B), often in conjunction with a Medicare Supplement.
Medicare Supplements
Helps pay for health care costs not covered by Original Medicare (Parts A & B). This is a good option for those who want the freedom to see any Medicare approved health care professional and want protection against the unknown coinsurance amounts that can be associated with Original Medicare. There are several plan options that are offered by all carriers that do supplements. While the plan structures are the same from carrier to carrier, the costs may differ. There is a known monthly premium for supplement plans.
The best time to sign-up for a Medicare Supplement plans is when you are first eligible (within 6 months of turning 65 and enrolled in Part B). During the initial eligibility period there is guaranteed issue – meaning you cannot be turned down regardless of your medical history. After the initial eligibility period, your health history will be reviewed to see if you’re eligible for the plan you selected.
When to sign-up
There are many rules with regards to eligibility periods. Initially is important to review your options when you are approaching your 65th birthday. Your initial enrollment period is for three months before your birthday month, your birthday month and the three months after your 65th birthday. There are penalties for signing up for Part B and D late (if you don’t have other coverage such as employer sponsored health coverage).
In addition to your initial enrollment period there are several special timeframes – but the Annual Enrollment Period is always a good time to make changes from Original Medicare to a Medicare Advantage Plan (or vice versa).
It can get complicated! There are many rules and exceptions…this is just a brief primer here. If you’d like to learn more please don’t hesitate to call us. We are authorized to represent a full line of Medicare products from Medicare Supplements, Drug Plans and Medicare Advantage products.
Sansevieri Insurance Services
949-722-6078
