Medicare Housekeeping Time!

A good practice to get into at the beginning of each year is to take a little time and do some annual Medicare housekeeping.  The following tips are also helpful if you have recently turned 65 or retired and you’re in first year on Medicare.

 1.  Schedule Your Check-up

Whether you have Original Medicare, Original Medicare with the addition of a Medicare Supplement or a Medicare Advantage plan, you are offered a yearly wellness exam.   Don’t forget to schedule this!  The earlier in the year, the better!  This is not only important for your general health but will also help make your overall healthcare run more smoothly.  If you happen to have a Medicare Advantage plan that requires referrals for specialist visits, you might be able to get any anticipated referrals taken care of at this initial appointment with your primary care provider.  For instance, if you know you need to see your cardiologist at least two times a year get those referrals while you’re already in your PCP’s office.   You can also find out what preventative care services and screenings you should take advantage of this year.  Medicare covers the following screenings along with many others – prostate cancer, colorectal cancer, mammograms, depression, diabetes – the list goes on.   Getting into the habit of scheduling these Medicare housekeeping “peace of mind” tests at the beginning of the year will make sure that it doesn’t slip your mind.

Complete list of screenings can be found by clicking here.

2.  Authorization Form

If you are brand new to Medicare or have never taken care of this in the past, you might want to consider filling out an Authorization Form to allow family or friends to call Medicare on your behalf.  You must give prior permission in writing for someone to be given access to your personal health information.   You can “revoke” permission or change the individual listed as authorized at a later date if you’d like.  It’s just important to make sure you take care of this before it’s needed.  Find the authorization form by clicking here.

3.  MyMedicare.gov

A convenient tool for those enrolled in Original Medicare or Original Medicare plus a supplement is MyMedicare.gov.  By signing up, you will be given access to a convenient, online service that puts your personal Medicare information at your fingertips anytime day or night.   After you sign up at Medicare.gov you can begin using the site’s services by completing an “Initial Enrollment Questionnaire” that will ensure your bills are processed correctly with Medicare.  With the click of their “Blue Button” you can easily download and save your health information and files to your computer, tablet or mobile device or print off an “On the Go” report to take with you to doctor appointments.   A few other things the site conveniently keeps track of is your Part B deductible status and a record of preventative services available to you.

4.  New ID cards

Recent enrollment in a Medicare Advantage plan, Supplement or PDP also means that you will have new cards arriving in the mail.  Make sure you remember to take these along on your first visit to your PCP and to any visit with a new doctor.  Your doctor’s office will want copies of the cards on file and this will ensure there is no confusion when it comes to billing.

5.  Prescription Medications

At the beginning of the year, try to get your medication prescriptions filled early.  Getting this taken care of early will make sure that you are made aware of any formulary changes in your plan.  You should receive a notification of changes in your insurance company’s drug list if it affects you, but in case you missed it or it hasn’t made it to your mailbox yet you will at least be aware of the situation before it becomes a problem.

The Takeaway:

There are a few Medicare housekeeping items to tick off every year you’re on Medicare to ensure smooth sailing.  Hopefully addressing these issues when you first sign up for Medicare will help eliminate any bumps you might run into down the road, but if you haven’t done all of these yet, making it a practice to do some of these things every year will keep things running smoothly.

The Affordable Care Act (ACA) and Medicare

The Affordable Care Act (ACA), also known as Obamacare, was enacted in March 2010 and heralded the biggest change in the US healthcare system since the creation of Medicare and Medicaid in 1965. Following the passage of the law, there was the creation of a Health Insurance Marketplace where anyone can get health insurance at an “affordable” price, since private health insurance plans have been subsidized by the government.

If you’ve been following the news at all, you’ve seen where major insurance companies have drastically shrunk the number of states they participate in, or dropped out altogether. For those who have stayed, premiums have skyrocketed. The recent presidential election has thrown a new spotlight on Obamacare, as Trump has indicated he’d support repealing ACA altogether. Politics and news coverage aside, I thought I’d spend a bit of time covering ACA as it relates to your Medicare coverage. The following are some salient facts that you need to know about the ACA, with some special emphasis on ACA and Medicare.

1. Medicare Coverage Is Protected

One important fact to recognize is that the Health Insurance marketplace does not include Medicare. This means that your Medicare coverage will not be interfered with in any way. It also means that once you have been covered under Medicare, you do not have to do anything with the marketplace during the open enrollment period.

