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Guest Post by Christian Worstell The point of having insurance is to save money. And when it comes to Medicare, saving money isn’t just about what insurance plan you have. It’s about when you get it. Unfortunately, too many Medicare beneficiaries cost themselves money by not enrolling at the right time. Not only can this mistake create a gap in your coverage and leave you paying out-of-pocket until the matter is resolved, but it can also increase your premiums once you finally do get signed up. That’s right: Medicare imposes late fees on beneficiaries who miss various enrollment deadlines or don’t meet certain requirements. And it’s one of the less understood aspects of Medicare. Consider this statistic from an annual Medicare literacy survey: 80 percent of Medicare beneficiaries are unaware of the late enrollment penalty for Medicare Part D prescription drug plans. Let’s discuss the Part D late enrollment fee and, more importantly, how you can avoid paying it. What is the Medicare Part D Late Enrollment Penalty? Medicare Part D is the portion of Medicare that covers most prescription medications. Part D plans are sold by private insurance companies, and while having a Part D plan is technically optional, there can be consequences if you don’t have one or similar drug coverage. When most people become eligible for Medicare, they’re typically granted an Initial Enrollment Period (IEP). This seven-month enrollment period begins three months before you turn 65 years old, includes the month of your birthday, and continues for another three months. This seven-month period is typically your first opportunity to enroll in the various parts of Medicare. It also might be your last shot to enroll without paying any late fees. If you go 63 consecutive days without creditable drug coverage at any time after your Initial Enrollment Period is over, you will be on the hook for a late enrollment penalty if you choose to one day sign up for a Part D plan. Creditable drug coverage is any coverage that on average provides at least the same level of benefits as Medicare drug coverage. That can include drug coverage from an employer, union or nearly anything else, as long as the coverage pays at least as much on average as Medicare’s standard drug coverage. In other words, once your Initial Enrollment Period ends three months after you turn 65, you better have a plan in place (literally or at least figuratively). Because once the enrollment period closes, the clock starts ticking on the 63-day window for you to enroll in a Medicare Part D plan without a late enrollment penalty. You can also find yourself in the penalty box if you have creditable drug coverage, allow it to expire, and then go at least 63 days without replacing it. How much is the late fee? The Medicare Part D late enrollment penalty is 1 percent of the national base beneficiary premium for every month you were eligible for creditable drug coverage but did not have it. The national base beneficiary premium can be thought of as the “average” Part D premium. While it’s not technically the average premium, it’s a close approximate. The national base beneficiary premium for 2022 has been set at $33.37 per month. (The average Part D plan premium in 2022 is $33 per month.) The late enrollment penalty calculation is rounded to the nearest $0.10. So for 2022, the late enrollment penalty is 33 cents for every month you did not have creditable drug coverage. 33 cents? What’s the big deal? This is where the math gets interesting. The penalty is not just a one-time fee. You will have to pay the fee every month that you remain enrolled in Part D. That means if you are late to enroll in a Part D plan and then maintain Part D coverage for the next 20 years, you’ll be paying that late fee every single month for the next 20 years or more. Here are some other examples to consider: Let’s say you went four months without creditable drug coverage. Your monthly penalty is now 4% of the national base beneficiary premium, or $1.33 per month in 2022. Again, that may not sound like much, but over the course of the year, it comes out to $16. Over five years, you would have paid $80 in late enrollment fees. Over the course of 20 years, you’re throwing away $320. Now let’s say you went one full year without creditable drug coverage, which pushes your late fee to $4 per month in 2022. Paying that penalty for one year costs you $48. Over 10 years, it’s $480. And over the course of 20 years, you’ll be saying goodbye to $961. If you went three years without creditable drug coverage before finally enrolling in a Part D plan, your late penalty would equal $2,883 over the course of 20 years. That’s a seven-day cruise to the Bahamas that you just gifted to Uncle Sam. To make matters worse, the national base beneficiary premium typically changes every year. And the penalty you owe is not locked into the rate at which you first acquired your penalty. It’s tied into the current year’s rate. If the national base beneficiary premium goes up, so too does your penalty. One might argue that delaying your Part D enrollment could actually save you money. After all, if you go six months without paying any Part D premiums, the money saved will be more than the applied late fees. That may be true for a certain period of time. But eventually, those monthly late penalties will catch up to and surpass any money that you saved by not paying a premium for a short time. Plus, what happens if you are prescribed a medication during that time when you don’t have drug coverage? You can’t just suddenly sign up for a plan whenever you want. Most beneficiaries are limited to enrolling only during the Annual Enrollment Period each fall. If you were to get sick or injured and prescribed a medication in March, you’re out of luck for several months until the next AEP. And even then you must wait until January 1 for that coverage to take effect. Given the out-of-pocket cost for prescription drugs without insurance, is that a gamble you want to take? How do I avoid paying the Part D Late Enrollment Penalty? Some people who get saddled with Part D late enrollment penalties may do so because they aren’t taking any medications at the time of their Initial Enrollment Period. After all, if you don’t take any drugs, why would you bother signing up for an insurance plan that covers them? But the reality is that even if you aren’t taking any medications now, there’s a good chance you will be in the future. According to the Kaiser Family Foundation, almost 9 out of every 10 Americans aged 65 and over take at least one prescription drug. For comparison's sake, only three-quarters of those ages 50 to 64 take at least one medication, signaling that your odds of needing a prescription spike right around the time you’ll be signing up for Medicare. Most Medicare Advantage (Medicare Part C) plans include prescription drug coverage, and many plans are available for a $0 monthly premium. This means that even if you don’t take many prescription drugs now, signing up for a Medicare Advantage plan with drug coverage could come with minimal costs to you now and help protect you from potential Part D late enrollment penalties down the road. Make sure you have a plan in place for your Medicare drug coverage. And remember, timing is everything. Christian Worstell is a licensed insurance agent and a senior staff writer for MedicareAdvantage.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options. His work has been featured in outlets such as Forbes, Yahoo! Finance and The Washington Post, and he is a frequent contributor to health care and finance blogs. Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism. He currently lives in Raleigh, North Carolina.
