If you are over 65 and have Medicare, there are a few things you may not know about the program. One is how you can get locked into Part C (Medicare Advantage, the HMO version of Medicare) and the other about out of pocket costs with the Supplemental (MediGap) plans. Since Open Enrollment starts October 15th, it’s not too early to start thinking about your choices.
When you turn 65, if you are eligible for Medicare, you have three basic choices for your medical care (Part D is a separate program for prescription drugs): 1) Stay with what is called “Original Medicare” (Parts A and B and choose a prescription drug plan, Part D separately), which will cover about 80% of your costs; 2) Enroll in original Medicare plus a Supplemental (“MediGap”) Plan to fill in the other 20%; or 3) Enroll in Part C, the HMO Medicare Advantage plan which covers Parts A, B and D. In Part C, the government pays the health plan a lump sum to take care of you. If you do well and don’t need many services, the HMO may make a profit. However, if you use a lot of services, the HMO may lose money. It should be to the benefit of the health plan to keep you healthy and provide you with as much preventive and maintenance care as possible. At least, that’s the theory. Many Medicare Advantage plans actually have attractive features like zero monthly premiums and offer services such as gyms, vision screening, and dental care. MA plans also generally include prescription drug coverage.
However, before you choose a Part C Medicare Advantage plan, be pretty sure you want to stay with that plan for a long time. Changing back to original Medicare plus a MediGap plan after the first year may cause you to have your pre-existing conditions considered in the pricing. This practice is called “underwriting,” allowing the insurance company to price your premium in relation to your health status. There are some complicated rules about when you can enroll, disenroll, and switch choices. Use the Medicare website to provide you accurate information about changing options or call the Center for Health Care Rights or the HICAP program in your area. These are nonprofits that can give you independent information. They don’t sell insurance!
When we first enrolled in Medicare, my husband and I selected a Part C Medicare Advantage plan in our County. The first few years were great. We were seeing our same doctors, had zero premiums, and no claims to submit. But then the MA plan left our County and we realized that we had to consider other options. If our plan had not left town, and if we had wanted to switch to a MediGap plan, we had no idea our costs might have gone up to take our health status into account. There was some significant “small print” we did not know about.
We chose to return to Original Medicare with a MediGap plan, at that time offered through United Healthcare/AARP. Now we were faced with choosing one of the A-N Gap Plans! This is a great comparison chart from the Medicare.Gov website to show the differences among these plans. It’s easy to see that the more that is covered, the higher your monthly premiums will be, so Plans K and L, which cover 50% or 75% of some of your costs might seem too skimpy. Yet, Plans K and L are the ONLY MediGap plans that have a limit on your Out of Pocket costs! The other plans may seem to cover 100%, but if the charge is disallowed by Medicare or not considered “medically necessary,” you can be left with some significant out of pocket costs. Plan options K and L guarantee that after you have paid your Part B Deductible and reached these annual out of pocket limits ($2780 for Plan L and $5560 for Plan K), the plan will cover 100% of any remaining costs. Although we knew we would pay more during the year for 75% coverage, we decided that protecting ourselves against large out of pocket costs was, in the end, worth it.
I am not promoting any one of these options. The choice is yours. The only message here is to read the fine print! There are many websites that will help you navigate and examine all the issues. I recommend the ones that are sponsored by Medicare or a nonprofit organization. Once you have made your choice, however, plan to stick with it for a long time.