However, people who only have Medicare Part B health insurance (which covers outpatient services) are not considered to be adequately covered and are required to supplement their insurance coverage. A failure to do this may lead to paying of a fee that is charged on those who do not have insurance. This is due to the fact that the ACA has an individual mandate included, which requires everyone eligible for health insurance cover to buy it. This is done so as to avoid healthy people from delaying getting health insurance cover until they fall sick, which something that will increase costs for everyone and lead to fewer people affording health insurance.

In 2016, the fee for not having minimum essential coverage is 2.5% of your household income or $695 per adult and $347.5 per child, whichever amount is higher.

2. Can You Choose Marketplace Coverage Instead of Medicare?

The simplest answer to this is yes, but you won’t want to do it in almost all cases.  If you’re currently on an ACA plan and turn 65 or are otherwise eligible for Medicare, you can technically keep your ACA plan. You won’t want to do that, as benefits under Original Medicare or a Medicare Advantage plan are far better and in almost all cases, cheaper than an ACA plan. However, the federal government won’t actually force you to drop your ACA plan, you must do it yourself. There are a few situations in which this scenario might be possible, for example:

If you happen to be paying monthly premiums for Part A, you can opt out of Medicare Part A and B and have a marketplace plan instead if this serves your situation better. This is highly unlikely, as most people do not pay monthly premiums for Part A because they paid for it through their taxes when they were working before turning 65.

3. Can You Get a Marketplace plan in Addition to Medicare?

It is actually illegal for anyone to offer you a marketplace plan if they know or if you already have Medicare coverage. This applies even to cases where you have either Part A or Part B. If you feel the need to plug a gap in your Medicare coverage, then the right thing to do is adding on supplemental Medicare insurance, also known as Medigap insurance. It is also not possible to purchase a standalone dental plan on the marketplace if you have Medicare coverage.

4. Cancelling Your ACA Plan When you Get Medicare

You can do this online. Click here and follow the directions.

The Takeaway:

Once you turn 65, or are otherwise eligible for Medicare, you don’t need your ACA plan any longer. If you have a Marketplace plan, you can keep it until your Medicare coverage starts. Then you can end your Marketplace plan without penalty. However, you’ll have to take action to cancel your ACA policy as soon as your Medicare coverage begins. The government won’t cancel it for you, you have to do it. If you don’t, you’ll essentially be left paying your applicable Medicare premiums as well as your ACA plan premium, even though you can’t use the ACA plan any longer to pay for your healthcare.

2017 Medicare Star Ratings Released

Medicare Advantage Star Ratings have been released for 2017 and for some large insurers, the news isn’t pretty. The news is substantially better for smaller, regional plans which follows a historic trend. However, whether or not a 5 star plan is available to you largely depends on where you live. What does this mean for you and your wallet? Read on.

Medicare Star Ratings – Why They’re Important to You

The Centers for Medicare & Medicaid Services’ (CMS) five-star ratings of private Medicare plans are a big deal for insurance companies, as higher ratings are tied to considerable bonus payments from CMS to them. Check out my post on Star Ratings for additional background by clicking here.

Some of these payments can be kept by the insurer as pure profit, however a percentage of these must be invested back into the Medicare Advantage plan as increased (better) benefits or lower monthly premiums. That’s good for you, the consumer as this essentially makes these products more attractive. Makes sense, right? Higher star ratings generally means better benefits and lower premiums which attracts more customers.

If a MAPD or Prescription Drug Plan (PDP) achieves 5-star status in any given year, the real “win” for that company is that they can enroll members year-round, while other insurance companies can only do so during the Annual Election Period (AEP) which runs from October 15 through December 7. Essentially, achieving five stars gives the plan a huge sales and marketing advantage over their competitors.

The Medicare Advantage (MAPD) landscape across the county is largely occupied by big insurance companies like United Healthcare (AARP brand) Blue Cross and Blue Shield, Humana, Cigna and Aetna. However, there are many smaller companies who also offer MAPD plans for sale that are regional in nature. Historically, it’s the smaller companies that have been awarded high star ratings, and that trend continues for 2017.

The Large Insurers – Star Ratings Performance

#1. Let’s start with Aetna, which also operates as Coventry in many states. Looks like they were the big winner this year among the large insurance companies. For 2017, 91 percent of the insurer’s MA members will be in four-star or higher Medicare Advantage and prescription drug (MA-PD) plans. Aetna recently noted it has the highest percentage of Medicare members enrolled in four-star plans among publicly traded companies. No Aetna plans achieved a 5 star rating for 2017.