Guest Post by Lindsay Malzone Medicare’s Fall Open Enrollment Period, also known as the Annual Enrollment Period (AEP), starts October 15 and ends December 7 each year. This is a chance for beneficiaries to make changes to their current coverage for the following year. If you or a loved one is a Medicare beneficiary, it helps to know a few things before this window begins. Changes you can make during the open enrollment period Simply put, AEP allows you to enroll, switch, or disenroll from Medicare Part C (Medicare Advantage) and Part D prescription drug plans. Benefits on both types of plan are subject to change annually. As a result, you could pay higher premiums, your doctor may leave your Advantage plan’s network, or your medication could be removed from the drug formulary on either a Part C or Part D plan. These are just a few reasons people switch or drop these plans. It’s important to understand that this enrollment window does not apply to Original Medicare (Parts A and B) or Medigap. Learn more about the parts of Medicare How to know what changes you want to make Each September, before the start of AEP, beneficiaries get an Annual Notice of Change (ANoC) letter in the mail from their insurance carrier. This letter outlines changes to your current policy for the following year. It explains in full detail changes to your benefits, premiums, and other costs, or to the plan’s service area. Once you get your letter, it’s helpful to contact a licensed agent to go over your policy. Beneficiaries enrolled in an Advantage plan should review their ANoC to ensure that their medications and dosages are still on the drug formulary and their practitioners are still in-network. Members of Advantage plans should also take note of maximum out-of-pocket costs and monthly premiums to make sure they’re still within their price range. View Medicare Advantage Plan Checklist Like Advantage plans, Part D plans inform beneficiaries of changes to their costs and formularies. View Prescription Drug Plan (Part D) Plan Checklist While reviewing your ANoC letter, it’s a good idea to consider any future doctor visits and procedures. This gives you a guesstimate about your potential out-of-pocket costs under your current plan. Keep an eye out for this letter and make sure your coverage will still be sufficient and affordable for the next year. If you don’t receive your ANoC letter by the end of September, contact your provider. Important things to remember The effective date for your new plan will be January 1 of the following year. No matter when you make your changes during AEP, your new coverage will be effective on January 1 of the following year. Your next opportunity to make all the same changes will be this same enrollment period, the following fall. The last change you make is the one that goes into effect. AEP gives you multiple chances to make changes to your Advantage or Part D coverage; however, the last change you make is the one that will become effective on January 1. You have until the last day of AEP to make your final decision. If you’re unhappy with your advantage plan, you have another chance to change it. It’s important to understand how each enrollment window works. If you’re not pleased with your Advantage plan, you have a three-month window to make changes. The Medicare Advantage Open Enrollment Period runs from January 1 through March 31. This enrollment period allows you to switch or disenroll from the Medicare Advantage plan you picked up during AEP. Unlike AEP, you can only make changes one time, so it’s important to weigh all your options before this window kicks off. Further, if you’re unhappy with the changes you made during the Medicare Advantage Open Enrollment Period, you’ll need to wait until AEP next year, unless you qualify for a Special Enrollment Period. Keep in mind that if you don’t already have a Medicare Advantage plan, you cannot enroll in a new one during the Medicare Advantage Open Enrollment Period. Stay alert next fall Regardless of whether you make changes to your coverage this year, you should check on your plan and ANoC every year to see if you’ll want to make changes during AEP. To recap, here’s a few things to take into consideration: Has my doctor been removed from my Advantage plan’s network of providers? Have my plan’s ratings changed? Do I plan on traveling next year? Are my annual medical costs expected to rise? Will my monthly premiums increase? Are my prescriptions still listed on my plan’s drug formulary? Before AEP begins, it’s best to understand your health needs, the changes you can make, and how this enrollment window works. If you have more questions about AEP, contact a licensed agent who can walk you through the entire process. Lindsay Malzone is the Medicare expert for MedicareFAQ. She has been working in Medicare since 2017. She is featured in many publications and has become the expert in the Medicare industry. Her passion is providing Medicare beneficiaries with the resources they need to make an educated decision on their healthcare needs and provide them the opportunity to learn about Medicare in a non-sales environment. You can also find her over on YouTube where she publishes Medicare-related video content regularly.
