If you're enrolled in Medicare, mark these dates on your calendar: October 15-December 7, 2011. That's Medicare's 2012 Open Enrollment period -- and you should note that it occurs a month earlier this year than in the past. Aside from exceptions made for a few special circumstances, such as moving outside a plan's service area, this is the only period when current enrollees can make coverage changes for the coming calendar year.
Here's a quick primer on how Medicare works:
Eligibility. Medicare provides health care benefits to people age 65 and older and those under 65 with certain disabilities or end-stage renal disease. For most people, the initial enrollment period is the seven-month period that begins three months before the month they turn 65. If you miss that window, you may enroll for the first time between January 1 and March 31 each year, although your coverage won't begin until July 1.
Medicare Options. Medicare offers several plans and coverage options, including:
- Medicare Part A, which covers in-patient hospital, skilled nursing facility and hospice services, as well as home health care. People are usually enrolled automatically upon turning 65 or after having received Social Security disability benefits for 24 months. There's usually no monthly premium.
- Medicare Part B, which covers doctor's services, outpatient care and some preventive services. It's optional and has a monthly premium. Most people are automatically enrolled at the same time they begin Part A coverage, but you can opt out by following instructions accompanying your Medicare card (mailed about three months before your 65th birthday).
- Medicare Part C (Medicare Advantage) plans, which are privately run alternatives to traditional Parts A and B. Structured like HMO or PPO plans, they often include additional benefits such as prescription drugs, dental, vision and wellness programs. Monthly premiums may be higher than regular Part B, but they usually have lower deductibles and copayments; also, they require that you use the plan's provider network.
- Medicare Part D, which covers prescription drugs. It's optional and carries a monthly premium. These privately run plans vary widely in terms of cost, copayments and deductibles and medications covered.
- Medigap. Many people purchase additional Medigap (or Medicare Supplemental) insurance offered by private insurers. It follows strict government coverage guidelines and helps pay for many items not covered by Medicare, including deductibles, copayments and coinsurance.
A few additional considerations:
- With Medicare Parts B and D, you'll often face sizable penalty fees if you don't enroll when first becoming eligible; however, if you're currently covered by an employer's plan you can later enroll without penalty. Also, if your Medicare Advantage plan includes drug coverage, you don't need Part D.
- Terms of Medicare Advantage and Part D Prescription Drug plans such as premiums, copayments and which drugs are covered can change from year to year, so carefully review enrollment materials from your current plans to make sure they still match your needs.
- If you have a Medigap policy and later join a Medicare Advantage plan, consider dropping Medigap, since it can't be used to pay for Advantage copayments, deductibles and premiums.
Medicare Open Enrollment. During Open Enrollment you can:
- Switch from original Medicare Parts A, B and D to a Medicare Advantage plan, or vice versa.
- Switch from one Advantage plan to another.
- Switch from an Advantage plan that offers prescription coverage to one that doesn't, and vice versa.
- Join a Part D plan.
- Switch from one Part D plan to another.
- Drop Part D coverage altogether.
People currently enrolled in a Medicare Advantage plan have another opportunity to make changes during a second period called Medicare Advantage Disenrollment. Between January 1, 2012, and February 14, 2012, you can switch back to original Medicare Parts A and B coverage, with the option to join Part D as well. However, during this period you cannot:
- Switch from original Medicare to Medicare Advantage.
- Switch from one Medicare Advantage plan to another.
- Switch from one Part D plan to another.
- Helpful publications, including Medicare & You 2011, a highly detailed guide that explains Medicare in easy-to-understand language.
- Tools to compare prescription drug plans, hospitals, nursing homes, home health agencies and Medigap plans in your area.
- A resource to find local doctors and other health practitioners who participate in Medicare.
- Services covered by various Medicare plans.
- Enrollment instructions.
In addition to the Medicare website, AARP provides a very thorough Guide to Medicare. Also, your doctor or pharmacist may be able to help you choose the most cost-effective prescription drug plan for your situation.
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.