Medicare coverage is the federal health insurance program for Americans 65 and older, as well as younger individuals with long-term disabilities. It covers a wide range of medical services, including hospitalizations, doctor’s visits, prescription drugs, and specialized care like skilled nursing, home health, hospice, and preventive services
There are two primary ways to receive Medicare benefits:
- Traditional Medicare: This consists of Parts A (hospital coverage) and B (medical coverage). You may also opt for Part D (prescription drug coverage) and a supplemental insurance plan (Medigap) to help cover out-of-pocket costs.
- Medicare Advantage: These plans, offered by private insurance companies, combine Parts A and B, often include Part D, and may offer additional benefits.
Annual Open Enrollment: You’re Chance to Make Changes
Every year, Medicare beneficiaries have a window of opportunity to review their Medicare coverage options and make changes. This period, known as Annual Open Enrollment, typically runs from October 15th to December 7th.
During this time, you can:
- Switch from traditional Medicare to a Medicare Advantage plan (or vice versa)
- Choose a different Medicare Advantage plan
- Enroll in or change your Medicare Part D prescription drug plan
What can Medicare beneficiaries do during open enrollment?
During the annual open enrollment period, Medicare beneficiaries can:
- Change Medicare Part D plans: Traditional Medicare beneficiaries can enroll in a new Part D prescription drug plan or switch between existing ones.
- Switch between traditional Medicare and Medicare Advantage: Those in traditional Medicare can enroll in a Medicare Advantage plan, and vice versa.
- Change Medicare Advantage plans: Current Medicare Advantage enrollees can choose a different plan.
Important to note:
- There may be a late enrollment penalty for those who delay enrolling in Part D.
- Medicare Advantage plans often change from year to year, so it’s important to review your options.
- Many Medicare beneficiaries don’t compare their coverage options during open enrollment.
Are there other opportunities for Medicare beneficiaries to make coverage changes outside of the open enrollment period?
Yes, some Medicare beneficiaries can make certain changes to their coverage at other times of the year. For example:
- Special Enrollment Periods: Beneficiaries experiencing disruptions to existing coverage (e.g., moving or losing employer-sponsored coverage) or changes in eligibility for Medicaid may qualify for a Special Enrollment Period at any time.
- Dual-Eligible Individuals and Extra Help: These beneficiaries can currently change their Medicare Advantage or Part D coverage once per quarter. However, new rules starting January 1, 2025, will limit the frequency and types of changes they can make.
- Nursing Home Residents: These individuals may change their Medicare Advantage or Part D coverage once per month.
Other important points:
- Medicare Advantage Open Enrollment: Enrollees can change plans or switch to traditional Medicare between January 1st and March 31st each year.
- 5-Star Plans: Beneficiaries can switch to a 5-star plan between December 8th and November 30th of the following year.
- Initial Enrollment: This period begins three months before a person’s 65th birthday and ends three months after it.
How Supplemental Coverage Impacts Medicare Decisions
Many Medicare beneficiaries have additional coverage like Medigap or employer-sponsored retiree health benefits to help with Medicare’s costs. These plans aren’t tied to Medicare’s open enrollment, but they should be considered when choosing a Medicare plan.
Medigap
- Flexibility: People in traditional Medicare can buy Medigap at any time.
- Cost Sharing: Medigap helps cover deductibles and out-of-pocket costs.
- No Medicare Advantage: Medigap doesn’t work with Medicare Advantage.
- Guaranteed Issue: Most states guarantee Medigap coverage for people age 65 or older.
- Pre-Existing Conditions: Coverage may be denied or more expensive after six months of Medicare enrollment.
- Medicare Advantage Switch: Switching from Medicare Advantage within 12 months guarantees Medigap coverage.
- Under 65: Coverage is less guaranteed, and premiums are higher.
Employer-Sponsored Coverage
- Declining: Retiree health benefits are becoming less common.
- Medicare Supplement: Can supplement traditional Medicare or Medicare Advantage.
- Medicare Advantage Only: Some employers offer benefits exclusively through Medicare Advantage.
- Switching Plans: Switching plans may result in losing retiree health benefits.
How does additional support for low-income people factor into Medicare coverage decisions?
Low-income Medicare beneficiaries can receive additional financial assistance and coverage through various programs:
- Medicaid: Individuals who qualify for full Medicaid benefits can choose Medicare Advantage plans designed for this population, known as dual-eligible special needs plans (SNPs). These plans offer enhanced coordination between Medicare and Medicaid benefits.
