Wednesday, December 26, 2018
Enrolling in Medicare and/or a Medicare Health Plan
Recently received a two-part question, which I am commenting on today.
First: I will be eligible for Medicare soon and would like to know what the options are for enrolling?
Second: You have been saying it is important to buy coverage for the part of covered treatment expenses Medicare does not pay. When can this be done and can I change this coverage later?
Medicare and a Medicare Health Plan are two separate kinds of coverage managed by two federal agencies, There is often confusion on enrollment since there are different enrollment rules for each.
The first Question is about Medicare the federal level medical insurance program. A person normally becomes eligible when they reach age 65. Individuals under 65 who have qualified for Social Security disability benefits for 24 months also become eligible.
Note: Enrollment during any of the following eligibility periods is processed by Social Security, not by Medicare.
Initial Eligibility Period (IEP): A person qualifies for this upon reaching 65 and it lasts for 7 months. They can then sign up during:
● Any of the three months before the month of eligibility (become 65) If they select one of these months their Medicare coverage would be effective the first of the month they are 65.
● The month they are 65 and coverage will be effective on the first day of the next month.
● Either of the three months after eligibility. Doing this results in different coverage dates:
+ Enroll one month after 65 – first day of second month after the person enrolls.
+ Enroll two or three months after 65 – first day of the third month after they enroll.
A Special Enrollment Period (SEP). In a situation where a person continued to work after age 65 and then decided to enroll, they qualify for an up to 8 month SEP to sign up. They should call their Local Social Security office and make an appointment with a Retirement person to enroll in Medicare. Doing this when still on an employer plan or during the first month after leaving the group plan means:
● Coverage begins the first day of the month they enroll or
● They can select to enroll the first of any of the following three monthst.
Couple special things to be aware of when eligible for a SEP:
● The SS system will set up their Part A coverage retroactive six months.
● During the appointment ask for Form CMS-L564. Take it to your employer to fill in the dates you were covered on the company medical benefit plan. When it's signed take it back to the SS office. This form qualifies you for the SEP and means you avoid Part B’s late enrollment penalty which adds 10% to the cost of Part B.
A General Enrollment Period. If a person did not enroll during the IEP period or the SEP they will have to wait to enroll in Part B. This could and has happened when a person left employment and elected to continue the group plan coverage with COBRA. In this situation when COBRA ends they have to wait to enroll in Medicare Part B between January 1st and March 31st. Coverage, however, would not start until July 1st. A person in this situation can enroll in a stand-alone Prescription Drug Plan but would not have any coverage for the 20% of outpatient expenses Medicare does not pay.
The second Question is about selecting an insurance plan to pay the part of treatment expenses Medicare does not pay. A person can request enrollment in one of two kinds of what I like to call a Medicare Health Plan. Both types are purchased from a private company:
A Medicare Supplement: A person who selects this type can receive treatment from any provider in any state who agreed to participate with Medicare and thus accept the reduced level of payment on any approved treatment/service they provide. Medicare normally just pays them 80% of the approved amount.
● Medicare Supplement plans, sometimes call a MediGap plan, are approved for use in CT by the state Insurance Department and a person can (normally) enroll/change their plan any time for coverage the 1st of the next month.
● These plans have “lettered” names. A has the least coverage, B, C. etc have more. Use of letters can be confusing since the part of Medicare also have letter names.
● Any Supplement with the same letter from any of the approved companies has identical coverage. However, there can be considerable variation in the monthly cost companies charge for their plan here in CT. CT’s DOI approves plan cost.
A Medicare Advantage Plan: A Medicare Advantage Plan (MA) is purchased from a private company and covers, as a minimum, everything MediCare does plus additional benefits. A couple points on MA plans:
● A MA company has a yearly contract with Medicare, is paid a fixed monthly payment for each person who enrolls, and administers all the medical treatment a person receives. Coordinating coverage can result in better outcomes. Plans usually include medications and are then call a MAPD. Individuals usually pay a monthly cost.
● Plans cover additional benefits such as an annual physical (Medicare does not ) and usually offer discounts on or options to buy benefits, such as fitness, dental, vision, and hearing not in original MediCare.
● All treatment is received from providers in the companies network.
● Availability is based on the County you live in. Some MA companies have plans in CT but do not offer all options or any in New London County.
If an individual is interested in a Medicare Advantage plan there are different election periods. Medicare has assigned the following priority to these periods:
● The Initial Coverage Election Period (ICEP). This occurs when a person is first eligible for Medicare. They can elect a Medicare Advantage (MA) plan or a MA plan with prescription coverage (MAPD).
Note: There is also an enrollment period at the same time called an Initial Enrollment Period for the person who wants to stay on original Medicare and buy a stand-alone Prescription Drug Plan
● The Medicare Advantage Open Enrollment Period (MA OEP) This option will again be available for 2019. It occurs from January 1st to March 31st and allows a person who was dissatisfied for some reason with their current Medicare Advantage (MA) plan to make a change. They can elect a new MA or return to original Medicare and select a stand-alone Prescription Drug Plan.
● Special Election Periods (SEP) These are for different kinds of situations such as moved to a different state.
● The Annual Election Period (AEP). A period each year in the fall to change coverage for January 1st. This is currently October 15th to December 7th.
● The Open Enrollment Period for Institutionalized Individuals (OEPI) A special period for an individual who is entering or leaving a long-term care facility.
Call today if any questions on enrolling in MediCare or about the Medicare Health Plans.
John C Parker, RHU, LTCP
Niantic - cell/text (860) 662-3000