Missing deadlines, delaying enrollment or choosing the wrong
plans can cost you money
by Dena Bunis, AARP,
July 1, 2019
En español | Choosing the best Medicare
options that will work best for you can be complicated. Looking at the
possibilities through the following four categories can help you make the best
decision.
The Medicare
Rights Center, a nonpartisan, not-for-profit consumer service
organization, shared with AARP its list of 10 common mistakes new Medicare
enrollees make.
1. Not signing up for Medicare at the right time
Timing, as they say, is everything. It’s
especially important when it comes to enrolling in Medicare. As you approach
65, you’ll want to enroll during what the government calls your initial
enrollment period (IEP). This seven-month period goes from three months before
the month in which you turn 65 until three months after.
If you don’t sign up during your IEP, you will
get another chance to enroll during Medicare’s annual general
enrollment period, from Jan. 1 through March 31 of each year. However, if
you enroll at that time, your coverage won’t begin until July. And, because you
enrolled late, your monthly premiums for Medicare Part B — which covers your
doctor visits and other outpatient services — will likely cost you more.
2. Confusion about the special enrollment period
If you are 65 or older, when you stop working
and lose your health insurance coverage or when the insurance you have through
your spouse ends, you’ll need to sign up for Medicare. Medicare has created
a special enrollment period (SEP) that lets you do that
without facing a late enrollment penalty.
Again, timing is everything. What many people
don’t realize is that you can only use this SEP either while you are covered by
job-based insurance or for eight months after you no longer have job-based
insurance.
Note: Medicare does not count retiree health insurance or COBRA
as job-based coverage. So, if that’s the insurance you have, you’ll need to
reread mistake No. 1 and sign up when you turn 65 or face that late enrollment
penalty.
Mistakes at a Glance
1. Missing the enrollment window
2. Not knowing when the sign up occurs
3. Misunderstanding your job’s insurance
4. Ignoring late enrollment penalties
5. Not fully weighing your options
6. Delaying a Medigap buy
7. Not understanding your out-of-pocket costs
8. Picking a plan that doesn’t have your doctors
9. Taking a drug plan that doesn’t meet your
needs
10. Assuming you can’t afford Medicare
3. Delaying enrollment when your job insurance is second in line
Even when you have job-based insurance, some
employers, depending on their size, can designate Medicare as your primary
health coverage when you turn 65. And if you have retiree coverage or COBRA,
those are considered secondary coverage.
If your job-based or other private insurance
is considered secondary coverage, it will only pay for a medical claim after
Medicare has paid its share. So, if your job-related insurance becomes your
secondary coverage, it’s important to sign up for Medicare. If your job-based
insurance is primary, then Medicare becomes your secondary coverage.
The way to find out if your job-based
insurance is considered primary or secondary is to ask your benefits manager or
human resources department or seek help from 800-MEDICARE.
4. Not understanding Part B and Part D late enrollment penalties
For every 12 months you delay enrolling in
Part B, your monthly Part B premium may be 10 percent higher. The penalty won’t
apply if you have job-based insurance or are still under your special
enrollment period.
For every 12 months you delay signing up for a
Part D plan, your monthly premium may be 1 percent higher. Part D plans cover
prescription drug costs. You won’t have to pay the Part D penalty if you can
show Medicare that you have drug coverage as good as that provided by a
Medicare Part D plan.
You should receive a letter from your employer
— or insurance plan — in September of each year letting you know if you have
drug coverage comparable to a Part D plan. If you lose your drug coverage,
you’ll be eligible for a two-month special enrollment period, during which you
can sign up for a Part D plan without a penalty. But keep that letter so you
can show Medicare you did have Part D-comparable prescription drug coverage
when the time comes to enroll in Part D.
Note: Usually, these penalties last for as long as you have
Medicare. But if you are paying this penalty and qualify for and enroll in a
Medicare Savings Program or the Extra Help program — which helps low-income
older adults pay for Medicare out-of-pocket costs — you will no longer have to
pay the penalty.
5. Not fully comparing original Medicare with Medicare Advantage
plans
If you are eligible for Medicare, you have a
choice to receive your benefits through original Medicare or a Medicare
Advantage plan. The type of Medicare coverage you choose depends on factors
such as your health care needs, the insurance your doctors accept, where you
live, whether you travel often and your financial situation.
Original Medicare is the traditional program offered directly
through the federal government. It comprises Part A, which covers hospital
costs, and Part B, which covers doctor visits and other outpatient services.
The vast majority of doctors in the country take this insurance. To help pay
for your out-of-pocket costs, you can buy a Medigap policy, which has its own
separate monthly premium. Original Medicare does not include Part D
(prescription drug coverage), so you must sign up for a stand-alone Part D plan
if you do not have other drug coverage. Original Medicare does not have a limit
on your annual out-of-pocket costs.
Medicare Advantage is a private insurance alternative to
original Medicare. These plans provide Part A, Part B and usually Part D
benefits. They may also offer certain benefits that original Medicare does not
cover, such as dental or vision care, and they may also have different costs
and rules than original Medicare. For example, an MA plan can require you to
get a referral from a primary care physician before it will cover care from a
specialist. And Medicare Advantage plans generally have a network of providers
in your geographic area and may not cover care if you see an out-of-network
provider (except in emergencies). MA plans have an annual out-of-pocket limit,
and you cannot buy a Medigap policy when you are enrolled in Medicare
Advantage.