Guest Post by Cobi B. Gantz Given COVID’s continuing challenges, it can be hard to imagine traveling abroad now. However, if you are planning ahead for an upcoming trip and are on Medicare, it is important to note that the specific plan you are on can have a significant impact on the type of coverage you are eligible while traveling. What is Medicare? Medicare is the federal health insurance program that is designed for people who are 65 or older and qualifying younger people with disabilities. Those who qualify also include people who have End Stage Renal Disease. Medicare was first created in 1965 and is administered by the Centers for Medicare and Medicaid Services. Most people who are eligible for Medicare get their plans in two main ways — Original Medicare and Medicare Advantage. We have provided a quick overview below: Original Medicare includes Part A (hospital insurance) and Part B (medical insurance). Part A covers inpatient hospital stays. It also includes care in a skilled nursing facility, hospice care, and some home health care. Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services. A Medicare Supplement plan (Medigap) helps offset Original Medicare's out-of-pocket costs. People who choose original Medicare will often choose to obtain a separate Medicare drug plan (also known as Medicare Part D or a PDP) in order to ensure they have coverage for their prescription drugs. *Medicare Part D covers the cost of your prescription drugs. It is a federally created program and most people who opt for Original Medicare (Part A and B) also choose a Part D plan; however, it's optional. Medicare Advantage is also known as Medicare Part C. Medicare Advantage offers another way to get your Medicare benefits through private insurance companies. Many Medicare Advantage plans include prescription drug coverage as part of the plan. However, when it comes to travel, there are some limitations to note which we will address below. How do various Medicare plans impact travel coverage? As there are a number of Medicare coverage options, it is important to note whether the plan you are on includes coverage during your upcoming travel. If you’re planning to travel internationally after COVID subsides, consider getting expert advice from a licensed Medicare Advisor to confirm benefits during your trip. Medicare coverage and international travel Original Medicare does not cover health care while you’re traveling outside the United States. (The U.S. Virgin Islands, Puerto Rico, Guam, American Samoa, and the Northern Mariana Islands are considered part of the United States.) If you are traveling abroad and have a Medicare Supplement plan, you may receive some coverage. Plans C, D, E, F, G, H, I J, M, or N typically cover foreign travel emergency care if it begins during the first 60 days of your trip. These plans pay 80 percent of billed charges for certain medically necessary care after you meet a $250 yearly deductible. This benefit has a lifetime maximum of $50,000. Medicare Advantage Plans typically don’t cover care outside the United States. They also usually don’t cover non-emergency care you get outside of your plan’s network. However, these plans are required to cover any emergency and urgent care needs people have anywhere in the United States without imposing additional costs or coverage rules. Medicare coverage and domestic travel If you have a Medicare Advantage Plan, triple check coverage from state to state. These plans are required to cover emergency care in America but are not required to cover routine care. In some cases, you may be able to visit out-of-network providers but will have to pay more to see them. Your plan or a Medicare Advisor can help you to find an in-network provider in the area where you are traveling. People with a Medicare Supplement plan, also known as a Medigap plan, can receive care from any doctor nationwide who accepts Original Medicare. While most doctors accept Original Medicare and Medicare Supplement plans, some do not. Ask the doctor’s office or hospital staff before your appointment. Try to get your prescriptions ahead of your trip. Or, take the time to double-check that your destination (if based in the United States) has a pharmacy that has “preferred in-network” status with your drug plan to help reduce the cost of your co-pays. Before you plan travel, consult with a Medicare advisor in order to confirm your current plan includes coverage during your travel. Cobi B. Gantz is the CEO of Chapter, a Medicare Advisor company that offers Medicare education and assists with Medicare enrollment.
Guest Post by Lindsay Malzone Choosing a Medigap plan, also known as Medicare Supplement, can be confusing. From letter plans A–N, it can all go over your head. To help you through this process, we've broken down three steps to selecting the right plan for you. Medigap is not one-size-fits-all. Each plan has its own set of standardized benefits. Before purchasing a policy, it’s crucial to do your research. Evaluating your overall financial and healthcare needs can not only help save you money in the long run but get you the right coverage so you’re not scrambling when you need it most. Step 1: Set a monthly budget When setting a budget for what you’re comfortable spending per month on your healthcare premiums, it’s important to take into consideration both your current and future finances. If you choose coverage that meets your budget now, but might not in the future, you may not be able to switch plans due to pre-existing conditions. Remember, monthly premiums vary based on several factors, including your age, location, gender, and tobacco use. Spending more money now in monthly premiums could keep more money in your rainy-day fund. Step 2: Consider your current and future health If you are relatively healthy now, you may consider basic health coverage. This is where it gets tricky. You only get a once in a lifetime Medigap Open Enrollment Period. (Unless you’re under 65, then you get two.) Three months before you turn 65, your Initial Enrollment Period begins. This is when you can enroll in Part A, Part B, as well as Part D (prescription drug coverage). This is a seven-month window that ends three months after your birthday. Your Part B effective date is what initiates your once in a lifetime six-month Medigap Open Enrollment Period. This is when you can enroll in any Medigap plan without going through medical underwriting. Outside of this time frame you can still enroll in a Medigap plan at any time of the year, you’ll just have to answer health questions. Some pre-existing conditions can get your coverage denied. It's better to prepare for the worst now since pre-existing conditions can prevent you from getting the coverage you need in the future. Learn more about what each Medicare part covers, enrollment, and cost. Step 3: Compare Medigap letter plans A–N Once you’ve figured out your monthly budget and how extensive you want your coverage to be, you can begin comparing different letter plans. Medigap plans are lettered A–N. The core policy benefits found in Plan A are included in all letter plans. There are first-dollar coverage plans, high-deductible plans, and cost-sharing plans that come with copays. The higher the monthly premium, the less you pay out of pocket when you use the benefits. Below, we’ll discuss the most popular plans. Only those who were eligible for Medicare prior to 2020 are eligible to enroll in the only first-dollar coverage plan, Plan F. This is also the plan that will cost you the most in monthly premiums. If you’re looking for lower premiums without losing benefits, than the high-deductible version is a great alternative. Both options have been discontinued and are not available to new beneficiaries. The next best option, and plan that’s available to all beneficiaries, is Plan G. Outside of the monthly premium, you’re only responsible for paying the Part B deductible, which is $203 in 2021. The Part B deductible amount for 2022 will be announced by November. Plan G also comes with a high-deductible version. The last Medigap plan we’re going to mention is Plan N. This plan is considered a cost-sharing plan. In exchange for a lower monthly premium, you pay small copays when you visit your doctor or go to the hospital. You picked a Medigap plan, now what? This is where having a licensed Medicare agent on speed dial can be helpful. Beneficiaries don’t have access to tools that can compare Medigap plans in their state with all the carriers’ side by side. There are quoting tools out there that give you generic quotes, but not quotes tailored to you. Find an agent that doesn’t work for one carrier. You want an agent that works with multiple carriers and can give you non-biased expert advice. Medigap plans do not cover prescription medications that you pick up at your local pharmacy. That’s where Part D comes into play. Once you select a Medigap plan, your agent can also compare Part D plans in your area. Make sure to let your agent know what medications you’re taking. They will ensure they’re covered in your plans drug formulary. Lindsay Malzone is the Medicare expert for MedicareFAQ. She has been working in Medicare since 2017. She is featured in many publications and has become the expert in the Medicare industry. Her passion is providing Medicare beneficiaries with the resources they need to make an educated decision on their healthcare needs and provide them the opportunity to learn about Medicare in a non-sales environment. You can also find her over on YouTube where she publishes Medicare-related video content regularly.
