Medicare 101

By: Melody Rabor-Dizon

 

Only because this is an integral part of my job, knowing benefits, coverage, deductibles, co-insurance, out of pocket costs, medicine expenses related to healthcare to our baby boom generation, it is a must for me that I educate my patients regarding what is covered and what is not and how to avoid Medicare blunders.

And only because, people are living and working longer, Medicare benefits change more than it needs to be. Certainly politics play a major role, current trends, staffing shortages or surplus, population growth due to baby boomer generation, value based care models and sustainability measures are what keeps our legislators on their toes. Here are tips on how to maximize benefits, avoid potential non covered items and lessen exposure to risks for non coverage. It turns out mistakes are most common in a benefi ciary’s first year of coverage. Instead of finding out on your own, keeping abreast with Medicare changes can certainly decrease anxiety, alleviate stress and not delay any treatments. Allow me to share with you my reads and experiences with patients hands on.

1. Assuming you’ll be auto-enrolled

While some people are auto-enrolled in Original Medicare Parts A and B at age 65, not everyone has that convenience. You are only auto-enrolled in Part A and Part B if you are taking Social Security benefits at least four months prior to your 65th birthday month. If you assume that you will be auto-enrolled in Part A and Part B just because you’re turning 65, you could be wrong. This error could result in a late enrollment, which in turn would cause you to pay a late penalty each month for the rest of your years. According to the Social Security Administration, if you are receiving any other kind of Social Security benefits than regular retirement benefits, you should contact your local Social Security office to see if you will be auto-enrolled in Medicare.

2. Not enrolling in Part B at age 65

People put off enrolling in Part B at 65 for various reasons, but the only valid reason to delay that will avoid a penalty is if you have creditable health insurance coverage that is primary to Medicare. If you continue to actively work past 65 for an employer that has more than 20 employees, and you have a group health plan through that employer, then you can delay Part B without gaining a late penalty. The same rule applies when you have insurance through an actively working spouse’s employer.

However, when you delay Part B enrollment past 65 for any other reason, you will likely gain a penalty. This late penalty is tacked onto your Part B premium once you fi nally enroll, and is a lifelong penalty based on how long you delayed your enrollment. The formula to calculate the late penalty is the Part B base premium times 10% times the number of years delayed. For example, if Judy delays Part B for three years past turning 65, and the Part B base premium for that year is $144.30, then her late penalty is 30%, or $43.29/month.

3. Not enrolling in Part D at age 65

Similar to Part B, you can be penalized for enrolling in Part D late unless you had some other form of creditable drug coverage. Some people delay enrolling in Part D because they don’t take any medications, and therefore feel they don’t need Part D. However, this could result in a costly mistake. Let’s look at a situation that actually happens to many people:

Tomas delays Part D simply because he doesn’t take any prescriptions. Two years later in February, Tomas gets diagnosed with a condition that requires expensive medications to treat. Now, he has to pay out of pocket for those medications for the rest of the year until he can enroll in a Part D plan. The primary time you can enroll in a Part D plan outside of your Initial Election Period (IEP) is during the Annual Election Period (AEP). The AEP doesn’t start until October 15th. And plans chosen during the AEP aren’t effective until January 1st. In this scenario, Tom would have to wait nearly a full year to gain any Medicare coverage for his medications. Fairly inexpensive Part D plans are offered in most zip codes. It’s better to be safe with a low-cost Part D plan than to be sorry later. You will also avoid the Part D late penalty by enrolling in any plan, even the most inexpensive one. Note that if you have creditable coverage for Part D, you won’t owe a late penalty. Examples of creditable coverage for Part D are employer coverage and VA drug coverage.

4. Enrolling in the wrong Part D Plan

Part D plans have formularies that list out the drugs that the plan covers. Medicare requires Part D plan formularies to include at least two drugs in each therapeutic class. This way, your doctor has at least two options when prescribing your medication. Before you research Part D plans, be sure to list out the medications you take. When enrolling in a Part D plan, the best-case scenario would be to fi nd a plan that covers all of your current medications. Take the list you made and check the drug plan’s formulary to see if it covers your most important medications. Then choose the drug plan that offers most or all of your specifi c medications for the lowest out-of-pocket expenditure. You can use Medicare’s Plan Finder Tool to do this.

5. Missing your Medicare Supplement open enrollment

You are only guaranteed one Medicare Supplement open enrollment period. A Medicare Supplement open enrollment period is the best time to apply for a Medicare Supplement plan because it’s the only time you are guaranteed enrollment. During a guaranteed enrollment period the carrier is not allowed to ask you health-related questions during your application. Your open enrollment period begins the day your Part B becomes effective, and continues for six months. For example, if your Part B starts on May 1st, then your open enrollment period would end on October 31st.

Looking for Medicare Supplemental Plans?

If you miss this period, you will most likely have to answer health questions when applying for a Medicare Supplement plan in most states. Based on your answers, the carrier could decline your application, leaving you without supplemental coverage.

6. Not enrolling in the most cost-effective plan for you

There are two main types of plans that you can enroll in addition to Part A and Part B. These types of plans are Medicare Supplement and Medicare Advantage. These two types of plans vary greatly from one another. Therefore, it’s important you research each type of plan and learn how they work, then decide which is most cost-effective for you. All of these factors can infl uence your decision. Be sure to study up on each type of plan so you can make an informed decision when it comes time to enroll. A few factors to consider when choosing the type of plan are how much you travel, how often you go to the doctor, whether you have any medical conditions, how much can you afford out-of-pocket each month.

7. Not verifying which Medicare Advantage plans your providers accept

One big difference between Medicare Supplement and Medicare Advantage plans is that Medicare Advantage plans have networks of participating providers. If you enroll in an Medicare Advantage plan before you verify that your doctors accept it, then you could end up having to change providers. To avoid this, verify with your doctors which plans they accept. You can confirm their participation in the plan’s directory so that you can be sure you are choosing a plan that will allow you to continue seeing your favorite providers.

Avoiding these Medicare mistakes can ensure a smooth transition into Medicare.

Happy Thanksgiving to all! God bless you.