Walking through the Medicare maze

It’s that time of year again. Medicare Open Enrollment is October 15 – December 7. Those who are turning 65, or have previously enrolled in Medicare programs, will find their mail boxes and email boxes crammed with offers for Medicare Advantage plans, supplemental or Medigap plans, and Part D plans.

What does it all mean?

If you are new to the world of Medicare, it can look like a confusing, challenging morass into which you’d rather not step. But take heart. There’s lots of good help out there, mostly free of charge, to help you find the most appropriate and affordable plans for you, either initially or when reviewing your plans to discover what is changing (and changes there are, almost annually).

Linda Alldredge of Country Financial in Sisters offers a free service to those needing assistance making heads or tails of their choices.

“They’re going to be overwhelmed with paperwork and won’t be able to make sense of it all,” she said.

For those who have already run the gauntlet in previous years and are satisfied with their choices, Alldredge offered, “At the end of the day, if they are satisfied with what they chose, they don’t have to do anything, and their coverage will continue uninterrupted.”

However, because components of plans or health conditions change, it’s a good idea to review your coverage and make sure it still fits your health needs. Alldredge likes to help first-timers, so they get it right from the start.

“Spend time to get it right. That saves a lot of headaches on down the road,” she said.

Let’s take a look at all the options from which to choose.

Medicare Part A: While you are earning a paycheck, your Medicare payroll tax goes toward Part A, so once on Medicare there is no premium for Part A (unless you didn’t pay the payroll tax, then you have a premium). Part A covers an inpatient stay in a hospital, nursing facility, and hospice care. If you are unable to get to a facility, in-home care will be paid for.

Medicare Part B: Services covered include outpatient and physician services, labs, and wellness services. It is the most-used part of Medicare. You have to pay a premium and can have it automatically deducted from your Social Security check. Part B is important to have unless you are still covered by employer-paid insurance. The premium depends on adjusted gross income. To find the current amount for Part B go online to http://medicare.gov/.

Original Medicare (Parts A and B) by itself does not limit (put a cap on) your financial exposure. Large medical costs could create financial hardship.

Part C (Medical Advantage plans HMO, PPO): This is not enhanced Medicare, even though it is often referred to as that. It replaces Original Medicare and is offered by private insurance companies. You pay a monthly premium, although some company’s offer zero monthly premiums. The plan may or may not offer additional coverage for vision, dental, transportation, and other incidentals. Your financial exposure is capped. Costs and all features can change every year. Some plans include Part D prescription drug coverage.

With Part C coverage, you are in a local network so you must use the providers who are part of that network. If you seek medical care outside of your network (another county or state), you are responsible for 100 percent of the charges. With Part C you can lose control of your healthcare decisions — the freedom to be treated where and by whom you choose.

Part D (Prescription drug plans): These are insurance plans designed to cover part or all of the cost for prescription drugs. The coverage period runs from January 1 – December 31 each year. Simply stated, find a well-ranked company (one to five stars) with low premiums where you can use the pharmacy of your choice. But there are lots of factors to take into consideration when choosing the best drug plan for you, like restrictions on quantity limits and step therapy. If it doesn’t work out the way you expected, you can change plans each October 15 – December 7.

There are several ways to obtain Part D. A stand-alone policy (PDP), which is not linked to any other part of Medicare, can be purchased. Each year you can shop for a new policy without making any changes to any other part of Medicare. If you are happy with your plan you need do nothing. It will just roll over, but things change every year so it’s a good idea to make sure your plan still meets your needs. With Medicare Advantage plans, Part D is bundled with the plan (MAPD). You have no choice of carriers and can’t make changes. You also cannot have a stand-alone drug plan with your Medicare Advantage plan.

Each company has its own formulary, which is the list of drugs covered by the company’s plans. Each plan has five tiers or levels of cost sharing based on generic and preferred brand-name drugs and the relationship that the insurance company has with the drug manufacturers. Each plan has different premiums, and different prices for each drug, and may utilize a different network of pharmacies. All insurance companies are regulated to meet certain minimum requirements for drug categories and six protected classes of drugs, but they can each cover different prescriptions and can charge different prices.

Medigap (supplemental): If you have Parts A and B, and can afford it, adding a supplemental policy can help avoid large medical expenses because it puts a cap on charges. These plans are subservient to Medicare A and B. They are offered by a number of private insurance companies but are regulated because these policies are written into Medicare law. There are 10 different plans available, denoted by letters like F, G, and N. Each plan is identical from one company to another in what they offer. The differences are in price and pricing strategies of the companies.

They each have their own premiums depending on the coverage offered and the amount of the deductible. No permission is needed for medical services, so the policy holder has control. If a provider accepts Medicare, they will accept your Medigap insurance. This coverage is especially good at paying the 20 percent that Medicare doesn’t, so you aren’t stuck with paying a big balance.

There is a six-month window to get a supplemental plan of your choice without going through medical underwriting. The window starts the day you enroll in Medicare B and extends for six months. After the six-month window, you can still get a supplemental plan, but you have to get medically qualified. The insurance company looks at your significant medical history, and if it includes serious conditions, you may not be able to get coverage. Many people new to Medicare think, because they are healthy and have low medical expenses, they don’t need a Medigap policy. But as the years pass, serious medical conditions can arise and then you will be unable to qualify.