- Medicare Savings Programs (MSP): State Medicaid programs can cover Medicare premiums and cost-sharing for beneficiaries with limited income and assets. This assistance can help reduce out-of-pocket expenses.
- Part D Low-Income Subsidy (LIS): People who qualify for LIS receive assistance toward their Part D prescription drug coverage premiums and cost-sharing. Dual-eligible individuals and those enrolled in MSP automatically qualify for full LIS benefits.
Key considerations for low-income Medicare beneficiaries:
- Eligibility: Income and asset levels determine eligibility for these programs.
- Enrollment: Enrollment can be done at any time of the year, regardless of open enrollment periods.
- Coordination: Medicaid typically wraps around Medicare coverage, with Medicare as the primary payer.
- Coverage: Additional coverage may include long-term services and supports not covered by Medicare.
- Cost-sharing: MSP recipients may still have cost-sharing for non-Medicare covered services offered by their Medicare Advantage plan.
- Plan choice: Individuals can choose Medicare Advantage plans or stand-alone Part D drug plans.
By understanding these programs and their eligibility requirements, low-income Medicare beneficiaries can make informed decisions about their coverage and maximize their benefits.
Comparing Traditional Medicare and Medicare Advantage
Both Traditional Medicare and Medicare Advantage provide coverage for services included in Medicare Parts A and B. However, they differ in key areas such as out-of-pocket costs, provider networks, and additional benefits.
When choosing between the two, Medicare beneficiaries should consider their health needs, financial situation, preferred medical care, provider choices, and prescription drug requirements. Factors to evaluate include:
- Premiums, deductibles, cost-sharing, and out-of-pocket spending: Compare the costs associated with each option.
- Extra benefits: Medicare Advantage plans often offer additional benefits like dental, vision, and hearing coverage.
- Provider access: Traditional Medicare offers broader provider access, while Medicare Advantage may have more limited networks.
- Prior authorization and referrals: Traditional Medicare generally requires fewer referrals and prior authorizations.
- Prescription drug coverage: Traditional Medicare requires a separate Part D plan, while Medicare Advantage includes prescription drug coverage.
Why choose Traditional Medicare?
- Broadest provider access: See any Medicare-accepting provider.
- No referrals needed: Access specialists and mental health providers without referrals.
- Fewer prior authorizations: Limited need for prior authorization.
- Flexibility with Part D: Choose from various Part D plans.
Why choose Medicare Advantage?
- Extra benefits: Enjoy additional coverage like dental, vision, and hearing.
- Lower out-of-pocket costs: Benefit from capped out-of-pocket spending.
- One-stop shopping: Have all coverage under a single plan.
Ultimately, the best choice depends on your individual circumstances and priorities.
Medicare Advantage Plans: A Closer Look
Medicare Advantage plans, offered by private insurance companies, provide an alternative to traditional Medicare. With a wide range of options available, beneficiaries can customize their coverage based on their specific needs and preferences.
Key Factors to Consider:
- Premiums and Out-of-Pocket Costs: While many plans have no additional premium, some may charge a monthly fee. Deductibles, co-pays, and co-insurance can also vary.
- Provider Networks: Medicare Advantage plans often have limited provider networks, which can affect your access to care.
- Extra Benefits: Many plans offer additional benefits beyond traditional Medicare coverage, such as dental, vision, and hearing services.
- Prior Authorization and Referrals: Some plans require prior authorization for certain services or referrals from a primary care provider.
- Prescription Drug Coverage: If you need prescription drug coverage, you must select a Medicare Advantage plan that includes it.
Understanding the Variations:
- Premiums: While the average premium is $14 per month, three-quarters of enrollees pay no additional premium.
- Out-of-Pocket Limits: Plans have a maximum out-of-pocket limit, which varies but typically averages around $4,882 for in-network services.
- Provider Networks: The size of provider networks can differ significantly based on the plan and location.
- Extra Benefits: The scope of extra benefits, such as dental or vision coverage, varies widely among plans.
- Prior Authorization: Nearly all Medicare Advantage plans require prior authorization for some services.
- Prescription Drug Coverage: Drug coverage in Medicare Advantage plans is similar to stand-alone Part D plans.
