If you’re one of the 64 million Americans enrolled in Medicare, what you decide in the next two months could make a huge difference in your wallet and your healthcare. Open enrollment, the time for changing plans, runs Oct. 15 -Dec. 7.
“We know from Open Enrollment that a very small percentage actually change,” said Jane Sung, senior strategic policy adviser with AARP.
In fact, 57 percent of recipients don’t even review their coverage annually, reports the Kaiser Family Foundation. That could leave you unable to see your favorite doctor or paying hundreds of dollars more for a vital prescription drug.
“It’s in their interest to take a look at their options,” Sung said.
Here to help you make sense of the various parts of Medicare, know what to choose if you’re soon turning 65 or whether to switch plans if you’re already enrolled, is a primer on the ABCs of Medicare.
Medicare, Part A
Part A, part of Original Medicare, covers hospital visits, hospice and home health care if required to avoid hospitalization.
“Medicare is not long-term care insurance,” said Kathy Sarmiento, liaison for Miami-Dade’s SHINE, an unbiased, federally funded program that helps seniors with Medicare choices.
Long-term care insurance reimburses you for medical care received in your home, a nursing home, an assisted living facility, among other places. The policy is sold separately by insurance companies and you pay the premium, which varies by age, gender and the insurance carrier. On average, a single 65-year-old man will pay $1,700 per year for a policy in 2021, while a 65-year-old single female will pay $2,700, according to MarketWatch.
In terms of Medicare, Part A is free for most people unless you’ve worked and paid Medicare taxes for fewer than 10 years.
Medicare, Part B
Part B, also part of Original Medicare, is outpatient medical insurance.
“It will pay 80 percent of medically necessary expenses, including doctor visits, outpatient surgery, labs, wheelchairs, walkers, oxygen, orthotics and diabetes supplies. It pays 100 percent of preventive services such as a colonoscopy, smoking cessation, mammograms, bone density screenings,” Sarmiento said.
This year, Part B costs $148.50 a month, more if your annual income exceeds $88,000. Costs for 2022 “might be $10-a-month higher. We should hear sometime in mid October,” said Juliette Cubanski, Medicare policy expert with the Kaiser Family Foundation.
Medicare, Part C
Part C, also known as Medicare Advantage, offers bundled plans run by private insurance companies. It includes Part A, Part B, and in Florida, prescription drug coverage.
Medicare Advantage plans cover the same healthcare services as Original Medicare but, in many cases, they offer extras such as dental, vision and hearing coverage and fitness programs.
Many of the plans are set up as Health Maintenance Organizations (HMOs), which means you are restricted to the doctors in the insurance company’s network. That is, unless the plan is a Preferred Provider Organization, or PPO, which gives you the option of going outside the network.
“When you join an Advantage plan, you still pay the $148.50 Part B premium,” Sarmiento said.
In Miami-Dade County, however, the vast majority of Medicare Advantage plans don’t have a monthly premium because the premium you would have paid to Medicare has been transferred over to the insurance company.
Of the 48 Medicare Advantage plans in Miami-Dade, 10 have monthly premiums, Sarmiento said. “The least expensive is $16.10 a month ranging to $105 a month for Humana Choice,” she said. Humana Choice is a PPO plan.
Medicare, Part D
Part D is prescription drug coverage offered by private drug companies and available only for people in Original Medicare.
If you don’t sign up for it when you join Original Medicare because you aren’t taking any prescriptions and then decide you want it later, you will pay a monthly penalty based on the number of months you went without it.
“There are 28 plans in Miami-Dade. We use the medicare.gov plan finder to enter ZIP code, drugs and preferred pharmacy [for a consumer]. It sorts the plans from least expensive to most expensive,” Sarmiento said.
“There’s a deductible period for most part D plans. Once you reach $4,130, there’s a co-payment of 25 percent. Once you reach the catastrophic period of $6,550, you pay either $9.20 or 5 percent of the cost of the drug, whichever is greater,” she added.
According to the Centers for Medicare & Medicaid, the average monthly premium for Part D in 2022 will be $33.
Because Original Medicare has co-pays and deductibles, many people buy a supplement, called Medigap. These, too, go by letters, 10 plans ranging from A to N. Some of the lettered plans, such as C and F, are no longer sold to new enrollees.