Guest Post by Danielle Roberts If the thought of retirement ignites thoughts of leisure, liberty, and a chance to give your mind and body a break from the restraints of routine, join the club. Still, as you reach this stage of life, it becomes increasingly clear that there is a lot to learn before you make the leap into retirement. You must start making major life decisions that involve tax-advantageous retirement account withdrawals, Social Security distributions, and the big one — enrolling in Medicare. But really, how hard can it be? Whether you are on an employer health plan or have an individual ACA plan, your coverage through Medicare is an entirely different ball game. The enrollment periods, rules, and plan options that Medicare offers can make the transition process appear daunting. Good news — if you follow three steps, you will be on your way to reaping the benefits of a national healthcare system that you have likely been paying into your whole working life. Step 1: Sign up for Original Medicare Original Medicare consists of Medicare Part A and Part B. You’ll enroll in Original Medicare through the Social Security Administration (SSA). If you start taking Social Security benefits four or more months before turning 65 years old, you will be auto-enrolled in both Part A and Part B. In this case, your Original Medicare will start on the 1st of your 65th birthday month. If you are not yet receiving Social Security benefits, you will need to apply for Original Medicare. The earliest you can apply for Original Medicare is three months before the 1st day of your 65th birthday month. That day is the start of your Initial Enrollment Period (IEP) — this period lasts for a total of seven months, running an additional three months after your 65th birth month. Example If you turn 65 in June, your IEP starts March 1st and ends September 30th. During this time, you can apply for Original Medicare online at SSA’s website. If you do so during the first three months of your IEP, your Medicare will start on the 1st of your 65th birthday month. Apply any time after that but still during your IEP, and your coverage could be delayed one to three months. Failure to enroll in Original Medicare during your IEP could result in lifelong late penalties. However, if you plan to work past 65 for an employer who has 20 or more employees and plan to stay on their group health insurance, you will likely be able to delay signing up for Original Medicare beyond your IEP. Step 2: Pick a Medicare route There are two paths you can choose once enrolled in Medicare – Original Medicare or Medicare Advantage. Many Medicare beneficiaries choose the Original Medicare path. If you choose Original Medicare, you should consider enrolling in a Medicare Supplement plan to help offset the cost-sharing expenses such as deductibles and coinsurance. How to sign up for a Medicare Supplement Medicare Supplement plans (also known as Medigap plans) pay secondary to Original Medicare and cover things like your Part A deductible, Part A coinsurance, and Part B coinsurance. Without a Medigap plan, you will be responsible for all cost-sharing amounts Original Medicare throws your way, without any maximum out-of-pocket limit. Your Medigap Open Enrollment window will start the same day as your Medicare Part B effective date. This window lasts six months and is the best time to enroll in a Medigap plan as there are no health questions. In this time, you cannot be denied a Medigap plan due to pre-existing health conditions. After your Medigap Open Enrollment window has ended, you can still apply for a Medigap plan but will likely have to answer health questions. Medigap plans are labeled from A to N. These plans are standardized by Medicare so that regardless of the insurance carrier you go through, your coverage is the same. Example A Plan G offered by ABC Company for $199 per month will have the exact same coverage as Plan G offered by XYZ Company for $129 per month. These plans are sold by private insurance carriers but always standardized by Medicare. Once you have determined which letter plan is the right fit for you, find a Medicare broker who can compare all or most carriers in your area by premium, average rate increase history, and financial rating. It can be tempting to pick a plan and go with the first option you see or with a company you’ve known for years. Since these plans are standardized, it is in your best interest to compare companies by more than just their brand recognition. How to sign up for Medicare Advantage plans Now, if you’re like 39 percent of Medicare beneficiaries, you may decide a Medicare Advantage plan is the most cost-effective path for you. If so, you’ll still need to sign up for Original Medicare but instead will get your coverage through a private insurance carrier. Medicare Advantage plans, also called Part C plans, are an alternative to Original Medicare, and like Medigap plans, are sold by private insurance carriers. This type of plan works similarly to group health plans. They generally have networks, copays, and built-in drug benefits. The earliest you can sign up for a Medicare Advantage plan is during your Initial Election Period, which coincidentally is usually identical to your Initial Enrollment Period mentioned above. While your Initial Enrollment Period is dependent upon your 65th birthday month, your Initial Election Period is dependent upon your Part A effective date. Unlike Medigap plans, Medicare Advantage plans never have any health questions to answer when applying for coverage. However, also unlike Medigap plans, you can’t apply for Medicare Advantage plans at any time throughout the year. If you miss your Initial Election Period, you’ll have to wait until the fall Annual Election Period (AEP) to sign up for a Medicare Advantage plan. The AEP runs from October 15th–December 7th every year. A Medicare broker can help you compare several Medicare Advantage plans from several carriers to help you find one that your most important doctors accept, covers your medications, and offers the benefits that are most important to you. Step 3: Sign up for Medicare Part D The third step to signing up for Medicare is to enroll in a Medicare Part D plan. If you enroll in a Medicare Advantage plan that includes a Part D plan, you can bypass this step. A Medicare Part D plan will provide you with prescription drug coverage. The initial window to enroll in a Medicare Part D plan is the same as your Medicare Advantage Initial Election Period. If you miss this election period or want to change Part D plans later, you’ll have to wait until the AEP unless you qualify for a special election period. You should consider enrolling in a Part D plan during your Initial Election Period, even if you aren’t currently taking prescription medications, so you can avoid a lifelong late penalty. Stay on top of your coverage Make it through these three steps and you are that much closer to the leisure and liberty that retirement can offer. That said, if anyone tells you it is smooth sailing ahead once you’ve signed up for Medicare, they aren’t painting the full picture for you. The truth is issues do come up with Medicare and premiums do increase. Each year, you’ll want to compare your Medicare plans, such as Medigap, Medicare Advantage, and Part D plans, with others in your area. Medigap plans can change their premiums, and Medicare Advantage and Part D plans can also change their premiums and benefits from year to year. Therefore, you’ll want to shop other plans annually to ensure you’re always enrolled in the most cost-effective plans available to you. Danielle Roberts is a Medicare expert and the co-founder of Boomer Benefits, a licensed insurance agency that helps baby boomers navigate their entry into Medicare in 48 states. She and her team have helped more than 50,000 Medicare beneficiaries make their transition to Medicare at retirement. She is also the author of the best-selling book 10 Costly Medicare Mistakes You Can’t Afford to Make, which helps beneficiaries avoid critical but all too common Medicare pitfalls. Danielle is a member of the Forbes Finance Council and a past president of the Fort Worth chapter of the National Association of Health Underwriters. She now serves on the state board as its Medicare chairperson.
