It’s beginning to look a lot like Medicare open enrollment time.
The 2021 dates are October 15 to December 7. Don’t bother to look at a calendar; you will know by the onslaught of mail from health and prescription drug companies and, yes, your friendly federal government.
To successfully maneuver the system, you must accurately predict all your medical and prescription drug plans for the next year, match it to the best plan, and then figure out how to pay.
If that sounds impossible, it is. So, based on imperfect information and misleading literature, you will need to do the next best thing and make a semi-educated guess.
Original Medicare or Medicare Advantage?
Your first decision should be whether to sign up for Original Medicare or Medicare Advantage.
A quick comparison is in order. Medicare Advantage is a bundled plan that includes Parts A, B and, usually, Part D. If you purchase a Medicare Advantage plan, then you would only be dealing with one company for most of your health care insurance, which is convenient. What is not convenient is that Medicare Advantage is a managed care plan, with limited provider networks. There are different kinds of Medicare Advantage plans. If your plan is a PPO, you may be able to go to an out-of-network provider but will likely have to pay a higher share of the cost. If your plan is an HMO, then you may be limited to in-network providers, except for emergency services. As of July 2020, 24% of Medicare beneficiaries were in Medical Advantage HMOs, while 15% were in PPOs.
Some Medicare Advantage plans market that they include extra benefits not covered by Original Medicare, such as vision, hearing and dental. This may sound attractive, but before you decide you need to look further into the coverage description because most plans are very limited.
A Medicare Advantage plan has the discretion to alter its “cost-sharing,” which is a genteel description of your out-of-pocket costs. Unlike Original Medicare, an MA plan can charge cost-sharing for the first 20 days. These cost-sharing expenses can be more than what you would pay with Original Medicare.
Then there is that pesky prior authorization. Under an MA plan, you will usually be required to receive prior authorization before a service will be covered. This can lead to problems accessing care. Original Medicare, in contrast, does not generally require prior authorization for services.
Now let’s look at Original Medicare, which is Parts A (hospital), B (other medical expenses) and D (prescription drugs). Everyone knows there are gaps in Medicare coverage that can lead to outrageous expenses, so the key to success is to have other health coverage, such as Medicare supplemental insurance, group health insurance, Medicaid, or a qualified Medicare Beneficiary Program.
Most people purchase the Medicare supplemental insurance during their initial six-month open enrollment period when they first enroll in Medicare. They cannot be refused this insurance because of a pre-existing condition. After that six-month period, they may not be able to enroll due to pre-existing conditions.
There are 10 Medicare supplement insurance plans, labeled with a letter of the alphabet (A, B, C, D, F, G K, L, M and N). Each has a different combination of benefits. An excellent description of each plan can be found on the Texas Department of Insurance website at tdi.texas.gov/pubs/consumer/medsup.html.
Further helpful reading can be found in the federal government booklet Medicare & You, available on the medicare.gov website, and the Center for Medicare Advocacy website at medicareadvocacy.org.
Virginia Hammerle is president of Hammerle Finley Law Firm. She is an Accredited Estate Planner, has been Board Certified in Civil Trial Law for 25 years, and recognized as a Super Lawyer for the past 10 years. She blogs regularly on senior issues and the law and has a monthly newsletter. Contact at legaltalktexas@hammerle.com.
