At age 65, most people qualify for their Initial Enrollment period with Medicare. It’s during this time that you can buy a Medicare Supplement without having to answer health questions. Typically, you only get one Initial Enrollment period. It begins three months before the month of your Medicare eligibility and ends three months after the month of eligibility. The month of eligibility is the month of your 65th birthday, if you become eligible for Medicare because you are turning 65 years old.
The Initial Enrollment period is a great opportunity for people to get Medicare health insurance. That’s because, typically, insurance companies must use medical underwriting to determine whether to accept your application. However, if you enroll during your Initial Enrollment period, you can buy any Medicare Supplement policy (that’s available in your area) without having to answer health questions and insurers can’t deny issuance of your policy.
It’s important to note that people with Medicare, due to disability, will be eligible for a second Initial Enrollment period at age 65. The same way anyone else becoming eligible for Medicare, for the first time, qualifies at age 65.
In most cases, Medicare Supplements pay what Medicare doesn’t cover at the hospital and doctor’s office. However, Medicare Supplements do not cover the majority of prescription drugs.
For drug coverage, you should consider enrolling in a Medicare Prescription Drug plan. Also known as Part D, this is separate and voluntary insurance that may help lower your prescription drug out-of-pocket costs. As with Medicare Supplements, private insurance companies offer Part D drug plans.
Although Part D is deemed “voluntary”, there are consequences for not enrolling in a qualified drug plan when you first become eligible for Medicare. That penalty is about 32 cents per month for every month that you could have enrolled but didn’t. The penalty is a lifetime carry which often times surprises people.
It’s important to compare Medicare Supplement benefits and prices before you decide which plan is right for you. That’s because all Medicare Supplements are standardized which means the plans offered and the benefits in those plans are the same for all companies.
There can be big differences in the premiums that different insurance companies charge for exactly the same coverage. By shopping and comparing, you could save hundreds of dollars per year.
There is a free service that can help you choose wisely by providing you with a list of companies who offer the most coverage at the lowest price, in your area.
Last month I received a call from a woman concerned about her father’s UHC Medicare Advantage plan. A letter came in the mail informing her father of provider cuts, including his primary physician, which would be occurring shortly. UHC suggested her father find new providers, as most of his would be dropped. Upset and confused, this woman did not know what to do, and I suggested a Medicare Supplement versus finding another Medicare Advantage plan. Unfortunately, her father had only recently left the hospital, leaving him medically unqualified for the time being. Insurance carriers need only give 30 days notice to their beneficiaries, but for many this 30 day notice is not enough.
The father would be losing 8 of his doctors in the provider cut. By January 1st, he will not be able to afford any of his current providers.
After learning about this phenomenon, I began to research Medicare Advantage cuts for 2014, my thought being UHC had a reason for giving some doctors the boot.
I was right. Due to changes in government funding to Medicare Advantage plans, the company has taken measures to streamline their network of providers for solely MA plans. UHC Medicare Supplement policyholders will not be affected by these cuts.
The “Doctor Fix” is part of a ten-year plan to strip down the spending on Medicare Advantage plans by $156 billion. For those who have MA plans, you know that funding is already tight. While premiums will only increase slightly, there will be other cuts down the road for MA plans. These include new plans concerning provider payment. There is new legislation (well, new to me and you) that will stall doctor cuts for now, but will contain a new formula. This formula will be the method of which Medicare determines payment to individual providers. Doctor’s will be judged on multiple areas that are meant to assess provider quality. Currently, doctor’s make a flat rate on seeing patients and flat rates for different services they provide.
With less funding to their Medicare Advantage plans, UHC was “forced” to reorganize their provider network, which means the 14 million UHC Medicare Advantage beneficiaries might have to find new providers. In a news article from USA Today, Susan Jaffe of Kaiser Health News writes that Medicare officials are currently reviewing UHC provider networks, which might result in another reconfiguration, hopefully for the better. Jaffe also urges that “losing a doctor does not constitute an exception” to the special enrollment period. An enrollment period available for extraneous situations only. For example, moving from your network or the insurance carrier filing for bankruptcy are situations in which you would qualify for a special enrollment period outside of open enrollment.
Unfortunately, for many Americans, Part C is the only supplemental insurance they can afford. There are also many Medicare beneficiaries who are stuck with their Advantage plans due to health reasons. I wish I could say that I see these plans turning around in the future, but it doesn’t look promising. Hopefully things will change for the better.
As for those people who can afford to switch from your current Advantage plan, now might be a good time. Of course you will have to wait until the Annual Dis-enrollment Period (January 1st to February 14th for 2014).
Medicare Supplement plans are currently not going to be impacted by this legislation or the Affordable Healthcare Act– Medigap beneficiaries will be able to keep using current providers and their coverage will not change.