Medicare Enrollment Is Underway! Here Is All You Need To Know

Deadline to enroll is Dec. 7, so read up now.

It's that time of year again when we see the airwaves littered with television ads touting participation.

Now, it's not Draft Kings or Fan Duel urging you to play fantasy football. We're talking about the ads for Medicare open enrollment that kicked off Oct. 15 and last until Dec. 7. It's all geared towards supplementing your health care coverage for those with Medicare that covers those 65 and older.

"One concern right now during Medicare open enrollment is there are ads for all kinds of Medicare insurance, and people get confused," says Andy Landis, a Seattle-based author and expert on Medicare. "I know when I'm in my 80s I probably be confused with all this stuff, too."

This includes confusion over which plan you currently have, if you need to pay attention to the ad, and what to do if you're making decisions for aging parents for the first time when it comes to their medical care.

What the ads are primarily showcasing are supplemental coverage beyond traditional Medicare where hospitalization is only covered. The supplemental plans known as Medicare Advantage cover doctor's office services and some drug coverage and are traditionally popular in urban areas where they are many doctor choices.

Some of the ads are for Medigap insurance policies designed to cover all or some of the gaps in Medicare coverage. They tend to be used by older people in rural areas where there are fewer choices than in urban areas.

"If you have a Medigap plan, this open enrollment does not affect you," Landis says. "If you are happy with your coverage, you can just stay where you are. The exception would be if you do have a drug plan --a Medicare Part D drug plan -- it might be time to check that out and make sure it's serving you well because this is open enrollment for the drug portion of your coverage."

If you're on the other pathway and have a Medicare Advantage plan, that means you have a policy from a private company such as a Blue Cross or Blue Shield or an HMO company in your area, Landis says. That covers everything from your doctor to hospitalization additional services as well. Most of them have drug coverage rolled into them, he says.

"Many people say they're trying to help their parents and it doesn't make any sense to me. You're maybe a boomer or you're trying to help mom. You're not on Medicare yourself yet and it's just baffling and here's a way to decode that. You have to understand what mom and dad have now so you can tell that they even have an open enrollment right now. The other way is you're a boomer and a retiree and you're trying to figure out I'm seeing all of these ads, do I need to do anything or can I skip all of this stuff."

If you're on Medicare Advantage plan and it's not stopping and going to be available next year, they will sign you up for next year and you can carry on as you were, Landis says. The same goes for individual insurance on an Obamacare plan where they will just carry you over next year adding on any price increase and coverage changes, he says.

If you're on Medicare and have a Medicare Advantage plan, you might consider changing and do a little bit of shopping right and see if you want to make a change.

The easiest way to shop and compare them and enroll is to go to the Web site and look for the green button that says "find health plans now" and click on that and put in your Zip code, Landis says. You can input medications you take so they can tailor the answers to those medications, and you can put what pharmacies you like, Landis says.

It gives you a list of plans that are available in your Zip code -- plans that fit your criteria and you can do price comparisons and coverage comparisons and you can click for more information, Landis says.

"It's one of these Web sites where you can click to compare three different plans on the same screen," Landis says. "When you get it narrowed down to the one you like, just click to the enroll now button next to that plan's name and signs you up automatically and starts taking the premiums out of your Social Security payment next January. It couldn't be easier. It's like wow. This is the way government should work."

If you don't do anything with your existing policy and the price changes, you have to pay it, Landis says. That makes it beneficial to comparison shop online, he says.

"A lot of those Medicare Advantage plans are zero premium, which is amazing that you get all of this supplemental coverage for free because Medicare pays the Advantage plan directly."

Currently, the monthly premium for Medicare is $104.90 a month. That's for the Part B section of Medicare that covers doctor's services, which aren't covered under the Medicare taxes you've been paying for your entire working life, Landis says.

For those boomers helping their parents, Landis says one great tip in helping them is understanding that most of people from their parent's generation have traditional Medicare plus Medigap plans. They would have signed up for drug plans in the last five-plus years, he says.

"That drug plan may not be the right now for them," Landis says. "They don't want to go through the process of changing it but you can help them with that. You can go on the Web site and type of the most expensive drugs in their medicine cabinet and it will give you a list of plans in your parent's Zip code that cover those. They may have set this up five, six to eight years ago and they haven't changed it since then but their prescriptions have changed. That's a great opportunity to get them coverage that better aims at prescriptions that actually take and will save them in some cases hundreds of dollars a month by making sure they're targeting the right prescription. It's a very quick ask for your parents especially if you're there visiting them."

