Fall and winter don’t just bring cooler temperatures and the holidays – the final seasons of the year also mean open enrollment for Medicare. For most seniors in the United States, the period between Oct. 15 and Dec. 7 is the only time they can switch or make changes to their Medicare insurance plan.
“As people age, their health care needs evolve,” says Dawn Maroney, chief growth and strategy officer for Alignment Healthcare. “When that happens, they may find the Medicare plan they first chose when they became eligible no longer meets all their needs. This open enrollment period is their yearly opportunity to re-evaluate whether to continue with their plan or switch to another, with changes becoming effective the first of the new year.”
Most Americans are aware that Medicare is a government program designed to ensure people older than 65 have access to affordable health insurance. The program can also cover people younger than 65 who have certain disabilities.
The Medicare program has four parts, according to Medicare.gov: A, B, C and D.
Original Medicare versus Medicare Advantage
Most people think of Medicare parts A and B as Original Medicare, in which the government pays directly for the health care services received. People with Original Medicare can see any doctor and hospital that accepts Medicare in the country, without prior approval from Medicare or their primary care physician. Most people do not pay a monthly premium for Part A if they paid taxes while working; everyone pays a monthly premium for Part B, based on income. The standard premium for Part B in 2017 was $134 per month, which is deducted from the individual’s Social Security benefits.
Original Medicare pays for about 80 percent of the total costs of health care. The patient is responsible for the remaining 20 percent, which can mean high out-of-pocket costs in the event of a hospitalization or other events requiring significant medical attention. To offset the financial burden of that 20 percent, some people choose to purchase supplemental insurance, called Medigap.
Private insurance companies offer Medigap to cover things Medicare doesn’t, such as deductibles, co-pays and co-insurance – but, keep in mind, Medigap only supplements Original Medicare benefits. Further, if you do not apply for Medigap in the first six months of becoming eligible, there’s no guarantee that an insurance company will sell you a Medigap policy.
With Medicare Advantage, government-approved private companies administer health plans that cover everything Original Medicare does, but can do so with different rules, costs and restrictions that can change every year. For example, a private Medicare plan may require your physician to request permission before performing a procedure in order to be paid by the plan. Medicare Advantage plans, however, usually cover extras that Original Medicare does not, like dental care, vision services, hearing exams and gym memberships.
Most Medicare Advantage plans also include prescription drug coverage (Medicare Part D), which is not included in Original Medicare, at no additional cost. If you elect to enroll in a Medicare Advantage plan, you still have Medicare – this means that you must still pay your monthly premiums for parts A and B, in addition to a monthly premium for Part C, if applicable. Many Medicare Advantage plans are available for no additional monthly premium.