“The nice thing about Medigap is that a Plan G in Florida is the same as a Plan G in California,” said Sung, the policy expert with AARP. “The same letter policy offers the exact same coverage, no matter which insurer is offering it. If you identify a specific plan that works for you, it’s easy to shop based on price,” she said.
Medigap costs vary widely based on what the policy covers. “I’ve seen $100, $150, $200 per month. You can get information on different policies on medicare.gov,” Cubanski said.
Medicare vs. Medicare Advantage
In Miami-Dade County, Medicare Advantage is particularly popular, with 67 percent of Medicare-eligible recipients enrolled in these plans, the highest percentage for any county in the country.
While Medicare traditionally has an 80/20 percent cost sharing for Plan B medical services, Medicare Advantage’s cost structure, including deductibles and co-pays, varies from plan to plan.
“Some people look to Medicare Advantage plans to help lower their out-of-pocket costs without having to get a separate Medigap plan. Again they’ll be different based on your own personal needs, but for some people, that 20 percent might add up to a lot,” Sung said.
The catch is, in most cases, doctors you see and hospitals you use in a Medicare Advantage plan have to be in that insurance company’s network, often limited to your home county. Patients with Original Medicare can go anywhere in the United States. Medicare Advantage patients usually need a referral to see a specialist, a requirement that can delay access.
“If you have Original Medicare with a Medigap supplement, you do not need a referral,” said Jim Bodenner, a retired lawyer who volunteers with the National Retiree Legislative Network, a non-partisan organization that advocates for legislation that impacts seniors.
Medicare Advantage “has made financial sense [for South Floridians], but again, there’s the trade-off— a narrower network of providers, limits on the types of specialists you can see. It’s important to remember there’s no free lunch in this world,” Cubanski said.
For a comparison of Original Medicare and Medicare Advantage plans, go to Medicare.gov.
What about traveling outside the country?
If you want coverage when you travel outside the country, you may want to purchase Medigap Plans, D, G, M or N. They pay 80 percent of foreign emergency care during the first 60 days of your trip.
More than 90 percent of Medicare Advantage plans offer vision plans, hearing services, dental benefits and free gym memberships. These services are not currently offered by Original Medicare although cataract surgery is.
“There are active discussions [in Congress] about adding vision, dental and hearing benefits to Medicare. But it does cost money, especially dental benefits,” Cubanski said. ”It would be highly unlikely to see these things being added in 2022,” she said.
Staying or Switching?
So what do you do now? If you’re in your first year of coverage, you can switch from one program to another without needing a medical exam or paying more if you have pre-existing conditions.
”After a year, you can go from Original Medicare to Medicare Advantage, but you can’t go from Medicare Advantage to Original Medicare. It’s not a two-way street,” Cubanski said.
Sung said the open enrollment period is most useful for those enrolled in a Medicare Advantage plan or the Part D prescription drug coverage.
“Some Part D plans change. Some plans have step therapy and price changes and require you to take a generic drug before it will pay for the brand name, some have quantity limits,” Sarmiento said.
Medicare Advantage plans can change which doctors and hospitals are in the network and which drugs they cover and what their co-pays are.
“The best advice is to see whether their plan is going to be making any changes that will affect their out-of-pocket costs and ability to see the same providers for any medical treatment,” Cubanski said.
Sung cautioned, “You will be inundated with advertisements and pitches. Look for independent sources like the Medicare plan finder on medicare.gov. The state’s SHINE program has neutral counseling to guide people through the process.”
Said SHINE’S Sarmiento, “We will walk them thru it. We’re here to be of assistance.”
Getting help in choosing a plan
Medicare – www.medicare.gov/find-a-plan allows you to compare costs and coverage, or call 1-800-MEDICARE (1-800-633-4227).
Social Security – www.ssa.gov or call 1-800-772-1213 to find out more about Medicare.
SHINE – (Serving Health Insurance Needs of Elders) www.floridashine.org can help answer your questions about Medicare. You can make an appointment at a free counseling site, email questions or call 1-800-96ELDER (1-800-963-5337). For Miami-Dade and Monroe residents, call 305-671-6356. The Broward County number is 954-745-9779. Leave a message and a counselor will return your call.