Ten thousand Baby Boomers turn 65 every day and are faced with making a decision of what Medicare option to select from many choices.
In addition, Medicare’s annual open enrollment runs from October 15th to December 7th. During this time, existing Medicare subscribers can join or change:
- Medicare Advantage plans:
- Return to the original Medicare coverage
- Medicare Supplemental (Medigap) plans;
- Part D Prescription Drug plan
It is very important to make an informed choice of the best insurance plan for your medical needs, preferences and budget. A bad choice could cost you thousands of dollars and prevent you from receive services that you need from your preferred providers.
Medicare Insurance Options for Seniors
Original Medicare is the government run health plan for seniors and disabled people that uses private doctors, hospitals and other health care providers.
By comparison, Medicare Advantage (MA) plans, Prescription Drug plans (PDP) and Medicare Supplemental plans (Medigap) are all run by private insurance companies but are subsidized and regulated by Medicare.
These plans include a variety of large for-profits (eg. UnitedHealthcare, Humana, Aetna), national non-profit organizations such as Blue Cross and many regional non-profit insurers.
In addition, some individuals are eligible to receive their health insurance, as a retiree or spouse, through their current or former employer and others receive their health care and medications through the Veterans Administration.
Eight Costly Medicare Mistakes to Avoid
Your plan doesn’t include your preferred doctors, hospitals, pharmacy and other service providers.
If you don’t confirm with your preferred providers that they have a network contract with the insurer you are considering, you could be facing a huge bill. For example, in some Aetna and United Health Care plans, you could be responsible for paying up to 40% of the cost of expensive services from out-of-network providers.
Your plan’s coverage is too limited and costly for your needs.
Some plans that are sold, such as the Aetna Elite PPO ($0 premium plan), require that you pay the first $1,000 for many medical services and then pay up to 20% for future medical services. In addition, they require a $200 deductible for Tier 3-5 drugs.
While this plan is advertised as a zero premium, if you use a moderate amount of services and drugs, you could be paying up to the equivalent in $1,200/yr. in deductibles before your plan pays anything.
You should not focus solely on the advertised premium cost but rather your anticipated medical, drug and out-of-network needs and your projected total out-of-pocket expenses including premiums, deductibles, co-pays, out-of-network charges and drug costs.
Some regional plans such as Excellus Blue Cross and MVP limit your out-of-network coverage to $3,000 or less and you have to pay 30% of the cost of these services. If you have a serious medical condition that may need intensive treatment, and/or you travel for extended periods and would like the freedom to select specialty medical providers out of your plan’s network for your diagnosis and treatment, you’ll need adequate coverage at an affordable cost.
Medical services that you need are very costly and uncertain.
Most insurers have shifted significant risks and financial responsibility from their company to their subscribers. It is common that plans now expect that subscribers will pay 20% of the cost of many expensive medical services such as Diagnostic Radiology (eg. MRI, CAT, PET scans); Outpatient Surgery; Radiation Therapy; Chemotherapy and other infusions; Dialysis; Medical Equipment and Prosthetics. These treatments could cost you thousands of dollars in annual out-of-pocket expenses.
If this is a concern, you should consider a Medigap plan that will eliminate the uncertainties of high out-of-pocket expenses and give you the broadest nationwide provider options for one monthly premium. With a Medigap plan, you will also need a separate prescription drug plan, but you can generally find both plans for a total cost of under $250 a month in upstate New York. The availability of Medigap plans and their premiums vary significantly by insurer, state and county. Here’s a link to locate plans in your community: Medigap .
Prescription drugs that you need are not covered in your plan, or are too costly.
Each plan creates their own formulary of drugs that they will cover, restrict, exclude and charge their subscribers. Insurers have been successful in moving subscribers away from brand name drugs to use their “preferred” generics and brand-name drugs by restricting access and offering lower co-pays for their “preferred” medications.
Each insurer separates their covered medications into 5-6 groups or tiers and each tier has the same subscriber dollar or percentage monthly charge.
However, there are significant differences among plans including which drugs they cover, if they charge deductibles and the cost they charge the subscriber. Your drug expenses will also vary, based on if you use a network “preferred”, standard or mail order pharmacy and if your pharmacy is subject to out-of-network charges. This is especially true of high-cost brand name and specialty drugs.