#2. Anthem, the parent company of many Blue Cross and Blue Shield plans said nearly 51 percent of their Medicare Advantage members will be enrolled in plans that achieved four stars or higher and approximately 22 percent of members enrolled in plans that achieved four stars or higher in 2016. So while the overall number of members in a highly-rated plan is high, no Anthem plans achieved a 5 star rating for 2017.

#3. United Healthcare/AARP hasn’t sent out a press release, and didn’t address their Star Ratings in their latest earnings call. However a quick review of their plans shows they achieved one 5 star rating in an HMO that serves several Texas markets.

4. Cigna and Humana (which are in the middle of merger discussions) saw a reduction in its ratings, as next year only 20 percent of its MA customers will be in plans with four stars or higher. To throw gas onto the fire, Cigna is still on a government-imposed sales and marketing ban and isn’t expected to be allowed to enroll new members into their Medicare Advantage and PDP plans until early 2017.

Smaller Insurance Companies Perform Better…Again

CMS announcement of the 2017 Medicare star quality ratings, Kaiser Permanente’s Northern and Southern California, Colorado, Northwest and Mid-Atlantic States regions received 5 out of 5 stars each, the highest overall rating. Kaiser Permanente’s Georgia and Hawaii regions earned 4.5 out of 5 stars.

In fact, you won’t find any “household name” companies other than Kaiser and the one United Healthcare plan achieved 5 stars this year.

Overall MAPD and PDP Quality Improving

According to CMS, approximately 49 percent of MAPDs in 2017 earned four stars or higher, which is up slightly from 2015.

Overall, CMS said nearly 70 percent of Medicare Advantage enrollees will still be in plans that receive at least four stars for quality in 2017.
Just over half of private Medicare customers signed up for plans that received at least four stars in 2014. But the new figure is down slightly from this year, when just over 70 percent of the 17 million-plus Medicare Advantage customers enrolled in the high-quality plans.

There has been similar improvement in quality ratings for prescription drug plans. Just over 40 percent of Medicare beneficiaries who enroll in stand-alone prescription drug plans are expected to be in plans with at least four stars next year. That’s up from just 9 percent who were enrolled in such high-performing plans in 2014.

2017 MAPD 5-Star Rated Plans

KelseyCare Plan Administrators
Enrollment: 30,769
State: Texas

Kaiser Foundation Health Plan
Enrollment: 1,086,961
State: California

Kaiser Foundation Health Plan of Colorado
Enrollment: 104,117
State: Colorado

Kaiser Foundation of the Mid-Atlantic States
Enrollment: 68,575
States: District of Columbia, 11 counties in Maryland, 9 counties in Virginia

Tufts Associated Health Maintenance Organization
Enrollment: 107,311
State: Massachusetts

Blue Cross Blue Shield of Massachusetts HMO Blue
Enrollment: 10,302
State: Massachusetts

Group Health Plan
Enrollment: 53,633
States: Minnesota, Wisconsin

United Healthcare AARP Medicare Complete Plan 1
Enrollment: 31,035
State: Texas

Physicians Health Choice of Texas
Enrollment: 31,035
State: Texas

Capital District Physicians’ Health Plan Universal Benefits
Enrollment: 3,827
State: New York

Gundersen Health Plan
Enrollment: 14,462
States: Iowa, Wisconsin

Optimum HealthCare
Enrollment: 45,153
State: Florida

Kaiser Foundation Health Plan of the Northwest
Enrollment: 84,567
States: Oregon, Washington

The Takeaway:

Almost 18.5 million individuals will be enrolled in private Medicare Advantage plans next year, representing about one-third of all beneficiaries. The higher the Star Rating, the more money the insurance company receives from CMS. A portion of that bonus money must be spent on better benefits and lower premiums, which is good for you and your wallet. If you are lucky enough to live in an area boasting a 5-star plan in 2017, you may enroll in those plans anytime during the year; you don’t have to wait until the next AEP.

The Basics of Medicare and Enrolling

In this quick, easy post, I’ll provide the basics of Medicare, explain its different parts and highlight how and when you can enroll.

What is Medicare?

Medicare in the United States is a national social insurance program. Medicare has been around since 1966, after its enactment in 1965 by Congress under Title XVII of the Social Security Act, signed by President Johnson.  Did you know Harry Truman and his wife, Bess were the first two Americans to get Medicare?  Now you do.  Anyway, Medicare generally covers people who are 65 years and above. However, there are some exceptions for younger people living with disabilities, end stage renal disease and Lou Gehrig’s disease (amyotrophic lateral sclerosis).

