Things to Do Before End of the Year: Medicare Options (NY Times)

October 31, 2009
Patient Money
Now Is the Time to Weigh Medicare Options
By WALECIA KONRAD
MEDICARE recipients, it’s your turn.

For the last few weeks, my Patient Money colleague Lesley Alderman and I have been giving advice on how to navigate the open enrollment season for employee health benefits. But Medicare enrollees must also do this annual drill, and in some ways their task can be more complicated.

While employees now typically face a dwindling number of options, Medicare recipients may have the opposite problem — a potentially overwhelming welter of choices. They may need to sort through dozens, even hundreds, of choices during the annual enrollment period, which runs Nov. 15 through Dec. 31.
Those already enrolled in Medicare, of course, might not need to do anything. Assuming the coverage they have now is not changing, and it’s working for them, they can probably stand pat. That might be particularly true for the 35 million people whose main coverage comes directly through the government. In that case all they may need to worry about is their Medicare D prescription drug plans provided by private insurers, if they have such coverage; about 17.5 million of these people in traditional Medicare have the separate drug coverage.

But as I explain below, there are various reasons that staying put might not be a good idea. And making a change means coming to grips with an array of Medicare options that has been expanding at a bewildering rate in the past decade.

There is the traditional Medicare A, which covers hospitalizations and is provided at no charge to enrollees, and Medicare B, which covers fees from doctors and other health care providers and requires a monthly premium. (Because there will be no Social Security cost-of-living increase in 2010, premiums for most current B enrollees will stay the same as for 2009, at $96.40 a month. However, most new enrollees will pay 15 percent more than that, $110.50 a month.
Seniors can also choose from a vast number of specialized plans from private insurers. There’s the Medicare D drug coverage, for example. But there are also fuller private-carrier packages called Medicare Advantage, which often bundle Medicare A and B with a drug plan, along with extra benefits like dental, vision and wellness coverage.
Each annual enrollment season you can change from traditional Medicare to a Medicare Advantage plan or vice versa. You can also add, change or drop a Medicare D plan. Keep in mind if you don’t sign up for Medicare D when you are eligible and you don’t have other creditable prescription drug coverage, you will be assessed a 1 percent penalty per month if and when you do sign up. This year’s annual Medicare enrollment period may be particularly tricky for some people. Because there are so many Medicare Advantage options available, the Center for Medicare and Medicaid Services — the agency that runs Medicare — eliminated about 18 percent of the Advantage plans, either because they were similar to other plans offered by the same company or they had very few members. (Even with those cuts, thousands of other Advantage plans still exist.)

As a result, an estimated 600,000 Medicare recipients must change plans this year because their former Advantage plans will no longer exist, according to data from Allsup, a provider of Social Security and Medicare consultation services based in Belleville, Ill.

If you’re new to Medicare this year you can find advice for first-time enrollees in an article I wrote recently for this newspaper: “Nearly 65? Time for the Medicare Maze.” ***see below

If you are already enrolled in Medicare, you’ll be receiving your copy of the 2010 “Medicare and You” handbook any day now. This government booklet will explain changes in this year’s enrollment period and provide information on different Medicare alternatives. Start your research by taking a close look at that publication, but do consider the following, too:

IS STANDING PAT AN OPTION? Determine if your existing plan is still available — and still right for you.

If you are a member of one of the private Medicare Advantage plans that has been eliminated, you should have received a notice from your insurer by now. If you have any doubts, call your insurer.

If you do nothing and your plan is eliminated, you will automatically be enrolled in traditional, government-provided Medicare A and B plans. But you will not be enrolled in a prescription drug plan and will have to do that separately through a private insurer during the Nov. 15-Dec. 31 enrollment period.

But even if your current plan will continue, you may also be ready to make a switch. If you’ve experienced any changes in your health or financial situation in the past year, it’s a good idea to sit down and take a close look at your existing plan. You may find your Medicare choice has out-of-pocket costs you can no longer afford.

Traditional Medicare can get expensive, with the monthly premiums, as well as a $1,000 deductible for hospitalizations and 20 percent co-payments for most doctor visits. With some Medicare Advantage plans you can lower those costs, says Paul Gada, Allsup’s personal financial planning director. (Some people also choose to buy a Medigap or supplemental policy to fill in what traditional Medicare doesn’t cover. See the recent Times article “Choosing a Policy to Cover What Medicare Doesn’t.”