One of the two Medicare enrollment periods that start the new year is Medicare Advantage Open Enrollment. (The other is the General Enrollment Period.) We've gathered the information you need to know about this enrollment period to help you determine whether or not you can participate and what action you want to take. Key Facts Eligibility: Currently enrolled in a Medicare Advantage planEnrollment Dates: January 1 through March 31 annuallyCoverage Start Date: New coverage starts the first of the month after new plan receives notificationAction to Take: Choose a different Medicare Advantage plan or switch to Original Medicare with the option to enroll in a prescription drug plan. What to expect This enrollment period allows you to make changes if your current Medicare Advantage plan no longer meets your needs. Medicare Advantage plans are subject to change, and you may have switched to a new Medicare Advantage plan during the Annual Election Period without realizing the full implications. Fortunately, you have from January 1 through March 31 to make one change. You can either enroll in a new Medicare Advantage plan or switch to Original Medicare. As you decide whether or not to make a change, HMS director of quality programs and Medicare strategy Anne Davis suggests considering the following questions: "How has your experience been with your plan to date? Often the first few experiences will have been with your medications and prescription drug plan (if you enrolled in one) – are all of your medications covered? Are you having any trouble with accessing the care you need? Have you interacted with customer service or care management? How were those experiences? Did you experience a positive care transition? (Think about your relationships with your providers, medication transitions, any provider network changes). Have you reviewed your plan materials and had any questions answered?" How to make changes If you're switching to a new Medicare Advantage plan, you'll need to communicate with the private insurer sponsoring your plan. You can also work with a trusted insurance agent to help you with this process. If you're switching to Original Medicare, you can work with your current Medicare Advantage plan to drop coverage or call Medicare. When you make this change, you're also able to enroll in a prescription drug plan. Original Medicare does not offer prescription drug coverage, so purchasing a prescription drug plan can be a good idea. (Medicare Advantage plans offer qualifying drug coverage.) Prescription drug plans are offered by private insurers. You can work directly with the insurance company offering the plan or with a trusted insurance agent to enroll. Coverage offered Medicare Advantage plans cover the same services Original Medicare does. These plans also offer qualifying prescription drug coverage, so you don't have to buy another plan. If you're planning to switch to a new Medicare Advantage plan, use our checklist to help you find a plan that meets your needs. Original Medicare consists of two parts: Part A and Part B. Part A is hospital insurance. Part B is medical insurance. When you switch to Original Medicare, you'll want to look at Medicare prescription drug plans offered by private insurance companies to ensure coverage for medications. Check out our guide to evaluating a prescription drug plan. Unlike Medicare Advantage plans, Original Medicare does not have annual out-of-pocket limits. Out-of-pocket limits help you control your spending on health care. Instead, you can purchase a Medigap plan from a private insurer to help with out-of-pocket costs for Original Medicare. Since you're applying for Medigap coverage outside of its unique open enrollment period, your policy will go through underwriting to determine insurability. Best Medicare Companies Learn more about top Medicare companies by reading customer reviews. Learn More
Medicare's many enrollment periods can be confusing, which makes it easy to miss an enrollment opportunity. Missing a timely enrollment can lead to higher premiums and leave you without needed coverage. The beginning of each year brings two simultaneous Medicare enrollment periods: General Enrollment and Medicare Advantage Open Enrollment. We'll cover everything you need to know about the General Enrollment Period here. For more information on Medicare Advantage Open Enrollment, read our other article. Key facts Eligibility: Missed your Initial Enrollment Period and are not eligible for a Special Enrollment PeriodEnrollment Dates: January 1 through March 31 annuallyCoverage Start Date: July 1Actions to Take: Enroll in Medicare Part A and Part B Note: The 2020 BENES Act made changes to the General Enrollment Period. These changes will start January 1, 2023. The new General Enrollment Period dates will be October 1 through December 31. Your coverage will start at the beginning of the month after the month you enroll. Learn more about these changes from BoomerBenefits. What to expect If you're enrolling in Medicare during the General Enrollment period, be prepared to see higher prices for premiums. These higher prices result from financial penalties for not enrolling in Medicare during your Initial Enrollment Period to prevent people from only buying coverage when they need it. With Part A, your premium may increase 10 percent for late enrollment. Fortunately, you won't have to pay the higher premium for as long as you keep Part A. You'll only pay the higher premium for the number of years you didn't have Part A times two. So, one year without Part A means two years of paying a higher premium for Part A once you enroll. Part B premiums can increase 10 percent for each year you didn't have Part B. In this case, years are 12-month periods, not necessarily calendar years. Unlike the Part A penalty, the Part B penalty is permanent. How to enroll You'll need to work with Social Security to enroll in Part A and Part B. You can apply online, over the phone, or in-person. If you just need to add Part B enrollment, you'll need to complete form CMS-40B, the Application for Enrollment in Part B. Coverage offered If you're enrolling in Original Medicare, keep in mind that there aren't annual out-of-pocket maximums. Out-of-pocket maximums help control your medical costs because once this limit is reached, the insurer will take responsibility for costs of covered care. Since Original Medicare doesn't have these out-of-pocket limits, you'll want to consider enrolling in a Medigap plan. Medigap plans also don't have out-of-pocket limits. However, these plans offer additional cost-sharing beyond what Medicare Part A and Part B do. As you apply for a Medigap plan, keep in mind that you will likely have to go through underwriting before being issued a policy. Depending on your circumstance, you may not pass underwriting. Original Medicare also doesn't cover prescriptions. You'll need to buy a prescription drug plan from a private insurer for this coverage. You can buy a prescription drug plan April 1 through June 30th after your Part A and Part B sign-up during General Enrollment. As you consider prescription drug plans, use this checklist to ensure that your needs are met and don't forget to read customer reviews. Some Medicare beneficiaries opt for a Medicare Advantage plan instead of signing up for Original Medicare. While you can only sign up for Original Medicare during General Enrollment, you can switch from Original Medicare to a Medicare Advantage plan April 1st through June 30th following your enrollment in Part A and Part B. Best Medicare Companies Learn more about top Medicare companies by reading customer reviews. Learn More