The Alphabet Soup of Medicare

Medicare is divided into 4 parts, A-D:
1) Medicare Part A: hospital insurance that will cover Inpatient care, skilled nursing facility care, hospice and home health care.
2) Medicare Part B: medical insurance that mainly covers outpatient care and preventive treatment services such as Pap smear tests for cervical cancer.
3) Medicare Part C: this is also referred to as Medicare Advantage and is a combination of Part A and Part B. Part C is offered by private insurance companies that have been approved by Medicare. Under this plan, you may be able to access more benefits and services, though sometimes at extra cost.
4) Medicare Part D: this plan covers drug prescription costs you’d normally get at a pharmacy or mail-order pharmacy.

How Do I Enroll in Medicare?

When enrolling for Medicare, there are really only two options available when you break it down.  I know, there are millions of websites and publications out there that are confusing.  I call it, “analysis paralysis.”  Don’t spend hours and hours trying to figure out what options are out there, because there really are only two.

1) Staying in Original Medicare: this is Medicare Part A and Medicare Part B. If you are interested in a PDP plan (and you should be) then you will have to find a Part D plan (PDP). It is important to enroll for Medicare Part D when you are first eligible, as this will protect you from paying the late enrollment penalty if you decide to do so later. You may also opt for supplemental insurance (Medicare supplement, or Medigap) that will plug gaps in the benefits offered by Part A and Part B.  And believe me, there are a lot of gaps to plug if you decide to go “Bare with Medicare.” Click here for my post about why you really need to think about a Medicare Supplement policy if you decide not to go with a Medicare Advantage plan. Also, check out my post on whether or not Medicare Supplement plan F or Medicare Supplement plan High-Deductible F makes more sense by clicking here.

2) Joining a Medicare Advantage Plan (Part C): this is the other option available. In order to be eligible for this plan, you must first sign up for the Original Medicare Part A and B.  Check out my post on whether or not a Medicare Advantage plan is right for you by clicking here.

When Can You Apply for Medicare?

For starters, most people get Medicare coverage automatically. These people include:
1) People already receiving benefits from Social Security or the Railroad Retirement Board.
2) People under 65 years, living with disabilities and have been receiving disability benefits for 24 months.
3) People living with ALS (amyotrophic Lateral Sclerosis) receive coverage the month their Social Security benefits start kicking in.

Some folks do have to sign up, for instance:
1) People close to 65 and not receiving Social Security benefits.
2) People with End Stage Renal Disease.
3) People living in Puerto Rico will have to sign up for Part B separately.

There are three enrollment periods when you can initially sign up:
1) Initial Enrollment Period: this is a 7 month part that begins 3 months before you turn 65 up to 3 months after your 65th birthday.
2) General Enrollment Period: If you did not sign up for Medicare during the initial enrollment period, you can do so between January 1st and March 31st every year.
3) Special Enrollment Period: this is for people (or their spouses) who are still working and are covered by their group’s health plan, or during an 8 month period that begins the month that their employment ends.

Finally, there’s the Annual Election Period (AEP) which begins on October 15, and ends on December 7th.  That’s when folks already on Medicare get to choose the PDP or the Medicare Advantage plan they want for the following year, without underwriting.

 

Do I Have Medicare or Medicaid?

You may have Medicare, Medicaid or maybe both!  Other than sounding similar, the words Medicare and Medicaid are very different government-sponsored health insurance programs, but they can work together.  If you have both, you may qualify for a special type of Medicare Advantage plan.

Medicare and Medicaid are two government programs that help people pay for their health care.   By now, you already know Medicare is generally for people who are older or disabled.  If you need a refresher, head on over to the Medicare 101 page by clicking here.  Medicaid is for people with low incomes.  Essentially, these are the poor.  These folks don’t have the money to pay for their own health health insurance.

What is Medicaid?

Medicaid is an assistance program.  It serves low-income people of every age and benefits vary from state to state.  People on Medicaid usually pay no costs for medical expenses, however in some states small co-pays are required and they vary from state to state. It is run by state and local governments within federal guidelines.  Qualifying income and resource levels are set by the feds.  Every state decides what they’ll use to qualify applicants when calculating whether or not they’ll qualify.

Medicaid Is Not the Same as Medicare, but Both Can Work Together

If you are eligible for both Medicare and Medicaid, Medicare and Medicaid will work together to provide you with very complete health coverage.  This means both working together should cover most, if not all out of pocket costs and you won’t get a bill.

Can I Have Both Medicare and Medicaid?

