Preparing for Medicare Open Season

It’s almost time to review your Medicare options. The time to make changes in some of your coverage is from Nov. 15 through the end of the year, so this is a good time to review all your Part B, C, D, and Medigap plan choices. You’ll be able to review your options before Nov. 15 either on the Medicare web site (www.medicare.gov) or through its telephone line. We don’t know when the 2011 options will be posted, so check the web site periodically.

The new health care law will make plan terms more volatile this year and the next few years than in the recent past. As we’ve discussed in past visits, Medicare Advantage plans are in for dramatic changes in 2011 and future years. You’re likely to see a combination of reduced covered services, premium increases, and increased deductibles and copayments. In addition to the effects of the new law, plans will make changes based on medical cost changes and their claims experience.

Here’s a rundown of the important information and deadlines for the different options.

Part A: This is the hospitalization program. People who are eligible for Social Security retirement benefits generally are eligible. There is no premium, and you are automatically enrolled on the first day of the month you turn 65 when you are receiving Social Security benefits. When you aren’t receiving SS benefits but are eligible, you need to contact the Social Security administration three months before your 65th birthday. There aren’t any plan choices in Part A, so there aren’t any decisions to make after enrolling.

Part B: This is traditional Medicare and is optional. It is a fee-for-service program. You pick your doctors and treatment, and Medicare reimburses for covered services. There is a monthly premium plus deductibles and copayments. Part B is run by Medicare (actually administration is contracted to insurers), and there is only one program.

Again you’re automatically enrolled the first day of the month you turn 65 when you are receiving SS benefits. When you aren’t receiving benefits and want to enroll, you sign up during the seven months from three months before your 65th birthday month to three months after that month. There also is an annual enrollment period from Jan. 1 through March 31, but you’ll pay a higher premium for life when you missed your initial enrollment period and sign up during a subsequent annual enrollment period.

Part C: This is the alternative to Part B and is composed of Medicare Advantage plans. Technically you enroll in Part B and then choose a Part C plan. Either you or the Part C plan provider continues to pay the Part B premiums. The initial enrollment rules for Part C are the same as for Part B.

In addition, there is the annual enrollment period from Nov. 15 through Dec. 31. During this period you can switch from one Part C plan to another, switch from Part B to Part C, or switch from Part C to Part B. Coverage under your choices begins the following Jan. 1. People who missed their initial enrollment period for Part C may enroll during this period.

There also is a General Enrollment Period for Part C from Jan. 1 through March 31. Coverage you select during this period is effective July 1.

Part D: Part D plans cover prescription drugs. You don’t have to sign up for a Part D plan, but if you don’t enroll when you are first eligible you’ll pay higher premiums if you eventually join one. Part D plans are offered by private insurers but are reviewed, approved, and monitored by Medicare. You can’t enroll in a Part D plan when you are in a Part C plan, because Part C plans have prescription drug coverage.

You are first eligible for Part D the same time you are eligible for Parts B and C, and the enrollment period is the same seven months in which your birthday is in the middle. You also can join or switch a plan during the annual enrollment period from Nov. 15 through Dec. 31.

Medigap plans: Medicare supplement plans (Medigap plans) cover some items not covered by traditional Medicare. There are 11 standardized Medigap policies (see our June 2010 visit). You choose the one with the combination of coverage and cost that suits you. Medigap policies are only for those who are enrolled in traditional Medicare.

You’re guaranteed to be able to buy a Medigap policy during the six months beginning on the first day of the month you are both 65 or older and enrolled in Part B. (Your state may have other eligibility rules.) You also can purchase a policy any time after that, but you won’t be guaranteed to be able to buy a policy. You can change Medigap policies any time you want but aren’t guaranteed to be able to buy a different one.

The upcoming enrollment season means a lot of advertising for the different plans. Prepare for the enrollment season. When you’re in a Medicare Advantage plan, expect changes in your plan and to spend time studying the alternatives.

Review the alternative plans in your area through Medicare’s web site or telephone line. Decide whether you want to be in traditional Medicare or Part C. When you want traditional Medicare, review the choices for Part D prescription drug coverage and Medicare Supplement plans. Decide on the combination of cost and benefits that suits you.

RW October 2010