Another trend is that more plans are adding drug deductibles of up to $400 a year. This means that your insurer is not paying anything for your medications until you have paid the first $400.
Medicare.gov has a very good Plan Finder feature that lets you enter your meds, preferred pharmacies and compare the plan’s total annual cost; what meds the plans cover, restricts and excludes; if there are deductibles, co-pays and restrictions; if there are generic equivalents; the cost of mail-order drugs and other network pharmacy options.
You are not receiving federal or state financial assistance that you need and are eligible to receive.
There are a number of federal and state financial assistance programs that help low to moderate-income seniors and disabled persons. These can help lower the cost of your Medicare Part B (outpatient) health care and Part D (medications) premiums and co-pays; energy bills; VA benefits; food; property tax exemptions; housing, in-home services and much more.
Check Up is an excellent, free service offered through the National Council on Aging that screens people for hundreds of programs and services in each community across the country. For more information go to benefitscheckup.org/
Medicare enrollment penalties
Medicare rules require that if you want to receive Medicare benefits, you need to enroll and pay your Medicare Part B (outpatient) and Part D (prescriptions) premiums when you are first eligible. There are a few penalty exceptions, for example if you receive creditable medical and drug insurance from you or your spouse’s employer, if you receive your medications from the VA.
Medicare penalties can be significant. The Part B (outpatient care) penalty is 10% for each year, from the date of your initial Part B eligibility. The Part D (prescription drugs) penalty is 1% for each month since you were initially eligible, or June 2006, the start of the program.
Your choice of plans is not based on your likely needs and costs for the coming year.
You can easily be under-insured for your needs or paying too much in premiums, deductibles and co-pays for the services that you are likely to use in the coming year.
Make sure you’re not staying in your current plan because: it’s easier than changing; a persuasive salesperson, repetitive TV ads or friends have influenced you; you’re attracted to a low premium and not the true full cost of the plan.
You need to have objective and factual information that compares the benefits, costs and value of your various Medicare options to your needs and budget.
If you need help, contact State Health Insurance Assistance Program (SHIP) 877-839-2675 for free assistance in your community
You’re not aware of your plan’s procedures for appealing the denial or restriction of services/medications and other quality of services issues.
All private Medicare Advantage and Medigap plans are required to have procedures for reviewing and responding to complaints and appeals of decisions that deny or restrict medical services and prescription drugs.
To avoid problems, you should first review the plan’s Summary of Benefits, Drug Formulary, Provider directory and Appeals and Grievance procedures. These procedures include both internal and external reviews and responses to your concerns.
To start the process, you should contact your plan’s customer care center at the number on your insurance card.
You can also engage your medical provider and name a representative to assist you with your concerns. Medicare monitors the nature and frequency of complaints and disenrollment of subscribers from plans. These are factors in Medicare’s rating of plan. For more information, go to Medicare Quality Star Ratings.
The Importance of Having a Good Medicare Plan
Selecting the best plan for you or your family member is a very important responsibility since the consequences can be significant, both to your pocketbook and your ability to receive needed health care from your preferred providers.
Investing time in planning and seeking objective advice in selecting a plan, can save you a lot of time, money and headaches.
Social Security Administration, socialsecurity.gov, 800-772-1213
The Social Security Administration is the agency that you need to contact to apply for your Social Security benefits and enroll in Medicare Part B and D. In addition you can be screened for eligibility (income and resources) and apply for “Extra Help” with your Part D premium and cost of your medications
Medicare, Medicare.gov – 800-633-4227
An excellent resource with Medicare information and specific help in comparing Medicare Advantage and Prescription Drug Plans in your area.
State Health Insurance Assistance Program SHIP 877-839-2675
Medicare contracts with states, counties and nonprofit organizations throughout the country to provide individuals with personalized education, support and assistance with Medicare.
These free services include comparative plan information, eligibility for financial assistance as well as help with selecting a Medicare plan, enrolling, and resolving problems.
Partnership for Prescription Assistance Partnership
This is an online information resource tool. You can learn about assistance programs that are available for specific medications, along with the eligibility criteria and program applications.
Medicare Rights Center, medicarerights.org , Helpline: 800-333-4114
The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.