People who qualify for both Medicare and Medicaid are said to be “dual eligible.”  If you have Medicare and Medicaid, you may be eligible to enroll in a special Medicare Advantage plan that can provide additional benefits above and beyond what you get with either.  This is accomplished by enrolling in a “Dual Special Needs Plan” also known as a “Dual-SNP” (pronounced “dual- snip”) plan.  These plans are exploding in popularity, mainly because the insurance companies are paid handsomely by the federal government to manage the dual-eligible (Medicare and Medicaid) population due to their health status.  The only problem is they’re hard to find and largely only available in metropolitan areas.  I’ve got an article I’ve got queued up all about D-SNP plans which I’ll publish in a week or so.  When I do, I’ll link back here.

In the meantime, if you think you qualify for Medicaid, click here to check out more information and apply.  If you’re brave enough to research D-SNP plans in your area before I post, click here  or call 1-800-MEDICARE (1-800-633-4227).

Why Choose a Medicare Advantage Plan?

Medicare Advantage plans (MAPD) have exploded in popularity since re-introduced around a decade ago.  Is it the best plan for you? What makes these plans so popular?

It’s no secret prescription drug costs are rising much faster than inflation, and overall health spending is up.  Every year, it seems the government raises the Medicare Part B premium, Medicare Supplement (Medigap) and Medicare Part D (PDP) plans cost more, too.  Although I assume by now you already know what a Medicare Advantage plan is (click here if you don’t for a primer) there are very distinct reasons why according to Kaiser Family Foundation 31% of all seniors are now enrolled in a Medicare Advantage plan.

Medicare Advantage plans come in 3 flavors.

  1.  PPO – “Preferred Provider Organization” – you can use doctors and hospitals in and out of the plan’s network.
  2. HMO – “Health Maintenance Organization” – you cannot use doctors out of the plan’s network
  3. HMO-POS – “Health Maintenance Organization – Point of Service” – while rare, these plans let you go out of the plan’s network, often requiring a referral from a doctor who is in the network.

So, why choose a Medicare Advantage Plan?

Combined Medical and Drug Coverage

Remember the acronym in the first sentence?  Medicare Advantage is the same thing as an “MAPD.”  That stands for Medicare Advantage Prescription Drug.  By far the biggest reason people enroll in these plans is because they get their medical coverage and their prescription drug coverage all in one plan, with one company.  It doesn’t matter if you’re at the pharmacy, in your doctors office or at the hospital; one card in your wallet is all you need.

Premiums Are Inexpensive (or $0!)

The number of plans available to you varies depending on where you live.  Cities get more choices, rural areas only a few.  Generally, the availability of these plans increase where there are more people in a geographic area who have Medicare.  For most of you, there are usually multiple insurance companies in your area offering $0 premium MAPD HMO plans.  They can afford to not charge you a premium, because they’re getting reimbursed from the government for your care and prescription drugs.  You can usually find HMO plans with better benefits for an additional premium ranging between $19-$40 per month.  PPO plans are available too, although typically there are fewer options and they’re more expensive at $30-$150 per month, depending on the plan.

Limit Out-of-Pocket Costs

Original Medicare Part A and Part B have significant drawbacks to them, and never cap the amount of money you can potentially spend should you get really sick.  Click here for a post I wrote a while back on this subject.  MAPD plans have a feature called the MOOP.  MOOP stands for Maximum Out OPocket.  Medicare mandates MAPD plans pay 100% of your medical care after a maximum of $6,700 out of your pocket in a calendar year.  Many plans have a lower MOOP and this is a KEY factor you should be shopping for, by the way.  The lower the MOOP, the better for you.

Low Co-pays for Doctor Visits and Prescriptions

Medicare Advantage insurance companies want you to see your primary care physician, and as soon as possible.  While that might not make much sense on the surface, it does if you have a medical condition.  If you have a medical condition and the doctor notes it in his or her chart, the insurance company can file for additional reimbursement from the government for your care.  Good for them.  All this really means to you is your doctor copays on a Medicare Advantage are low (usually $5-20 per visit, sometimes $0!).  Insurance companies also want to make sure you’re taking your prescriptions.  That’s right!  If you don’t, they get dinged in the wallet by the government in a variety of ways.  That’s why prescription drug copays are generally less expensive on MAPD plans than they are on Medicare Part D (PDP) plans.

