Medicare Mania: Some Basics to Know During Open Enrollment

Medicare season 2020 is probably going to go down as the most confusing Medicare season in U.S. history. I’ve been inundated with correspondence from people asking for guidance. The Open Enrollment period ends on Dec. 7, so you still have some time to examine what is best for you.

You are hearing a lot about Medicare Advantage plans (Part C) these days. Although they came on the scene in 1997, they now account for one-third of the Medicare market. In 2020, 24.1 million people out of 67.7 million Medicare beneficiaries overall are enrolled in Medicare Advantage plans.

I think that the increase has been fueled by the messages that are broadcast via multiple media channels. This media blast is supported by companies selling Medicare Advantage Plans. You, as the consumer, have to look at each of these closely, because benefits can vary for each plan.

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A Simple Look at Medicare

Simple and Medicare don’t seem like words that go together, but I’ll try.

There are several different parts of Medicare:

Part A

This is provided by the federal government. It helps pay for inpatient hospital stays, skilled nursing facilities (but not most long-term care), home health care, hospice and some other costs. There is a deductible for each new hospital or nursing home stay. This is important because if you are rehospitalized within 60 days, you don’t need to pay another deductible.

Part B

This is also provided by the federal government. It pays for doctors, outpatient care, physical and occupational therapy, lab work, mental health services, etc. There is a deductible that will apply. It’s important to note that you pay a Part B premium if you want this coverage. You will then have Part A and B. If you want an Advantage Plan you have to have both Part A and B.

The standard monthly premium for Part B is $144.60 for 2020 (rising to $148.50 in 2021). The annual deductible for Part B is $198 in 2020 and will be $203 in 2021.

Together, Medicare Part A and Part B are called Original Medicare. Those who have Original Medicare can buy additional coverage called a Medigap policy from a private company. These policies help pay health care costs not covered by Original Medicare, such as co-payments, deductibles and health care when you travel outside the U.S. But they typically don’t pay for everything, including long-term care, dental, vision and prescription drugs.

Part C

Part C is supplied by private health insurance company plans and includes all of your Medicare-covered benefits in Part A and B. Basically, Part C plans are the Medicare Advantage Plans.

Part C can also include the prescription drug coverage provided by Part D. The plans and their costs vary and generally offer extra benefits beyond Medicare.

Again, it’s time to pause and really examine all of the benefits offered by the Advantage Plans before signing up. Weigh all of the benefits and costs and really think about what you may need in the future. Keep in mind that these plans typically require you to use doctors in their networks and service areas, and you can’t buy a Medigap plan to cover any costs the Advantage Plan does not.

Part D

The prescription drug coverage offered in Medicare Part D is bought through private health insurance company plans. There can be either stand-alone prescription drug plans, or these can be included in Medicare Advantage plans.

Who is eligible for Medicare?

If you are turning 65, it’s time to find out about your Medicare benefits. Social Security will notify you about your Medicare benefits when you turn 65 and sign you up if you are currently receiving Social Security benefits. But don’t wait until the last minute to find out about the plan that is right for you. You get a seven-month window to enroll. Sign up online via socialsecurity.gov or by calling Social Security at 800-772-1213 or visiting a Social Security office and making an appointment to speak to a professional.

You can decline Part B coverage when you are first eligible, but there’s a catch: If you change your mind and want to sign up later, there will be penalties. If you sign up for Medicare during your initial enrollment window this will ensure that you have coverage in place and can use it when you need it. I don’t want to scare you, but if you don’t sign up on time, you can risk paying lifelong surcharges on your Part B premiums. It could be a 10% increase in the monthly premium for each 12-month period that you were eligible to enroll but didn’t.

It’s important to note that you can sign up for Medicare even if you already have other health coverage. If you are working and have health insurance, you don’t have to sign up for Medicare right away, but you can use Medicare as a secondary insurance. Just do it!

I am a proponent of working with a professional insurance agent who specializes in Medicare supplemental programs to help explain your options, costs and benefits. It’s not easy.

The Medicare Down-Low

I reached out to speak with Linda Goodwin, a Medicare expert and author of the booklet Solving the Puzzle of Medicare (available at www.myhelpsolutions.com). I asked Goodwin to explain some of the scary TV ads airing during Open Enrollment.

Goodwin said: “The ads on television are delivering a message to those new to Medicare that Part C Medicare Advantage is superior to Original Medicare. The other thing that often happens is when you call Medicare for more information you may start to receive calls from Advantage Plan companies trying to sell their plans. Is this a coincidence, or has your information been supplied by Medicare to other companies?

“It is important to note that when you are first eligible for Medicare and a Medicare insurance supplement you are guaranteed coverage and cannot be denied coverage for a period of three months before your 65th birthday and three months after your birth month.”

So, What Should Your Takeaway Be?

• If you are about to celebrate your 65th birthday, sign up for Medicare.
• Don’t listen to the ads in the media. Do your own research to make the right decision for yourself.
• Seek professional help to know your options, costs and benefits.
• If you have an Advantage Plan for less than a year and want to return to Original Medicare, you can. You are eligible for this during the Medicare Advantage Open Enrollment Period (OEP) from Jan. 1 through March 31.
• Plan a big 65th socially distanced birthday party!