Making the Right Choice: When selecting a Medicare Advantage plan, carefully consider your individual needs and preferences. Factors such as your health conditions, preferred providers, and desired benefits should play a significant role in your decision-making process.
How Do Part D Plans Vary?
Medicare beneficiaries in 2024 have an average of 21 standalone Part D plans to choose from (plus numerous Medicare Advantage drug plans if they opt for comprehensive coverage). These plans differ in premiums, deductibles, cost sharing, drug coverage, and utilization management restrictions. These variations can significantly impact a beneficiary’s access to medications and out-of-pocket costs.
Premiums: Most traditional Medicare enrollees pay a monthly Part D premium unless they qualify for the Part D Low-Income Subsidy (LIS) and enroll in a premium-free plan. The average enrollment-weighted premium in 2024 was $43 per month. The Inflation Reduction Act’s out-of-pocket spending cap may lead to higher premiums for plans in 2025.
Deductibles and Cost Sharing: Plans typically have tier structures for cost sharing, with lower costs for generic and preferred brand drugs and higher costs for non-preferred and specialty drugs. Copayments and coinsurance are common.
Drug Coverage and Utilization Management: Part D plans have formularies (lists of covered drugs). They may also impose utilization management restrictions like prior authorization, quantity limits, and step therapy, which can affect medication access. Around 30% of covered drugs in 2024 were subject to prior authorization.
Pharmacy Networks: Plans may have pharmacy networks or preferred pharmacies where enrollees have lower out-of-pocket costs.
The prescription drug provisions in the Inflation Reduction Act apply to all Part D plans, regardless of whether they are standalone or Medicare Advantage. These changes aim to lower out-of-pocket costs for beneficiaries.
Here’s a breakdown of the changes:
- Insulin Cost Sharing: The cost of insulin is capped at $35 per month per prescription starting in 2023.
- Adult Vaccines: Adult vaccines recommended by the ACIP are now covered at no cost under Medicare Part D.
- Drug Rebates: Drug companies must pay rebates to Medicare if drug costs rise faster than inflation.
- Out-of-Pocket Cap: The out-of-pocket cap for prescription drugs will be phased in over several years, eventually reaching $2,000 in 2025.
- Medicare Part D Low-Income Subsidy Program: Eligibility for this program will be expanded.
These changes will benefit all Medicare beneficiaries who use prescription drugs.
Understanding Your Medicare Coverage Options: Resources at Your Disposal
Choosing the right Medicare coverage can be confusing. Thankfully, there are several resources available to help you navigate your options:
- Medicare & You Handbook: This official guide, delivered by mail, explains the different parts of Medicare and provides an overview of available plans.
- Medicare Plan Compare: This online tool at Medicare.gov allows you to compare plans based on your zip code and specific needs.
- 1-800-MEDICARE (1-800-633-4227): Call this toll-free number to speak directly with a Medicare representative.
- State Health Insurance Assistance Program (SHIP): SHIP counselors offer free, unbiased guidance specific to your state. Find contact information at 877-839-2675 or on Medicare.gov.
Seeking Professional Help:
While insurance agents and brokers can be helpful, it’s important to be aware of potential financial incentives:
- They receive commissions from insurers, often higher for Medicare Advantage plans compared to Original Medicare with Medigap and Part D.
Why Revenue Cycle Management Companies Must Master Medicare Enrollment Periods
Revenue cycle management companies working with Medicare patients must be intimately familiar with the various enrollment periods. These periods dictate when patients can enroll in or change Medicare plans. Understanding these periods is crucial for accurate billing, claims processing, and patient eligibility verification.
Key Enrollment Periods:
- Initial Enrollment Period (IEP): For individuals turning 65. Begins three months before the month of their 65th birthday, includes the month of their birthday, and ends three months after their birthday.
- General Enrollment Period (GEP): Open to all Medicare-eligible individuals. Runs from January 1st to March 31st each year. Coverage starts the following month.
- Medicare Advantage Open Enrollment Period (MA OEP): For those already enrolled in a Medicare Advantage plan. Runs from January 1st to March 31st each year. Allows for switching between Medicare Advantage plans.
- Special Enrollment Periods (SEP): Available under specific circumstances, such as moving, losing job-based health insurance, or becoming eligible for Medicaid.
By staying informed about these enrollment periods, revenue cycle management companies can ensure accurate patient eligibility, timely claims processing, and optimal reimbursement.