Extra Benefits Not Offered by Medicare

The government allows Medicare Advantage plans to offer some bells and whistles to their plans to sweeten the deal for potential buyers.  Many, but not all plans offer built-in dental coverage, vision insurance, hearing aid coverage and even an over-the-counter purchasing allowance.  You get none of those items I just mentioned on Original Medicare, Part D or a Medicare Supplement plan.  If you were actually able to find a dental plan to purchase outside of an MAPD plan, I’d a) be amazed and B) tell you not to buy it because it’s not worth the money.  More on that in another post.

There you have it.  Four pretty good reasons to elect a MAPD plan for your Medicare coverage… low (or no) premiums, a limit on your yearly financial exposure, low co-pays for doctors and prescriptions and some dental, vision and other “freebies” thrown in for good measure.

Will Your Medicare Coverage Travel with You?

Summertime means the beach, BBQ and travel.  Will your Medicare coverage travel with you?  Should you buy a travel insurance policy before going overseas?  What if you have a Medicare Advantage plan?

The answer: It depends.

If you’re on original Medicare (not a Medicare Advantage plan), travel throughout the 50 states and US territories (District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa) means your health care is covered just like it is at home, no problems.  If you have a Medicare Advantage plan, traveling overseas, and even traveling away from home within our 50 states gets trickier.  More on that below.

The Medicare website on travel offers an easy explanation that isn’t 100% complete, nor does it do a very good job of highlighting when you’re not covered while traveling.   I’ve pasted and excerpt from the webpage below for your convenience.

Medicare may pay for inpatient hospital, doctor, ambulance services, or dialysis you get in a foreign country in these rare cases:

You’re in the US when a medical emergency occurs, and the foreign hospital is closer than the nearest US hospital that can treat your medical condition.
You’re traveling through Canada without unreasonable delay by the most direct route between Alaska and another state when a medical emergency occurs, and the Canadian hospital is closer than the nearest US hospital that can treat the emergency.
You live in the US and the foreign hospital is closer to your home than the nearest US hospital that can treat your medical condition, regardless of whether an emergency exists.
In some cases, Medicare Part B (Medical Insurance) may cover medically necessary health care services you get on board a ship within the territorial waters adjoining the land areas of the US Medicare won’t pay for health care services you get when a ship is more than 6 hours away from a US port.

Medicare drug plans don’t cover prescription drugs you buy outside the US

Will My Medicare Part D Card Work?

Ooh, there’s a zinger right there at the end!  Did you miss it?  Here it is again:  Medicare drug plans don’t cover prescription drugs you buy outside the US.

Prescription drugs purchased overseas are never covered by Medicare Part D. Huh.  That means your PDP plan is worthless overseas.  Better stock up before you go. I must say, it’s also interesting to see if you go on a cruise, you better only get sick if you’re close to the US or one of its territories.  It also makes no mention of what happens if you have a Medicare Advantage plan.  Here’s one more item of note from the site.

Foreign hospitals aren’t required to file Medicare claims. If you’re admitted to a foreign hospital under one of the situations above, and if that hospital doesn’t submit Medicare claims for you, you need to submit an itemized bill to Medicare for your doctor, inpatient, and ambulance services.

This is a nice way of saying if you get sick overseas, you’ll very likely have to pay, either with cash or credit card for your health care at the time of service.  You’ll then have to take all of the paperwork home with you, and fill out gobs of Medicare paperwork.  Look, they make it easy for you on their website! (Heavy sarcasm here, folks)  There are only potentially NINE forms you need to fill out.  If you want your son or daughter to help out, they need to fill out a form, too.   You better do it right as you get home; if you wait 12 months you’re out of luck.

What If I have a Medicare Advantage Plan?

So, I’ve teased it twice already; what do you do if you have a Medicare Advantage plan?  First of all, if you’re on an HMO, you may be out of luck if you get sick even in the next county over from you.  An MAPD HMO plan has a defined service area (usually by county) and there are ZERO out of network benefits.  If you have an HMO and live in Sarasota, forget getting routine care while on your visit the kids in Denver.  Oh sure, there’s emergency care… if you’re admitted, if you’re in an ambulance, etc. In all seriousness, aside from what the government mandates HMO plans include in their coverage, most do NOT have travel coverage.  To get the skinny, you need to pull out your Summary of Benefits booklet that came with your policy, or call the company and ask.

If you have a Medicare Advantage PPO plan, those by nature DO have out of network coverage if you’re travelling out of your service area in the US.  Often it’s way, way less than you enjoy in the network, but at least it’s there.  They also must have out of pocket limits so you won’t go broke if you get really sick on vacation and need to be in the hospital for a long time.  However, that does NOT mean you have overseas coverage.  To find out, you need to look at your Summary of Benefits or call the company.