Guest Post by Lindsay Engle Technology offers increased access to health care via telehealth and telemedicine. For years, expanding telehealth has been a priority in the United States, especially to improve health care in rural areas. Yet, due to the global health crisis, these services are more widely available than before through Medicare. Beneficiaries should be aware of what types of virtual care receive coverage. What's covered Telehealth is a broader term that includes telemedicine, which refers to virtual, clinical services. Its use began as a way for people who live in rural areas to access medical professionals whose care was previously unavailable to them. Further, utilizing this technology reduces the burden on health care workers. Since the beginning of the pandemic, and even before, Medicare has been expanding telehealth coverage. As the goal is to replicate an in-person office visit as much as possible, telehealth visits must happen in real-time. The visits most commonly take place over video conference. The only exceptions are in Alaska and Hawaii, where Medicare pays for the use of asynchronous store-and-forward technology. One of the first questions participants have is what virtual services Medicare covers. Telehealth services that receive coverage from Medicare include: Doctor visits, including preventive health visits Evaluations for physical therapy and occupational therapy Speech therapy Psychotherapy and other mental health services Treatment for substance abuse disorders COVID-19 evaluation To receive this care, the patient must be at home or in a permitted facility. However, there is no location restriction for the practitioner. The practitioner then determines whether subsequent care is necessary. Telehealth receives coverage through Part B of Medicare. Part B is outpatient coverage, which also pays for standard doctor visits. The Medicare Telehealth Parity Act of 2017 expanded telehealth under Medicare. Telehealth is part of Medicare's chronic care management program, which provides care for such conditions as cancer, diabetes, and arthritis. Virtual services offer patients a way to check in easily with their physicians and prevent future hospital stays. As of 2019, CMS made some changes that made telehealth more widely available, including the ability for those in need of renal dialysis to receive these services at a facility or home. Additionally, the services are available to those suffering from an acute stroke no matter their location. Medicare also covers remote patient monitoring for chronic and acute conditions. Remote patient monitoring utilizes technology to obtain patient data, such as heart rate and blood pressure. Physicians can review and analyze this data to make recommendations for health care. Medicare telehealth costs Those with Original Medicare pay 20 percent while Medicare covers the remaining 80 percent. If you have a Medigap plan, that 20 percent also receives coverage. Before scheduling a telehealth appointment, make sure Medicare covers the service that you need. The cost of telehealth services varies due to several factors. The best way to find out how much you'll be paying is by speaking to your provider. To keep telehealth costs low, make sure your provider accepts Medicare assignment. If you have an Advantage plan, make sure they are in your network. The amounts that doctors charge vary, and the type of facility where your doctor practices can also influence the price. Although telehealth is convenient, its costs are comparable to those for in-person health care. Thus, the pricing is consistent with the contention that telehealth is an equivalent form of care. Yet, some health care providers have been waiving their telehealth costs during the COVID-19 pandemic. Medicare Advantage plans and telehealth Since 2020, Advantage plan participants have access to a wide range of telemedicine benefits. These plans may offer more of this type of benefit than Original Medicare, meaning that they include services not covered by Part B. However, what's covered may differ by plan. The best way to find out what your Advantage plan offers is to check with your carrier. Expansion of telehealth coverage during COVID-19 During the global health crisis, the Centers for Medicare and Medicaid Services (CMS) is increasing its coverage for telehealth services. The Coronavirus Aid, Relief and Economic Security (CARES) Act makes this possible. Due to temporarily relaxed HIPAA guidelines, beneficiaries and doctors can now use their smartphones and tablets to communicate. Audio-only telehealth services are allowed under these waivers, which will continue until the end of the public health emergency. Generally, Medicare will only reimburse a live videoconference. The waiver also makes these remote services available to new patients, rather than only established patients, as outlined previously. Adjustments such as these increase the number of people telehealth can help at this time. This expansion is essential to slow the virus's spread, as it protects the patient and others with whom they might otherwise come into contact. Many providers waive fees for telehealth appointments to screen for COVID-19. Several changes will be here to stay beyond the pandemic to make health care more accessible. These include telehealth for group psychotherapy, neurobehavioral status exams, and home visits with patients and/or family. Medicare covers virtual check-ins and E-visits during the pandemic to treat COVID-19 and for other medically necessary purposes. These are not technically telehealth services, but they involve technology and receive coverage through Part B of Medicare. Through a virtual check-in, you can use audio or video to communicate, and your practitioner can respond via phone, secure text message, email, patient portal, or audio/visit. E-visits involve the use of a patient portal to talk to providers. It's necessary to speak with your practitioner before starting either virtual check-ins or E-visits. Also important to note is that virtual check-ins cannot be related to visits from the past week or lead to an appointment the next day (or soonest available). Practitioners can also remotely assess images or videos provided by the patient. Both virtual check-ins and E-visits are only for established patients, unlike telehealth visits, which new patients can access during the pandemic waiver. The future of telehealth and Medicare Medicare beneficiaries are generally at a higher risk for contracting COVID-19, so the program must offer protections. As technology improves and the pandemic continues, telehealth will become a mainstay in health care. The convenience of remote health care is sure to leave its mark on the population, and Medicare will likely adjust to accommodate more of these services in the near future. Lindsay Engle is the Medicare expert for MedicareFAQ. She has been working in the Medicare space since 2017. She is featured in many publications and writes regularly for expert columns. She has a passion for sharing her expertise about Medicare to beneficiaries so they can better prepare for health care costs after retirement. You can find her on YouTube where she is featured on a channel for Medicare beneficiaries to become educated on all their options. For more on telemedicine, visit these BestCompany.com articles: What to Expect from Telemedicine Telemedicine: What You Need to Know