6. Delaying buying a Medigap policy
Medigaps are supplemental health insurance
policies that work with original Medicare. If you have a Medigap policy, it
pays part or some of the out-of-pocket costs that Medicare doesn’t cover, such
as your Part A hospital deductible or the 20 percent coinsurance in Part B.
Depending on where you live, you can choose from as many as 10 different
Medigap plans. Each policy has a different letter name (for example, Plan A)
and offers a different set of standardized benefits. Policies with the same
letter name offer the same benefits, but premiums can vary from company to
company.
The best time to buy a Medigap policy is
during your Medigap open enrollment period. That six-month window starts when
you are 65 years old and have enrolled in Medicare Part B. It’s important to
enroll then because during that time the insurance companies that sell Medigap
policies cannot deny you coverage if you have a preexisting condition, and they
have to sell you a plan at the best available rate. If you try to buy a plan
outside of this window, companies may refuse to sell you a policy or may deny
you coverage for your existing health problems.
Some states have their own rules governing
Medigap policies, so if you made this mistake and didn’t sign up during your
enrollment period, check with your State Health Insurance Assistance
Program (SHIP) at www.shiptacenter.org to
ask about state-specific Medigap rights.
7. Not understanding your out-of-pocket costs
Although Medicare pays the lion’s share of the
medical costs for its enrollees, you need to be prepared for sometimes
substantial out-of-pocket costs. Here’s a rundown:
·
Premium: Each part of Medicare may have its own
monthly premium. Most people have no premium for Part A, which covers hospital
services. You will be responsible for the Part B premium, which if you are
collecting Social Security will be deducted from your monthly benefit. If you
enroll in a Medicare Advantage (MA) plan or a Part D plan, you may also owe a
monthly premium, depending on the plan you select.
·
Deductible: Before Medicare starts paying for the
cost of your care, you may have to pay a flat amount, called a deductible.
Parts A and B in original Medicare have annual deductibles, and some MA and
Part D prescription drug plans also have deductibles. Medicare supplemental —
or Medigap — policies often cover original Medicare deductibles.
·
Copayment: This is a fixed amount you pay for
specific services. For example, under MA plans you may have a copay — usually
around $25 — every time you see a doctor or get another medical service.
·
Coinsurance: This is where your plan will charge you
a percentage of the cost of a medical visit or service. If you have original
Medicare, you will owe 20 percent of the cost of the service. So, if you get a
blood test that costs $100, Medicare will pay $80 and you’ll be responsible for
$20. Medigap policies also usually cover your 20 percent share.
Note: If you have original Medicare, you should make sure the health
provider you see accepts Medicare and takes what is called assignment. That
means the provider is willing to accept the amount of payment on Medicare’s fee
schedule for the service they perform. If you see nonparticipating providers,
they can charge you up to 15 percent more than Medicare’s approved rate. If you
have an MA plan, you should try to go to a network provider because some MA
plans won’t cover out-of-network care at all and others will pay less if you go
out of network.
8. Choosing a Medicare Advantage plan that doesn’t include your
health care providers
Each type of Medicare Advantage plan has
different network rules. Most plans are either health maintenance organizations
(HMOs), which often require referrals to specialists and rely on primary care
physicians to coordinate a patient’s care, or preferred provider organizations
(PPOs), which have networks of doctors, hospitals and medical facilities that
contract with a plan to provide services. Your costs are typically lowest when
you use in-network providers and facilities, regardless of your plan.
If you decide to enroll in an MA plan, check
with your providers to learn which plans they accept. If you have questions,
contact your plan for more information. If your providers are not in the plan’s
network, check to see how much, if anything, the plan will pay for their
services.
9. Choosing prescription drug coverage that doesn’t fully and
affordably cover your medicines
Whether you’re planning to get your
prescriptions covered through a stand-alone Part D plan or under a Medicare
Advantage plan, take some time to learn about the rules, what drugs are covered
and what your costs will be.
Make sure your plan covers your needed drugs.
Each Part D plan has a list of covered drugs, called a formulary. If your drug
is not on your plan’s formulary, you may have to request an exception, pay out
of pocket for the cost, or file an appeal.
Also find out whether your plan places any
restrictions (sometimes called utilization management strategies) on coverage.
Some plans may place a restriction on a certain drug, but others may not. One
restriction might be requiring you to get prior approval from the plan before
it will pay for a particular drug. Another example of a coverage restriction is
step therapy, which means your plan requires you to try other, less expensive
drugs before it will cover a more expensive medicine that you may need.
You should also take a look at whether the
plan you’re considering will give you a good deal at the pharmacy of your
choice — or through mail order. Each Part D plan has a network of pharmacies
that include both preferred and non-preferred pharmacies. You typically pay
less for your prescriptions at preferred pharmacies.
10. Assuming you can’t afford Medicare
If you have a limited income, you may be able
to get assistance with your health costs through certain programs.
Medicare Savings Programs (MSPs) help pay the monthly Part B premium and may
help with Medicare cost sharing, depending on the program (there are three
types of MSPs). Contact your SHIP at www.shiptacenter.org to
learn if you are eligible for an MSP.
Extra Help is a federal program that helps pay for some to most of
the costs of Medicare Part D prescription drug coverage. Contact the Social
Security Administration at 800-772-1213 or visit www.ssa.gov to
learn if you are eligible for Extra Help and to start an application.
State Pharmaceutical Assistance Programs
(SPAPs) are offered in
some states to help eligible individuals pay for prescriptions. Contact your
SHIP at www.shiptacenter.org to learn if there is an SPAP in your state.
No comments:
Post a Comment