Some Medicare Advantage companies tack on an additional feature to their plans to include some sort of travel insurance.  Most do not.

The Takeaway

We know by now there are restrictions on getting medical care overseas if you’re on Medicare, and can be even more if you’re on a Medicare Advantage plan.  Your Medicare Part D plan will not work overseas. What are your options?  Buy overseas travel medical insurance if you have an MAPD plan that does not cover it, or are on Original Medicare only.

If you have a Medicare Supplement plan you are in luck, my friend.  Medicare Supplement (Medigap) Plans C, D, F, G, M, and N provide foreign travel emergency health care coverage when you travel outside the US and  Plans C, D, E, F, G, H, I, J, M, and N pay 80% of the billed charges for certain medically necessary emergency care outside the U.S. after you meet a $250 deductible for the year. These Medigap policies cover foreign travel emergency care if it begins during the first 60 days of your trip, and if Medicare doesn’t otherwise cover the care.

Be safe out there!

Should I Stick With Original Medicare?

Choosing a Medicare plan isn’t a once-in-a-lifetime experience, it’s something you really need to be doing every year.  Just as your financial situation, health and even living arrangements change, so do the benefits and premiums of Medicare insurance policies.  Hopefully, this post will give you some things to think about if you’re considering staying on original Medicare for your hospital and doctor coverage.  This is known as, “Going Bare with Medicare.”  Future posts will provide an overview of hospital and doctor coverage when considering Medicare Supplement and Medicare Advantage plans, and when they’re up I’ll link them in blue.

Protect Your Savings!

At its core, any insurance product should really serve one primary purpose:  Provide you financial protection against exposure to high-dollar claims. Think about your car insurance… no one in their right mind has a $250 or even a $500 deductible anymore… and if you do, you’re paying entirely too much for car insurance!  The days of first dollar insurance coverage, especially in the health insurance field are long, long gone.  Just look at the Affordable Care Act (ACA) plans that were rolled out a few years back.  The average (annual!) deductible for an individual in 2016 is now over $5,700 and more than $11,000 for a family!   I wouldn’t be alone in arguing that those deductible levels are borderline insane, but the point remains; first dollar coverage is over!

Anyway, back to the point of the article.  Staying, “Bare with Medicare” isn’t a bad way to go… and about 20% of the population who have Medicare don’t have any additional coverage.  It’s true Original Medicare (parts A and B) works for a lot of people, but it also has plenty of gaps… gaps that could expose you to high-dollar claims, however unlikely.  Let’s review a few of them.

You Need a MOOP

First of all, Original Medicare has deductibles and coinsurance, and no MOOP.  By far my favorite acronym, the MOOP stands for “Maximum Out Of Pocket.”  That’s a fancy way of saying under Original Medicare, you have no annual or lifetime cap on how much you’ll pay for healthcare.  Once you meet your Part A and Part B deducible (every year, BTW), then you’ll pay coinsurance (a percentage of all additional charges) up to…. well, forever.  There’s no MOOP!  On the other hand, all Medicare Advantage plans must have a MOOP, and none have one higher than $6,700 annually in 2016 (More on those plans in Choosing a Medicare Plan Part 3).

Let’s say you’re hospitalized and have Original Medicare A and B only.  In 2016, you’ll first pay a deductible of $1,288.  As long as you’re not in the hospital for more than 60 days, you’re all set.  However beginning day 61 through day 90 you’ll pay an additional $304 per day.  If you do the quick math, a 90 day hospital stay will cost you a minimum of your $1,288 deductible, plus 30 days X $304 ($9,120) = $10,408!!!

That’s huge.  How likely is it you’re in the hospital for 90 days?  Highly unlikely.  More likely is a) you’ll be dead or b) you’ll be moved out to a nursing home or a Skilled Nursing Facility (SNF).  Not trying to be morbid, just realistic.

If we assume you end up in a Skilled Nursing Facility, then Medicare will cover your stay at 100% for days 1-20.  Days 21-100 will cost you $152 per day in 2016.  The price tag for a (SNF) stay that lasts exactly 100 days is $12,008!   Anything longer for 100 days, and you’ll be picking up 20% of the entire tab for every day you’re in the facility.   Once again, there’s no MOOP!

Worst-case scenario: If you’re in the hospital for exactly 90 days, then get moved into a Skilled Nursing Facility, stay there for 100 days, you’ll have a bill totaling $22,416!