If you opted for Medicare Part A and Part B, you don't have coverage for prescriptions. Fortunately, you can purchase a separate plan from a private insurer to cover your medications. If you delay enrollment in a prescription drug plan or lapse in coverage, you'll be charged higher premiums for the delay. If you anticipate needing medications in the future, it can be smart to buy and maintain a plan sooner rather than later. As you look for the best fit, here are five things to evaluate before choosing a prescription drug plan: Pharmacy Network Drug Formulary Cost Medicare Star Ratings Customer Reviews 1. Pharmacy Network Prescription drug plans have pharmacy networks. Be sure that there's an in-network pharmacy in your area before you buy a plan. If you fill prescriptions out-of-network, you may not have coverage for your medications. Generally, prescription drug plans also cover mail delivery. Opting into this service makes getting your medications convenient and saves you a trip to the pharmacy. "Coverage for mail delivery of prescription drugs has become an important plan feature in 2020 with the elevated risks of going inside a pharmacy due to potential COVID-19 exposure," says Christian Worstell, licensed health insurance agent. 2. Drug Formulary Checking the drug formulary is perhaps the most important part of evaluating a prescription drug plan. The drug formulary is the list of medications that your plan covers, so you need to check to see if your medications are covered by the plan. "To make this process easier, write down a list of your drugs that you use regularly or ones that you may need if you have a medical episode. Also, consider any potential changes in your health this year that may require medication next year. Drug Name Dosage (750 mg, 1 mcg, etc.) Frequency (2 times per day for 30 days = 60 pills per month) Optional — Why do you take this medication? Optional — Which doctor prescribed this medication? Keep this list in a safe place and try to remember to update it when your meds change. This is also useful for a family member should you need help picking up or managing your medications," says Bethanie Nonami of Real Talk Medicare. Multiple medications treat the same illness or symptom. Medicare categorizes medications based on what they treat. Plans are not required to cover every drug that treats a diagnosis, but must cover at least two of those medications. "Every year, Medicare defines a list of covered drugs. But every plan doesn’t offer every drug that is available to us or approved by Medicare. Every year the list of formularies change. You should do your due diligence to verify with your plan or proposed plan for 2021, if your drugs are covered," says Nonami. If you have prescriptions that are working for you, you'll want to be sure that your prescription drug plan covers these specific medications. Even if you plan to keep your current prescription drug plan during an Annual Election Period, double-check the formulary because the drug list can change. "You can search online to verify the Formularies that your Medicare Insurance plan covers. The Formulary List is a list of what drugs are covered. This comprehensive list that often breaks the drugs out by Tiers, Drug Dosages, Requirements, and Limits. Your insurance company has their own version of a Formulary List, which may also be called a Prescription Drug List (PDL). In fact, many insurance companies have multiple Formulary Lists. Before you look for your drugs triple check the Formulary List for two critical components: First, make sure you are looking at the PDL for the next plan year of 2021, not the current year. Second, please make sure that you are viewing PDL for your plan for your state. Plans, coverages, and limitations may vary by state," says Nonami. If there are prescriptions that are not covered by your plan that you'd like to have covered, you can look for another plan or work through your plan's prior authorization for step therapy. You may have to start with a less expensive, generic medication to see if it's effective first. Your doctor can also work with your insurer for an exception to allow you to start directly with the more expensive medication with coverage if the generic one would cause adverse health effects or if it's medically necessary to start with the more expensive drug. 3. Cost Aside from evaluating the monthly premiums, you also need to consider the out-of-pocket costs. Medications are categorized in tiers, and each tier has different cost-sharing rules. Look for how your prescriptions are categorized under your plan and project your out-of-pocket costs for your medications. "Do you prefer a higher monthly premium in exchange for a lower deductible or cost-sharing? Or would you rather pay less upfront per month but pay a little more for each prescription? There's no universal right or wrong and each plan shopper should ask themselves how they would most prefer to spend their money," says Worstell. You'll also need to consider the coverage gap. Your plan has limits on the amount it contributes to your prescriptions. When the insurer has reached its limit, you'll be charged higher copays for your medications until the gap is closed. 4. Medicare Star Ratings The Centers for Medicare & Medicaid Services rate Medicare prescription drug plans each year. These ratings score the quality of prescription drug plans by considering clinical recommendations and plan member feedback. Five is the highest rating. New plans are not rated. "Plan quality should not be ignored either. Each year, plans are rated on a scale of one to five stars for quality and customer experience. Shoppers should pay attention to a plan's rating before buying," says Worstell. 5. Customer Reviews Customer reviews also offer insight into the customer experience with Medicare prescription drug plans. While reviews are sorted by company, reading reviews can help you understand how an insurer treats its Medicare plan members. Pay attention to what plan reviewers mention. Private insurers offer Medicare Advantage, prescription drug, and Medicare supplement (Medigap) insurance plans. Weigh what reviewers writing about prescription drug plans say over what Medicare Advantage or Medigap members say. Note what year the reviews are from. Prescription drug plans can change, so the most recent reviews are the most helpful, even though the plans may change each year. You can trust the reviews on Best Company because we do not repress reviews. All reviews that pass our verification process are published — positive or negative. Our verification process helps prevent the publication of fake reviews. 