On the other hand, if you’ve become sick, you may find you need more reliable and flexible coverage than your current plan provides. Most Medicare Advantage plans work on an H.M.O. or P.P.O. network system, so going to a doctor out of network can be difficult or more expensive. But almost all health care providers take plain old Medicare, says Judith Stein, founder of the Center for Medicare Advocacy, a nonprofit patients advisory group. That makes “traditional Medicare the most flexible option out there,” Ms. Stein said.

PICKING A NEW PLAN You’ll need to compare your options. That usually entails weighing prices and coverage for the Medicare Advantage plans offered in your area — to one another and to traditional Medicare.

In most cases, you’ll want to compare competing Medicare D drug plans as well. With these, you’ll want to look at price as well as which drugs are covered. Always make sure that the drugs you use will be covered by the plan you choose. Medicare D plans change the list of covered drugs from year to year, so it pays to call the insurer directly to check.

By now you’ve probably gotten an onslaught of mail from insurers that offer Medicare Advantage and Medicare D plans in your area.

“Companies are allowed to start marketing for the annual enrollment period on Oct. 1,” says Seemin Pasha, director of policy and communication at Health Assistance Partnership, a privately financed project of the Families USA consumer advocacy group. “But sifting through all these materials can be confusing.”

For help, log onto Medicare .gov. Along with lots of clear information, the site offers tools that will help you find private insurer plans in your area and help you compare prices and coverage.

You can also call or visit your State Health Insurance Assistance Program, known as SHIP, which is run by the government. Counselors provide information and help you compare plans without charge. To find the SHIP office in your state, go to www.hapnetwork.org/ship-locator. That office will refer you to the location in your county. Or call your local agency on aging and ask for a SHIP location near you.

For-profit companies like Allsup, for a fee, will help clients navigate the system and enroll in the plan of their choice. At Allsup, a range of services is available for about $200.

DON’T DELAY Try to sign up for your new coverage by early December, especially if you are choosing a plan with a private insurer.

Because the annual enrollment period ends Dec. 31 and coverage starts Jan. 1, late enrollees could experience some snags in the paperwork. Sign up early and you’re more likely to get on the books and get your insurance cards well before the new year starts.

Keep in mind if you do make a mistake or change your mind, the government allows some limited changes during what it calls open enrollment, from Jan. 1 through March 31. During this period you can switch from one Advantage plan to another or switch from an Advantage plan to traditional Medicare and vice versa.

What you can’t do, however, is join or switch a Medicare D plan, unless you already have a plan with prescription drug coverage, according to Medicare.gov. You also may not drop Medicare D coverage during this time.

***
October 15, 2009
Patient Money
Nearly 65? Time for the Medicare Maze
By WALECIA KONRAD
NOW that you’re about to retire, there’s good news and bad news about your health insurance. The good news: When you turn 65, you’re eligible for Medicare — all in all, a pretty affordable way to get coverage for doctor bills, hospitalizations and, more recently, prescription drugs. The bad news: You’ve got a big job ahead of you, sorting through the Medicare bureaucracy.

For someone new to the system, the hundreds of options Medicare provides can be daunting. “We’ve seen C.P.A.’s get stymied,” said Paul Gada, personal financial planning director at Allsup, a provider of Social Security and Medicare consultation services that is based in Belleville, Ill. “The process can be difficult for even the most savvy individuals.”

More important, the choices you make now as a new retiree may have consequences down the line when your health care and financial needs change. Confusing as Medicare may be, it is better to learn the ins and outs of the system early than to try to figure it out 20 years from now. The newly eligible have a seven-month period to enroll, starting three months before their 65th birthday. And numerous resources are available to help both newcomers and veteran Medicare users.

Not long ago, retirees simply went to their local Social Security office and signed up for Medicare A, which covers hospitalization, skilled nursing facilities, hospice and some home health care. Then they signed up for Medicare B, which provides coverage for doctor’s fees for a premium ($96.40 a month in 2009). That was the end of it.
Big changes in the way Medicare is distributed have made signing up a lot more complicated. In addition to A and B, enrollees can now buy prescription drug coverage under Medicare D. Dozens of private insurance plans offer Medicare D coverage, and the plans can differ widely in both premium costs and the drugs they cover.

The government also allowed private insurers to offer Medicare Advantage plans, which combine A, B and D benefits, often under a network like an H.M.O. or P.P.O. Many offer extras like dental, vision and wellness coverage. Hundreds of different Medicare Advantage plans are sold today, and depending on where you live, you could have dozens of choices.

Options may decrease slightly in 2010, said Marc Steinberg , deputy director for health policy at the health care advocacy group Families USA, because the Center for Medicare and Medicaid Services, the federal agency that administers Medicare, has vowed to consolidate similar plans from the same insurers to help reduce confusion.