As for those on Medigap plans, Landis says different states have different rules of when you can change those. Some allow it on birth months and others allow it to be done any month. You need to investigate that to find out the answer, but it's not tied to the open enrollment, he says.

For anyone who is approaching Medicare age of 65, the ads may be a reason to start investing what coverage you're going to have when you're eligible, Landis says.

"If you are a year or two away - I'm 63-and-a-half - I'm a year-and-half away from Medicare and I'm counting the months because I'll get better coverage," Landis says. "It might be a good time to type your data in the Web site to do a little pre-shopping to get a feel what it's going to feel like when you hit 65 and understand the territory. I would do some scouting."

There are some helpful hints for those signing up for Medicare supplement insurance coverage for the first time.

Medicare Advantage plans start at zero premiums. The reason they do that is because Medicare pays them every month for everybody they enroll, Landis says. In an urban area. People can opt into several zero premium Medicare Advantage plans or pay $100 to $150 a month more for fancier plans.

Medigap plans, meanwhile, start at $30 a month for the inexpensive ones and run up to about $250 a month for the Cadillac plans, Landis says. In addition, those on Medigap plans need prescription drug coverage that costs on average from $35 to $50 a month, but can range between $10 and $100 a month.

While Medigap plans can be more expensive than Medicare Advantage plans, people have their reasons for choosing them, Landis says. He compared Medicare Advantage to the systems of our parents in which the TV and stereo where combined into one piece of furniture. The Medigap plans are more like a system where you can specify what you do want in terms of drug coverage and medical coverage, he says.

"You build a component system with the best examples from each," Landis says. "Let's say I need a specialty drug for a neurological disorder. The Medicare Advantage packages might be nice, but none of them covers that drug very well. I would pay a lot of out of pocket. But if I go to Medicare Part D drug plans available, I may have found I'm better off specifying those plans."

If you go the Medigap route, any doctor that takes Medicare in any state would work, Landis says.  If you take a Medicare Advantage plan, the downside is it's going to have a list of doctors that's in network. If you don't like their network, you may be better off going to Medigap, he says.

As for Medicare Advantage, by law it has to cover everything Medicare A and B covers, but it has additional coverage. That includes drug coverage, dental, vision, hearing and out-of-pocket maximums that neither Medicare nor most of Medigap policies have, Landis says.

By cost standards, Part B coverage is inexpensive because most people by paying only $104.90 a month are paying for 25 percent of its cost, Landis says. The rest, which amounts to $312, is covered by a government subsidy that comes from general tax revenues collected by the government.

While Obamacare provides subsidies to people below certain income thresholds, all income brackets receive a subsidy for coverage of doctor's services under Medicare. Higher-income people, however, are required to pay more than the $104.90 a month.

The threshold for that is income more than $85,000 a year for an individual and $170,000 for a couple, Landis says. If you're over that, there's a sliding scale for monthly premiums that increases to $146.90 a month, $209.80 a month, $272.70 a month and as high as $335.70 per month per person. That top monthly premium is for individuals who earn more than $214,000 or couples who earn more than $428,000.

The reason the government requires people join Medicare at 65 if they don't have insurance through work comes down to insurance pools, Landis says. If you're running an insurance company, do you want old and sick people in your insurance pool, which makes costs higher or do you want young and healthy people in the pool?, he asks.

"Medicare is thinking we need to get you in when you're younger and healthier or our whole insurance pool--the oldest sickest insurance pool in the whole nation--they don't want the insurance pool to be any more expensive than it already is," Landis says. "Some people postpone it because they don't want to spend the money. They would rather be uninsured until they're sick, and then they want their Medicare."

The reason why many people with insurance through work keep it rather than switch to Medicare is it's likely cheaper and better, Landis says. But's that's not the case for those in the private insurance market until they're eligible for Medicare, he says.

"Even if I was in that high-income bracket, it's much cheaper than what I'm paying now for much worse insurance right now," Landis says. "I'm 63 and counting the months until I'm 65 to get cheaper and better insurance than what I'm on. If I pay $104.90 for Medicare Part B, then buy a Medigap supplement for $50, and I find drug coverage for $50. I'm out $200. That compares to right now to what I'm paying $600 a month for lousy insurance. My deducible is $10,500."

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