During Medicare's open enrollment period, which runs from Oct. 15 to Dec. 7, beneficiaries — seniors, younger people with disabilities and individuals with end-stage renal disease — can choose plans for next year. Options include traditional Medicare from the government or a wide array of Medicare Advantage plans, which are private insurance products that encompass similar benefits.
The parts of Medicare
Medicare has four main components:
- Part A is hospital insurance. You don't usually pay a monthly premium for Part A if you or your spouse paid Medicare taxes while working.
- Part B is medical insurance.
- Part C is Medicare Advantage — private plans that use managed care models, such as HMOs and PPOs.
- Part D is prescription drug coverage.
In general, you are automatically enrolled in Part A and Part B at age 65. Many enrollees find they need extra insurance and sign up for Medicare Supplement Insurance, also known as Medigap. Medigap is purchased from a private health insurance company and helps cover out-of-pocket expenses like copayments, coinsurance and deductibles.
Medigap rules can be restrictive and complex. Your best chance to get Medigap is when you first join Medicare as a senior, after you turn 65. You have a six-month window when you can buy a Medigap policy and insurers can't turn you down or charge you more because of your health conditions.
Medicare Advantage — be careful
Medicare Advantage can be useful, but it's not always perfect. Among the disadvantages of Medicare Advantage are limited networks, requirements for prior approval, delays and denials. You can switch from Medicare Advantage back to the original Medicare during open enrollment or the Medicare Advantage open enrollment window.
Your drug coverage can come through a stand-alone Part D plan, needed if you are in traditional Medicare, or included as part of Medicare Advantage. Use Medicare.gov to see if your prescriptions are included.
If you missed your Part B enrollment window — three months before your 65th birthday and three months after — you'll face a late enrollment penalty when you sign up. The penalty equals 10% of the standard monthly premium for each 12-month period you delayed enrollment. You also may have to pay a late enrollment penalty if you didn't sign up for Part D or if your prescription drug coverage didn't meet Medicare's minimum standard. You may not be taking prescription drugs now, but consider signing up for a Medicare drug plan or a Medicare Advantage plan with drug coverage to avoid a penalty later.
Medicare has an online tool that makes it easier to comparison shop. Log in to Medicare.gov and select the link for "Find health & drug plans." Also, you can get guidance from Medicare by calling 1-800-633-4227. You can turn to a broker, a navigator or an enrollment counselor for help.
If you're at that time of life, let us know how we can help you make a smooth transition. Give us a call at Benefits by Design Insurance Services or send us an email to schedule a time to talk and we'll be happy to help you get ready for Medicare. Our phone numbers are 760-696-3573 in Carlsbad or 415-524-8959 in Larkspur, California. You can also email us at admin@benefitsbydesignca.com.
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