In addition, many insurers may decide not to offer Advantage plans if the government subsidies given to these plans are cut, as many of the current health care bills have proposed. Finally, because Medicare deductibles and co-pays are high — a $1,000 deductible for hospitalizations, 20 percent co-pays for most doctor visits — many people elect to buy a Medigap, or supplemental, policy to fill in what Medicare does not cover.
With traditional Medicare and Medicare Advantage, it’s sometimes hard to get a handle on exactly what is covered. Physical therapy, for instance, is covered under traditional Medicare only if your doctor prescribes it and then only for a limited time. Traditional Medicare with a Part D and Medigap plan offers the most flexibility, said Judith Stein, founder of the Center for Medicare Advocacy. Because most health care providers throughout the country accept Medicare, there’s usually no need to change doctors when you join the system. “In addition, you have access to whatever specialists you’ll need, and you’re covered no matter where you are in the country,” she said.

Most Medicare Advantage plans, however, work on a network system, so going to a doctor out of network can be difficult or more expensive. And, because of the extra coverage, Medicare Advantage premiums are often higher than those for traditional Medicare, or coverage is restricted in other ways, like low limits on lifetime coverage, Ms. Stein said.
On the other hand, Mr. Gada said that a good Medicare Advantage plan could make the process of enrolling much easier. “It’s one-stop shopping for Medicare’s alphabet soup of plans,” he said. And for some people, the extra dental and vision benefits are extremely important, he added.

For help finding and comparing Medicare Advantage and Medicare D plans offered by private insurers, go to the government-run Web site www.medicare.gov. The site has clear and useful information and offers a tool that will help you compare costs and coverage among the various plans offered in your region.

But the tool is far from comprehensive, so you’ll probably still have questions, both about the system and what’s best for your needs. To get free answers, try your State Health Insurance Assistance Program, known as SHIP. Counselors provide information about traditional Medicare, help you find D and Advantage plans that fit your needs, and help you compare plan costs. To find the SHIP office in your state, go to www.hapnetwork.org/ship-locator. That office will refer you to the location in your county. Or call your local agency on aging and ask for a SHIP location near you.

For-profit companies like Allsup will, for a fee, help clients navigate the system, help them enroll and often offer customized advice on related health and financial matters like long-term care insurance. A range of services is available for about $200.

Medicare recipients can change plans each year during the open enrollment period, Nov. 15 through Dec. 31. So if you end up with a Part D or Medicare Advantage plan you do not like, or if your health or financial picture changes, you can take action at that time.

BUT there are some moves you may make now that will have financial consequences later. If you opt for traditional Medicare, for example, but do not sign up for Medicare B (perhaps to avoid paying the premiums) and you do not have qualified alternative insurance like retirement benefits from your employer, you will pay a financial penalty if you enroll down the line — 10 percent for each year you do not have coverage. Many Medigap plans also charge higher premiums or exclude pre-existing conditions if applicants do not sign up when they first become eligible for Medicare enrollment.

All Medicare D prescription drug plans include the dreaded doughnut hole. You fall into it when your total annual drug costs hit a certain amount — $2,830 for 2010 — and you then must pay the next $3,610 out of your own pocket. After you have paid that amount, the insurer will pick up all but 5 percent of the prescriptions it covers; you pay the balance.

To make sure you are not hit with any further surprises, always check to see if the plan you choose covers the drugs you currently need. You can check on Medicare.gov, but it’s also worth calling the insurer directly. “Insurance companies change their list of approved drugs all the time, so it pays to make sure you’re covered, especially if you take certain medicines regularly,” said Seemin Pasha, director of policy and communication at Health Assistance Partnership, the privately financed project of Families USA.

And always check the list of approved pharmacies, Mr. Steinberg advises. “This isn’t such a problem in big cities, but in some rural areas, we’ve seen cases where the only pharmacy is 20 minutes away and it’s not on the approved list.”

This article has been revised to reflect the following correction:

Correction: October 17, 2009
An article on Thursday about sorting through Medicare options described incorrectly the Health Assistance Partnership, an advisory service for the public. It is a privately financed project of Families USA; it is not government-run. The article also referred incorrectly to a fee that Allsup Medicare Advisor charges to help clients navigate the Medicare system. The $200 charge covers a range of services, not a single session. And an accompanying picture caption misstated Paul Gada’s role with Allsup. He is the company’s personal financial planning director, not a financial consultant.