Going back to our original premise, first and foremost insurance should provide you financial protection.  How much financial protection is up to your personal risk tolerance, health status and thickness of your wallet. I think it’s safe to say most people shouldn’t be purchasing super-rich insurance products that offer first dollar coverage.  That is of course unless you simply like the peace of mind giving all of your money to insurance companies for first dollar coverage instead of keeping it in your own wallet!

Not Covered Under Original Medicare A and B:

  1. Routine eye exams & glasses (except after cataract surgery, but who wants that?)
  2. Dental insurance & dentures
  3. Outpatient prescription drugs prescribed by your doctor (Part D covers this)
  4. Gym memberships or fitness classes
  5. Weight management programs
  6. Routing hearing tests
  7. Custodial care (help with bathing, dressing, using the bathroom & eating) at home or in a nursing home
  8. Long-term care (fancy phrase for nursing homes and in-home assisted living)
  9. Acupuncture
  10. Cosmetic Surgery
  11. Most chiropractic services
  12. Most care while traveling outside the United States

The Takeaway

Going “Bare with Medicare” isn’t for everyone, but it’s a fine solution that has worked literally for hundreds of thousands of Medicare beneficiaries since 1966!  Odds are that you’ll never come close to being in the hospital for more than 60 days in any one stay, and it’s highly unlikely you’ll be in a Skilled Nursing Facility for more than 20 days.   I’ve highlighted a few worse-case scenarios, but the real problem is the fact Original Medicare has, you guessed it, no MOOP!  And that’s precisely the reason you’re probably better off served by purchasing some type of supplemental policy or Medicare Advantage plan that offers an annual MOOP limit.

Readers, what’s been your experience going “Bare with Medicare?”

Mid-year Formulary Changes

While it’s true that companies selling Medicare Part D plans can’t raise their premiums mid-year, sometimes things can happen that affect the level of coverage you’re getting from.  One of those is called a mid-year negative formulary change.

A “negative formulary change” happens when a Medicare insurance company changes what prescriptions are covered and how much they’ll cost you, right in the middle of the plan year!

Can they do this?  Sure can, and happens all the time.  If this happens to one of the prescriptions you take, you’ll get a nice little letter from your insurance company telling you what’s happening, and why.  You’ll usually get notified at least 60 days before the change is made.  Common changes your insurance company can make mid-year are:

  1. Remove the prescription  from the formulary because it was removed from the market
  2. Stop covering a prescription because Medicare decided to stop paying for it
  3. The insurance company placing quantity limits on the drug (usually due to high cost, or potential for abuse)
  4. Mandating prior authorization (which means special permission needs to be granted in order for you to fill your prescription)
  5. Moving prescriptions in a higher Tier (more expensive for you)

Let’s say you have a Medicare Part D plan who makes a negative formulary change to one of your prescriptions.  Well, next time you fill that prescriptions, insurance companies are required to send a written notice to you within 3 business days of the fill, explaining that in the future, you’ll have to contact your doctor for a different prescription.

How can they do this?  Well, it’s complicated, but I’ll summarize: Every year, plans new and old begin discussing the plans, prices and benefits they’re going to offer the upcoming year around February.  That’s right! Mere weeks after the Annual Election Period (AEP) ends, companies begin to plan for the following year.  From there, companies on their bids which they submit to Medicare around June/July for the following January.  Insurance companies must bid each year, and if they’re approved to offer Medicare Part D, they only have permission from Medicare for the upcoming calendar year.  As a part of this bid, these companies must tell Medicare what drugs they’re going to cover, what benefits they’re going to offer (copay tiers, etc.) and how much monthly premium their plans are going to cost you, the consumer.  Once Medicare accepts an insurance company’s bid, the company is locked into those prices and benefits for the entire year.  Likewise, once you pick a Medicare Part D plan during the AEP, you’re usually stuck with it for a year.

What are your options if this happens to you?  Well, for one, you should call your doctor and ask him or her to switch your prescription to something else that is on the formulary.  That’s by far the easiest solution. If you’ve tried everything else and really need to keep that prescription going, you can call your insurance company and request an exception be made.  The process is long and tedious and yes, there are lots of forms to fill out and phone calls to sit on.  If that’s your thing, or you for some reason really need the particular prescription that’s being affected, then by all means please travel down this path.

But at Prepare for Medicare, we strive to simplify Medicare, so your best bet is to get your doctor to find an alternative prescription, or simply pay for it out of your own pocket until the fall.  Then, vote with your feet!  AEP begins October 15.  Grab your prescriptions, head on over to Medicare.gov and find a new Medicare Part D drug plan that meets your needs.