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Medicare Advantage Open Enrollment Begins January 1

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

Medicare Annual Enrollment Period ended Dec 7. But a new Open Enrollment begins Jan 1 for Advantage Plans. What is Medicare Part C (Medicare Advantage)? A Medicare Part C (Medicare Advantage) plan is offered by a private company that contracts with Medicare to provide Part A and Part B benefits and may offer coverage for additional services. When Medicare was created in 1965 (Original Medicare), it provided only two parts; Part A and Part B. Generally speaking, Part A is free to eligible recipients and helps pay for in-hospital care. Part B is optional and helps pay for regular medical care (e.g., doctor’s bills, X-rays, lab tests). Individuals who choose to enroll in Part B must pay a premium, a deductible, and co-payments. Original Medicare is a private fee-for-service (PFFS) plan, which means that beneficiaries can choose any doctor or specialist who accepts Medicare. Original Medicare is administered directly by the federal government, although claims and payments flow through private health insurance companies that act as intermediaries.

In 1997, Medicare Part C (originally called Medicare + Choice) became available to persons who are eligible for Part A and enrolled in Part B. Under Part C, private health insurance companies can contract with the federal government to offer Medicare benefits through their own policies. Insurance companies that do so are able to offer Medicare beneficiaries health coverage not only through PFFSs, but also through managed care plans (such as HMOs) and preferred provider organizations (PPOs). Insurance companies can offer Medicare recipients benefits that are not covered under Original Medicare, although a premium may be charged for the extra coverage. Further, managed care plans and PPOs can typically offer Medicare recipients benefits at a lower cost because enrollees can only get covered health care through the plan’s network of providers, allowing the insurance company to “manage” the costs. The result is that many Medicare beneficiaries (some plans are not available in all areas) have a wider array of health plan options from which they can choose, allowing them to obtain the best coverage they can get at a cost they can afford.

In 2010, health-reform legislation made several changes to Medicare Advantage plans, including eliminating subsidies paid to plans, changing open enrollment periods, and strengthening protections for beneficiaries. New to Medicare, you can generally enroll when you first become eligible (three months before the month you turn 65 until three months after the month you turn 65). However, once you’re enrolled in a Medicare Advantage plan, you can generally make changes to your plan only during certain time periods. Currently, one such period occurs from October 15 through December 7 of each year. During this time-period (referred to as open enrollment), you can select a new Medicare health plan and/or a Medicare prescription drug plan or make other changes to your coverage for the following year. If you’re enrolled in a Medicare Advantage plan as of January 1, you also have an opportunity to disenroll and return to Original Medicare with or without a prescription drug plan, or switch to a different Medicare Advantage plan with or without drug coverage between January 1 and March 31 (the General Enrollment Period). Other. When you enroll in any Medicare Advantage plan, you will still get all Original Medicare covered services, but you may also obtain extra benefits and services not offered by Original Medicare, and/or you may be able to reduce your out-of-pocket costs. The extra benefits and services you receive and/or the amount of money you save will depend on which Medicare Advantage plan you choose.

Most Medicare Advantage plans include Part D prescription drug coverage. Because out-of-pocket costs and the types of coverage offered will vary, it’s important to compare plans before choosing one. Because private insurance companies offer Medicare Advantage plans, they can change the extra benefits provided by the plan and decide (on an annual basis) whether they will continue participating in Medicare. Health care providers can also join or leave the plan at any time. Is Medicare Advantage right for you? Here are some questions to ask during the decision-making process:

• How much is the premium?
• Will you need to satisfy a deductible or pay co-payment or coinsurance costs? Medicare Advantage plans have an annual cap on how much you pay for Part A and Part B services. This will differ among plans.
• Does the plan cover the extra benefits or services you need (such as coverage for vision, hearing, dental, or health and wellness programs)? Does the plan offer prescription drug coverage (most Medicare Advantage plans do)?
• Do the health care providers you normally see participate in the plan? What if your Medicare Advantage plan leaves the Medicare program? You still have Medicare coverage. You can return to Original Medicare or join another Medicare Advantage plan if one is available where you live. Your options will be listed in the notification letter you are sent when your plan leaves the Medicare program.

Richard J. Schillig, CLU, ChFC, LUTCF is an Independent Insurance and Financial Advisor with RJS and Associates, Inc. He can be reached at (563) 332-2200.