Should You Change Medicare Plans?

by Karl on October 31, 2011[printfriendly]

‘Tis the season for “Open Enrollment” otherwise known as the Annual Election Period for those on Medicare.
Between October 15th and December 7th is when Medicare allows you to switch plans. Let’s walk through the basics first.
There are four parts to Medicare.
·         Part A covers care in a hospital, skilled nursing facility, hospice care and some home health care.
·         Part B pays for medically necessary service like doctors, outpatient care, other services like occupational and physical therapy, and some home health care.
·         Part C is Medicare Advantage plans like HMO’s (Health Maintenance Organizations), fee for service, and PPO’s (Preferred Provider Organizations).
·         Part D is prescription drug coverage.
There are HMO’s, PPO’s, Medigap (also called Medicare supplement) plans and local PPO’s. Which and what type of plan should you choose?
There are factors to consider such as:
·         Your health
·         Your budget
·         What medications you are taking
·         Your doctors
·         Do you frequently see specialists or is a general practice MD OK?
·         Do you want to go to your choice of a Medicare certified rehab facility or are you OK with one that is specifically contracted by the insurance company HMO?
If you have been on a Medicare Advantage HMO and have serious health problems, it may not be possible to switch to a Medigap PPO. These plans may be medically underwritten if it is not the Initial Enrollment Period or does not meet other guarantee issue requirements.
But if you want to go from a Medigap PPO plan to a Medicare Advantage HMO or PPO, that is OK because it is not medically underwritten.
First, let’s talk about Medicare supplement or Medigap plans. There are 10 standard Medicare supplement (Medigap) plans. These plans pay in addition to Medicare.
Medicare is your primary insurance coverage and the Medicare supplement plan is secondary. Medicare pays 80% of the Medicare approved amount and the Medicare supplement plan pays the 20%.
The advantage of this type of plan is the freedom of choice of providers and facilities.
The downside is that there is a monthly premium and, in certain circumstances, must qualify for coverage.
Premiums are based on age and where you live. They could range from under $100 to over $300 per month not including deductibles.
Next there is Medicare Advantage or Part C plans.
The two most common Medicare Advantage (MA) plans are HMO’s and PPO’s. These combine coverage for Medicare Part A and B and are administered by private health insurance companies.
You still keep your Medicare card, but your Medicare coverage is now taken over by an insurance company. Medicare pays the insurance company every month for providing this coverage.
The advantage to this type of plan is little or no monthly premium. Your Part B premium deducted from your Social Security check pays for this coverage. But there may be deductibles.
The disadvantage is that if you are on a MA HMO, you must go to your Primary Care doctor first. You cannot go directly to a specialist (If you do, you will pay100% of the cost). So there is lack of flexibility.
For rehab care, you must go to a contracted facility.  
MA PPO plans may have low or $0 monthly premiums. So what is the difference between a MA PPO and a Medigap PPO with a higher premium?
The amount of the contracted facilities and doctors is generally less with a MA PPO than a Medigap PPO. So the answer is generally less choice.
As an example, if you are discharged from a hospital after 3 days, if there is a bed available, you can go to Keiro Nursing Home for rehab care if you have Blue Cross Medicare supplement PPO plans C-G, M, or N, but not Blue Cross MA PPO.
Let’s move on to Medicare Part D or prescription drug plans.
In selecting the right prescription drug plan, the best first step is to go to the website and click on Compare Drug and Health Plans.
You will be asked to input your prescription information. A comparison of all the drug plans for your area will be shown as well as if your prescriptions are covered or not.   
If you are selecting a MA plan, they do offer plans with or without drug coverage. Once again, make sure that your drugs are covered by the plan. If they are not, you can select a stand alone Part D with your MA plan.
CAUTION: If you sign up for a MA-PD plan (Medicare Advantage that includes the Part D plan), DO NOT sign up for a stand alone Part D plan. You must sign up for a MA plan only.  
Other things to consider are:
·         Your budget
·         Can you afford the monthly premiums of a stand alone Part D plan?
·         Will you hit the donut hole because you take a lot of medications?
·         Do you take generics or brand name?
·         What are the co pays?
·         Is there a mail order program or are you limited to a one month supply for your medications?
·         What tier is your prescription?
If you are not sure or need help, you can always call us here at the office at 714-994-0599 and we can run it through the computer for you. Or you can call the company you are considering directly.
This is a once a year decision so make sure that you consider carefully. Don’t make your decision on which company has the best commercials.
Do what is best for you.
Karl Kim, CFP, CLTC is a licensed California insurance broker, Lic #0810324. This is meant to be an educational article. Do not make any plan decisions solely on the information contained herein. Please consult with the appropriate companies and review all Medicare and company information. Speak with your insurance broker or company representative before taking any action. We are not responsible for any inaccuracies or misinformation.
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