What do Halloween and Medicare Advantage Open Enrollment Periods have in common?

A. They both are spooky.

B. They happen at about the same time.

C. They leave many people in the dark.

D. Too much of either can make you sick.

E. All of the above.

The correct answer, of course, is:  E.   All of the above.

By the end of this brief post you will understand what a Medicare Advantage Open Enrollment Period is. We are currently in it. This year (enrollment for 2012) it runs from October 15 through December 7. You will also understand the differences between Medicaid Parts A, B, C and D and the importance of a Medigap policy.

First let’s take a look at what Medicare Advantage is and how it is different from “Original” Medicare. If you bear with me to the end, I’ll even mention a few neat tricks (or treats?).

Original Medicare

Medicare, as originally set-up and as it remains currently, has two principal parts (in fact, I read somewhere that Medicare was actually patterned after Blue Cross and Blue Shield). Part A provides hospital and other inpatient facility benefits . . . which is why it is called “Hospital Insurance” (imagine!). Part B covers other medical expenses (physician and other provider services, various diagnostic and screening services and durable medical equipment –like walkers and heavily advertised motorized chairs).

If you have the required work history you can signup for Medicare Part A and Part B (if it hasn’t been done automatically upon going on to Social Security) three months before the month of your sixty-fifth birthday, the month of the birthday, and three months following. If you are working and receiving group health benefits at work, you can delay signing up for Part B without a premium penalty for up to eight months after terminating employment. If you miss one of these sign up periods, be prepared to pay an extra 10% for every twelve month period you go without Part B. Take a look at a downloadable chart comparing the various sign-up periods on this site.

Part A is free (unless you didn’t have enough work credits for Social Security . . . but even then you can “buy-in” to Part A). Part B is not free. It costs $96.40 for most folks in 2011 ($99.90 in 2012). Part B premiums are more for others depending on income. And for the first time in a few years, premiums will go up in 2012.

Medicare expects you to chip in with coinsurance and deductibles. In fact, without extra help, the coinsurance and deductibles can get pricey (very). That is why, if you decide to go with “original Medicare” a good Medigap or Medicare supplemental policy is highly advisable (in fact, not purchasing a policy to save a few dollars is foolish). If you sign-up within six months of signing-up for Part B, the Medigap insurer must charge you the same premium it charges everyone else. If you wait too long, they can ask all sorts of nosey questions about your health and charge you accordingly. You may read more about Medigap insurance elsewhere on this site. We also have a great downloadable chart comparing the different types of Medigap plans (look at the second page).

Part C or Medicare Advantage

Congress decided to set up a mechanism to allow private insurers to join the Medicare party and provide coverage as an alternative to “Original Medicare.” Part C of Medicare provides for Medicare Advantage plans that are in lieu of Part A and Part B. The plans must provide all of the basic Medicare Part A and Part B services – but they can also offer other services that Original Medicare does not cover (perhaps dental, hearing aids, and other exotic benefits like gyms) – and they can (and do) charge various amounts for their plans. The federal government then pays the plans a fixed amount per plan participant. There are several delivery models to choose from (notably health maintenance organizations, preferred provider organizations, and private fee for service plans).

Medicare Advantage plans are gaining in popularity. I’m coming around, but I have been suspicious of them. Often folks sign-up beguiled by extra services only to discover they are paying more for the core services they really need.

Now this is really important: Some Medicare Advantage Plans offer a Part D drug benefit – but not all do. Understand what is being offered, because it could have serious consequences later if you decide to switch out of a Medicare Advantage Plan that doesn’t offer a drug benefit.

Generally, you can sign up for an Advantage plan when you first become eligible to sign-up for Medicare. Once in an Advantage plan you’re generally stuck with it until the next Open Enrollment Period although you can bail out of an Advantage plan anytime between January 1 and February 15 as long as you go back to original Medicare. If you had a Part D drug plan with your Advantage plan (discussed below) make sure you sign up for a new Part D plan when you make that switch. You will not have to wait to an Open Enrollment Period to make a switch if you move out of the coverage area, go on Medicaid.

Check out the downloadable chart illustrating the various Advantage plan sign-up periods as well as a discussion of the different types of Advantage plans.

No one may sell a Medigap policy to an Advantage plan enrollee. Remember, the idea behind Medicare Advantage is that it is all “bundled.”

Medicare Part D

Medicare Part D is the drug benefit that has been around a few years. This is the home of the famous “donut hole.” Like other Medicare plans you can sign-up in the seven month window beginning three calendar months before the month of your sixty-fifth birthday and ending three calendar months after the month of your sixty-fifth birthday.

Really important: Do NOT go more than 63 days during ANY period of time after you first become eligible for Medicare without being in a Part D plan or having other “creditable coverage.” If you do, you’ll pay a premium penalty of about $.32 for every month that you went without coverage when you try to sign-up again. If your other drug coverage is “creditable coverage” you’ll know – they have to tell you in writing if it is.

Generally speaking, if you’re in a Part D plan, you’ll be stuck with it until the next Open Enrollment Period rolls around, and at that time you can make changes effective for the first of the year. There are exceptions, however, in case you move out of the coverage area, lose other “creditable coverage” or move to a nursing home.

I have not left out Part D drug plans . . . you may download a Part D enrollment period chart on this site.

So Here We Are . . .

In the middle of the 2012 Open Enrollment Period. If you are happy with your coverage, ignore all the commercials. If you are in an Advantage plan and not very happy, or if you are in original Medicare and are thinking about an Advantage plan, then do some comparison shopping. Do not take the first sales pitch that comes along.

Here is a Neat Trick: Go to www.medicare.gov/find-a-plan for a great comparison shopping tool. It works for both Part C Advantage plans and for Part D drug plans. It is easy to use.

And Here is Another Neat Trick . . .

Beginning December 8, 2011, you can switch out of a Medicare Advantage Plan or Drug Plan anytime as long as you are switching to a 5-Star Plan. Medicare has begun collecting consumer health care provider input to rate plans. 5-Star Plans are the top of the heap. The idea is that the more lowly starred or unstarred plans will be a bit more customer friendly if they know you can walk at anytime. It will be interesting to see how that works.

In a nutshell:

• Part C Advantage Plans replace Original Medicare Part A and Part B.
• You may have either Parts A and B or Part C, but not both.
• If you stick with Original Medicare, you should stick with a good Medigap policy.
• If you drop (or fail to sign-up for) a Medigap plan anytime after you enrolled in Part B, you may have to pay more premiums based on your health (and may even be denied coverage).
• You may have a Part D drug plan with either Parts A and B or with Part C (although many Advantage plans have a drug plan “built in”).
• Do NOT go more than 63 days without a Part D drug plan or other “creditable coverage” if you want to avoid a penalty.

Download these handy charts (they’ll help you through the maze):

Part A and Part B Enrollment Calendar and Medigap Plan Type Grid

Part C (Medicare Advantage) Enrollment Calendar and Plan Type Grid

Part D Drug Plans Enrollment Calendar

DID YOU LIKE THIS ARTICLE? SIGN-UP FOR ELDER LAW UPDATE RIGHT HERE AND GET A GREAT, NEWSY NEWSLETTER EVERY MONTH. USEFUL INFO, INTERESTING READING, THE OCCASIONAL CHUCKLE.