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When you become eligible for Medicare, you have lots of decisions to make. You can opt for Original Medicare, which is managed by the Centers for Medicare & Medicaid Services, or a Medicare Advantage plan offered by a private insurer. If you're looking for a Medicare Advantage plan — whether it's your first time enrolling in Medicare or you're participating in Medicare's Annual Election Period — here are six things you need to consider before buying in a Medicare Advantage plan: Provider Network Drug Formulary Cost Additional Coverage Medicare Star Rating Customer Reviews 1. Provider Network Unlike Original Medicare, Medicare Advantage plans have set provider networks. These networks can be specific to your plan and to your area. "The first and most important factor are networks. You want to make sure your regular doctors accept your plan and your preferred healthcare facilities nearby are also in their network. You should compare PPO and HMO plans to see where you have the best access to care," says Adam Hyers, Hyers and Associates, Inc. If your Medicare Advantage plan has an Health Maintenance Organization (HMO) network structure, you'll only have insurance coverage when you visit in-network providers. If you have a Preferred Provider Organization (PPO) network structure, you'll have the flexibility to visit out-of-network providers with higher out-of-pocket costs. If you're considering a Medicare Advantage plan, be sure to check your provider network to make sure there are doctors in your area who can give you the care you need. Most insurers offer an online "Find a Provider" tool that allows you to search for doctors in your area that accept your plan. Since networks can change, it's worth reaching out directly to doctor's offices to double-check that they'll continue to accept your plan in 2021 before you enroll in it again. 2. Drug Formulary Most Medicare Advantage plans include qualifying prescription drug coverage. If your Medicare Advantage plan offers this coverage, you don't need to purchase a separate plan to cover prescriptions. As you evaluate Medicare Advantage plans, check the drug formulary to make sure that the medications you need are covered. Even if they're covered on your current plan, they may not be covered for 2021. If there's a medication that you think may work better than your current medication, you should also look for that drug to be listed on the formulary and how cost-sharing works. "Some Medicare Advantage plans will give you better pricing on your prescriptions than others. All other things being nearly equal, prescription costs can be a differentiating factor," says Hyers. In addition to checking that your medications are listed on your plan's formulary, you should also pay attention to what tier they fall under. Each tier has different cost-sharing rules. Some tiers have higher out-of-pocket costs. Understanding how your drugs are categorized will help you anticipate costs. The insurance company should provide you with the drug formulary before you enroll in a plan. You may be able to find it online as you learn about plans online. 3. Cost As you look at Medicare Advantage plans, you'll want to consider the out-of-pocket costs and any monthly premium amounts you'll have. "Many Medicare Advantage plans these days are offering a $0 premium, so the deductible and copayments or coinsurance requirements are deserving of a closer look," says Christian Worstell, licensed insurance agent. Low monthly premiums are especially friendly when you're on a fixed income dealing with a rising cost of living. "Before you enroll in an Advantage plan, it’s important to understand why these plans have low to zero dollar premiums. They come with many additional out of pocket costs in the form of copays, deductibles, and coinsurance. Medicare pays the Advantage carrier around $1,000 per month to take on your risk. Then they collect cost-sharing from the beneficiary as they use the benefits," says Lindsay Engle, Medicare expert. Knowing that you'll likely be taking more responsibility out-of-pocket for your care, project your prescription and medical services costs based on what you predict you'll need. Consider the copays or coinsurance, the annual deductible, and out-of-pocket maximum. Understanding these costs will help you find a plan that will protect your budget and meet your needs in the long-run. 4. Additional Features Medicare Advantage plans are required to cover the same services that Medicare does. With prescriptions, Medicare groups similar medications and plans have to cover at least one drug per group. Medicare Advantage plans often include additional coverage. Some plans offer some dental, vision, and hearing coverage. Medicare Advantage programs may also include fitness programs, access to telemedicine, and other features. Keep in mind that the additional coverage offered by Medicare Advantage may not be as robust as choosing a separate dental or vision plan. However, the additional coverage and features can be nice perks of choosing a Medicare Advantage plan. Some Medicare Advantage plans are Special Needs plans. These plans are tailored to meet the specific needs like dual eligibility for Medicare and Medicaid or chronic illness. If you have specific needs, looking into a Special Needs plan may be beneficial. 5. Medicare Star Rating The Centers for Medicare & Medicaid Services (CMS) rates Medicare Advantage plans annually for the quality of their services. These ratings consider clinical recommendations and plan member feedback. These quality ratings can help you understand the care quality offered through Medicare Advantage plans. New Medicare Advantage plans are not rated. 6. Customer Reviews Customer reviews can also help you evaluate how well insurers treat their members. Each member's experience will vary based on their personal needs, location, and plan; however, reviews can also help you gauge the quality offered by an insurance company. You can trust reviews posted on Best Company because we have a verification process to ensure that reviews are left by real people. We also don't suppress reviews, so you can get an unfiltered understanding of the customer experience with insurers. As you read customer reviews, pay attention to what reviewers say about their plan. Private insurers offer Medicare Advantage, prescription drug, and Medigap plans. Give more weight to reviewers that have a similar plan to the one you're looking for. This will help you get a better sense of how good the plans you need are from the insurer. Medicare Customer Reviews Learn more about Medicare companies by looking at the customer ratings and reviews. Learn More