A New Medicare Strategy
The Wall Street Journal
August 24, 2012
Many people are paying more than they should for coverage, are in plans that restrict their choices or have inadvertently neglected to enroll in supplemental and prescription-drug plans.
In many cases, the problems stem from hasty decisions during their initial enrollment, as well as misguided reliance on incomplete information provided by sales people touting Medigap, prescription-drug or Advantage plans.
Even if you are happy with your coverage, you might want to re-evaluate your choices in light of the Affordable Care Act, which has added some benefits. Preventive screenings, such as mammograms and colonoscopies, are now covered, and the "doughnut hole," which causes many seniors to pay thousands of dollars for prescription drugs out of pocket, is being phased out.
To help pay for the improved coverage, the overhaul rescinds subsidies that private insurers receive for Advantage plans, which are private programs that are intended to provide coverage similar to Medicare. It isn't clear whether providers will drop plans, increase premiums or make other changes.
"Medicare beneficiaries are being bombarded with information, and they really don't understand how any of it will affect their coverage," says attorney and claims advocate Susan Loeb, of Your Benefits Advocate, based in Chicago, who helps clients navigate the Medicare system and maximize their coverage.
With the annual enrollment period fast approaching, now is the time to consider your options, whether you are enrolling for the first time, have had coverage for years or are helping an older relative with decisions.
The basics: Under the traditional Medicare program, Medicare Part A, which covers hospitals and skilled nursing, and Part B, which covers doctor visits, are directly administered by the government. Your primary task is to enroll on time, generally when you turn 65. The Social Security website has the details.
You have the option—but not the obligation—to purchase supplemental Medigap insurance, which covers the 20% of costs that Part B doesn't pick up. These Medicare supplement plans come in nine tiers, ranging from high-deductible policies, which have low premiums but high out-of-pocket costs, to Plan F, which offers the most comprehensive coverage.
Dozens of insurers sell these plans, including AARP and Blue Cross/Blue Shield. The good news is that the plans are standardized, meaning that each insurer has to provide the same benefits at each tier.
You select the plan based on price and quality of service, says Harvey Matoren, president and chief executive of Claims Security of America, a nationwide claims-assistance and medical-bill-management company based in Jacksonville, Fla., that counsels clients on how to navigate the Medicare program and other health insurers.
You must also choose a Part D prescription-drug plan if you want drug coverage under the traditional Medicare Part A and B program. Like Medigap, these plans are offered by dozens of competing companies; unlike Medigap, the coverage isn't standardized, and the drugs available (the "formulary") and prices vary. The trick is to choose a plan that dovetails with your drug needs—not necessarily the cheapest plan, Mr. Matoren says.
"We have clients who are spending $1,000 less with one Part D plan than they would with another," he says.
You can opt out of traditional Medicare and instead sign up for a private version, called an Advantage Plan, or Part C, that is intended to provide the equivalent of traditional Medicare (Parts A, B, D and Medigap),
Although marketed as being cheaper or providing more coverage than traditional Medicare, the plans restrict your choice of providers. If you go to a doctor or hospital out of the network, you pay considerably more. These plans are among the most aggressively marketed Medicare plans.
The federal government funds a nationwide network of free State Health Insurance Assistance Programs, or SHIPs, which can help you with enrolling and choosing plans, filing Medicare and private insurance claims, disputing a claim and preparing Medicare appeals.
People with more complex questions and issues, or less time, might want to hire a fee-only claims-assistance professional with expertise in Medicare. For a fee that might range from $80 to $150 an hour, they can help you select coverage, change plans, review bills and appeal claims denials. They don't sell insurance.
Ms. Loeb helped a client who discovered that his elderly mother, who had been admitted to the hospital, had no prescription-drug coverage. She had received a letter during the fall open-enrollment season informing her that her Medicare Advantage Plan would no longer be offered as of Jan. 1, 2011. She then mistakenly enrolled in her insurer's Medigap Plan, not realizing she also needed to enroll in Part D for prescription medication.
Ms. Loeb was ultimately able to get the woman retroactively enrolled in another plan with her prior insurer. But what would have been a consultation costing perhaps $125, had the woman sought assistance when she got the notice, ended up costing a little over $1,000, because of the time involved.