Medicare Open Enrollment Is Complicated: Here’s How to Get Good Advice
Surely, you've seen celebrities like Joe Namath pitching 1-800 numbers for fabulous extra Medicare benefits. It's not quite that simple. There are many options, confusing rules and nuances.
If you’ve been watching TV lately, you may have seen actor Danny Glover or Joe Namath, the 77-year-old NFL legend, urging you to call a 1-800 number to get fabulous extra benefits from Medicare.
There are plenty of other Medicare ads, too, many set against a red-white-and-blue background meant to suggest officialdom — though if you stand about a foot from the television screen, you might see the fine print saying they are not endorsed by any government agency.
Rather, they are health insurance agents aggressively vying for a piece of a lucrative market.
This is what Medicare’s annual enrollment period has come to. Beneficiaries — people who are 65 or older, or with long-term disabilities — have until Dec. 7 to join, switch or drop health or drug plans, which take effect Jan. 1. By switching plans, they can potentially save money or get benefits not ordinarily provided by the federal insurance program.
For all its complexity and nearly endless options, Medicare fundamentally boils down to two choices: traditional fee-for-service or the managed care approach of Medicare Advantage.
The right choice for you depends on your financial wherewithal and current health status, and on future health scenarios that are often difficult to foresee and unpleasant to contemplate.
Costs and benefits among the multitude of competing Medicare plans vary widely, and the maze of rules and other details can be overwhelming. Indeed, information overload is part of the reason a majority of the more than 60 million people on Medicare, including over 6 million in California, do not comparison-shop or switch to more suitable plans.
“I’ve been doing it for 33 years and my head still spins,” says Jill Selby, corporate vice president of strategic initiatives and product development at SCAN, a nonprofit that is one of California’s largest purveyors of Medicare managed care, known as Medicare Advantage. “It’s definitely a college course.”
Which explains why airwaves and mailboxes are jammed with all that promotional material from people offering to help you pass the course.
Many are touting Medicare Advantage, which is administered by private health insurers. It might save you money, but not necessarily, and research suggests that, in some cases, it costs the government more than administering traditional Medicare.
But the hard marketing is not necessarily a sign of bad faith. Licensed insurance agents want the nice commission they get when they sign somebody up, but they can also provide valuable information on the bewildering nuances of Medicare.
Industry insiders and outside experts agree most people should not navigate Medicare alone. “It’s just too complicated for the average individual,” says Mark Diel, chief executive officer of California Coverage and Health Initiatives, a statewide association of local outreach and health care enrollment organizations.
However, if you decide to consult with an insurance agent, keep your antenna up. Ask people you trust to recommend agents, or try eHealth or another established online brokerage. Vet any agent you choose by asking questions on the phone.
“Be careful if you feel like the insurance agent is pushing you to make a decision,” says Andrew Shea, senior vice president of marketing at eHealth. And if in doubt, don’t hesitate to get a second opinion, Shea counsels.
You can also talk to a Medicare counselor through one of the State Health Insurance Assistance Programs, which are present in every state. Find your state’s SHIP at www.shiptacenter.org.
The website offers a deep dive into all aspects of Medicare. If you type in your ZIP code, you can see and compare all the Medicare Advantage plans, supplemental insurance plans, known as Medigap, and stand-alone drug (Part D) plans.
The site also shows you quality ratings of the plans, on a five-star scale. And it will display your drug costs under each plan if you type in all your prescriptions. Explore the website before you talk to an insurance agent.
These so-called dual eligibles — about 12 million nationwide — get additional benefits, and in some cases they don’t have to pay Medicare’s monthly medical (Part B) premium, which will be $148.50 in 2021 for most beneficiaries, but higher for people above certain income thresholds.
If you choose traditional Medicare, consider a Medigap supplement if you can afford it. Without it, you’re liable for 20% of your physician and outpatient costs and a hefty hospital deductible, with no cap on how much you pay out of your own pocket. If you need prescription drugs, you’ll probably want a Part D plan.
Medicare Advantage, by contrast, is a one-stop shop. It usually includes a drug benefit in addition to other Medicare benefits, with cost sharing for services and prescriptions that varies from plan to plan. Medicare Advantage plans typically have low to no premiums — aside from the Part B premium that most people pay in either version of Medicare. And they increasingly offer additional benefits, including vision, dental, transportation, meal deliveries and even coverage while traveling abroad.
Beware of the risks, however.
Yes, the traditional Medicare route is generally more expensive upfront if you want to be fully covered. That’s because you pay a monthly premium for a Medigap policy, which can cost $200 or more. Add to that the premium for Part D, estimated to average $41 a month in 2021, according to KFF. (KHN is an editorially independent program of KFF.)
However, Medigap policies will often protect you against large medical bills if you need lots of care.
In some cases, Medicare Advantage could end up being more expensive if you get seriously ill or injured, because copays can quickly add up. They are typically capped each year, but can still cost you thousands of dollars. Advantage plans also typically have more limited provider networks, and the extra benefits they offer can be subject to restrictions.
Over one-third of Medicare beneficiaries nationally are enrolled in Advantage plans.
The main appeal of traditional Medicare is that it doesn’t have the rules and restrictions of managed care.
Dr. Mark Kalish, a retired psychiatrist in San Diego, says he opted for traditional fee-for-service with Medigap and Part D because he didn’t want a “mother may I” plan.
“I’m 69 years old, so heart attacks happen; cancer happens. I want to be able to pick my own doctor and go where I want,” Kalish says. “I’ve done well, so the money isn’t an issue for me.”
Be aware that if you don’t join a Medigap plan during a six-month open enrollment period that begins when you enroll in Medicare Part B, you could be denied coverage for a pre-existing condition if you try to buy one later.
There are a few exceptions to that in federal law, and four states — New York, Massachusetts, Maine, Connecticut — require continuous or yearly access to Medigap coverage regardless of health status.
Make sure you understand the rules and exceptions that apply to you.
Indeed, that is an excellent rule of thumb for all Medicare beneficiaries. Read up and talk to insurance agents and Medicare counselors. Talk to friends, family members, your doctor, your health plan — and other health plans.
When it comes to Medicare, says Erin Trish, associate director of the University of Southern California’s Schaeffer Center for Health Policy and Economics, “it takes a village.”