For senior citizens, the most important decision you will make this fall comes in the form of choosing the most appropriate Medicare coverage options for next year.
Medicare's 2013 open enrollment period runs from October 15 to December 7, 2012. For most current enrollees, that's the only time to make coverage changes for the coming calendar year (exceptions are made for people who later move outside their plan's service area, qualify for financial assistance or live in a short- or long-term care institution, among other situations).
Several changes to Medicare take effect in 2013, including:
- Medicare Part D participants who reach the so-called doughnut hole coverage gap will begin receiving a 52.5 percent discount on brand-name prescription drugs and a 21 percent discount on generics, compared to 2012's 50/14 percent rates. (These discounts will increase gradually until 2020 when the doughnut hole disappears altogether.)
- Medicare will begin covering additional preventive and screening services, including assessments and counseling for depression, alcohol misuse, cardiovascular disease and obesity.
- A redesigned Medicare Summary Notice (MSM), which explains what your doctor/ provider billed for, the Medicare-approved amount, what Medicare paid, and what you must pay, will be much easier to read and understand.
- The revamped MSM (which is mailed every three months) launches in early 2013, but users can now view an online version by simply creating their own MyMedicare account. You can customize your MSM to see procedures broken down by a single claim or any time period. Reviewing the form online means a shorter wait to see what you were charged for services, supplies or equipment and how much Medicare paid.
Medicare also recently overhauled its Medicare.gov website, adding many new features and simplifying the language and site navigation. For example:
- The homepage now provides direct links for common tasks like applying for Medicare, changing plans, calculating costs, researching what different plans cover, claims and appeals procedures, and more.
- Search for whether a specific test, item or service is covered under Original Medicare (Parts A and B).
- Get customized information based on your specific situation.
- Quick links to replace a lost Medicare card, find a Medicare Advantage (Part C) or prescription drug plan (Part D).
- Find doctors and other health professionals, nursing homes, hospitals, home health services and health/drug plans, and make side-by-side comparisons of costs and care provided.
- It can be accessed on mobile devices like tablets and smartphones, so you can seek information anywhere, anytime.
- Medicare beneficiaries, counselors and caregivers can check whether correspondence they received is legitimate by viewing descriptions of official Medicare mailings.
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. To apply for Medicare online, visit this site.
Medicare Options. Medicare offers several plans and coverage options, including:
- Part A helps cover inpatient hospital, skilled nursing facility and hospice services, as well as home health care.
- Part B helps cover doctor's services, outpatient care and some preventive services. It's optional and has a monthly premium.
- Part C (Medicare Advantage) offers plans run by Medicare-approved private insurers as alternatives to Original Medicare Parts A and B. Most cover prescription drugs and some include extra benefits at additional cost. You're usually required to use the plan's provider network.
- Part D helps cover the cost of 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.
Some people also 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.
Keep in mind:
- With Medicare Parts B and D, you'll often face sizeable penalty fees if you don't enroll when first becoming eligible -- your Part B monthly premium could go up 10 percent for each 12-month period you were eligible but didn't sign up (the Part D late enrollment penalty is somewhat more complicated to calculate); however, if you're currently covered by an employer's plan you can enroll later without penalty.
- If your Advantage plan includes drug coverage, you don't need Part D.
- Terms of Advantage and Part D plans such as premiums, copayments and covered medications can change from year to year, so carefully review enrollment materials from your current plans to make sure they still match your needs. This Medicare Plan Finder can help you find other available plans in your area.
- Some employers and unions offer Medigap coverage to their retirees. Medigap plans can vary widely in terms of cost, covered benefits and states participating so compare your options carefully.
- If you have Medigap and later join an Advantage plan, you should drop Medigap, since it can't be used to pay for Advantage copayments, deductibles and premiums.
- If you already have an Advantage plan, it's illegal for anyone to sell you Medigap insurance unless you are switching back to original Medicare Part A and B coverage.
Understanding and choosing the right Medicare options can be complicated and time-consuming. For assistance, call 1-800-633-4227 or read Medicare & You, a highly detailed guide that explains Medicare in easy-to-understand language. AARP also provides a great Medicare Starter Kit that answers many common questions.
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.