Medicare Myth-Busting for Annual Enrollment
By Fran Soistman, CEO of eHealth, Inc.
Medicare’s nationwide Annual Enrollment Period is here. If you’re newly eligible for Medicare or already on Medicare, you may be among a large group dreading this time of year.
From early October into mid-December, you can expect to be bombarded with sales pitches, TV ads, and mailers from dozens of different companies trying to sell you a new Medicare plan for 2024. Some of these messages can be confusing, and it’s difficult to know who to trust.
The marketing blitz can obscure the fact that Medicare’s Annual Enrollment Period exists to help you find and keep the best Medicare plan for your personal medical needs, preferences, and budget. It’s a great opportunity to right-size your coverage for the coming year.
So, with Medicare Annual Enrollment Period in full swing, let’s set to rest five big myths about Medicare.
MYTH 1: Medicare will cover all your medical costs.
If you’re new to Medicare, you might imagine that once you’re enrolled in it all your medical care is covered and free. Unfortunately, it’s just not so.
Original Medicare Parts A and B cover a broad range of hospital and doctor charges, but they leave you with out-of-pocket costs in the form of coinsurance and deductibles, and they don’t cover typical prescription drug expenses.
The good news is there are ways to help fill in your coverage gaps.
To do so, you’ll want to combine your standard Medicare Parts A and B coverage with a Medicare Supplement (“Medigap”) plan and a Part D prescription drug plan, or alternatively choose a Medicare Advantage plan (also known as Medicare Part C) that includes coverage for prescription drugs.
MYTH 2: Medicare Supplement and Medicare Advantage are basically the same.
Both Medicare Supplement and Medicare Advantage can help you fill gaps in coverage, but they work in different ways, and the coverage they offer is not identical.
Medicare Supplement plans complement your Original Medicare Parts A and B coverage. The most popular Medicare Supplement plans (Plans F or G) cover most of the out-of-pocket costs associated with Original Medicare.
The big exception is prescription drug costs. Medicare Supplement plans do not cover prescription drugs, thus you’ll need a separate Part D prescription drug plan.
By contrast, when you enroll in a Medicare Advantage plan, your Original Medicare Parts A and B coverage is provided by a private insurance company rather than through the government. There’s a lot of variety in Medicare Advantage plans. Many cover prescription drugs, and some offer benefits beyond what is traditionally offered by Original Medicare.
Why choose one over the other? A Medicare Supplement plan paired with a Part D drug plan can leave you with fewer out-of-pocket costs and more freedom to visit the doctors of your choice, but you may have to spend a few hundred dollars or more in monthly premiums.
Medicare Advantage plans generally offer more affordable monthly premiums compared to Original Medicare combined with a Supplement plan. Which brings us to our next myth.
MYTH 3: “Free” Medicare Advantage plans are a scam.
Medicare beneficiaries are often surprised to learn that some Medicare Advantage plans are offered with what is described as a “$0” monthly premium. Their skepticism is understandable. How can this be?
But there’s no sleight of hand involved, and you’re not really getting something for nothing.
Though some Medicare Advantage enrollees pay no monthly premium to their insurer, when they enroll in Medicare Advantage, they must continue to pay your Part B Premium, which is typically taken from their Social Security check automatically. Medicare then pays the insurer a monthly flat fee per person for the care provided.
When you consider the affordability of Medicare Advantage compared to Medicare Supplement, it’s no wonder enrollment in Advantage has skyrocketed over the past ten years and now includes 51% of all Medicare beneficiaries.
MYTH 4: You can enroll in a new Medicare plan anytime you want.
Lots of people get confused about when you can sign up for a Medicare health plan and when you can’t. Some people imagine you can sign up anytime you want. It’s not true.
For Medicare Supplement, your best opportunity to sign up is in the first six months after you enroll in Original Medicare Part B. With some exceptions, if you fail to sign up for Medicare Supplement then, you risk being turned down or charged more based on your age and medical history. There is no annual open enrollment period for Medicare Supplement.
Things work differently with Medicare Advantage and Medicare Part D drug plans.
First, you have an initial enrollment period that, for most people, begins three months before you turn 65 and ends three months after you turn 65.
Beyond that, there’s the famous nationwide Medicare Annual Enrollment Period that runs from October 15 through December 7. During this period any Medicare beneficiary can enroll in a new Medicare Advantage plan or Part D prescription drug plan.
In most cases, if you miss the Annual Enrollment Period, you’re stuck with your current plan for the coming year, unless you qualify for a special enrollment period. But there’s one big exception, which leads us to the last myth I want to bust today.
MYTH 5: If you don’t like your Medicare plan, you’re stuck with it for a year.
Here’s something a lot of Medicare beneficiaries don’t realize: If you’re currently enrolled in a Medicare Advantage plan but miss the big Annual Enrollment Period, in most cases you will have another chance to review your options and make a change, even without qualifying for a special enrollment period.
There’s an open enrollment period just for beneficiaries enrolled in Medicare Advantage that runs from January 1 through March 31 each year.
During this period, you can drop your current Medicare Advantage plan and enroll in a different one. You can also drop Medicare Advantage entirely and revert to Original Medicare with or without Medicare Part D, where your Parts A and B benefits are administered directly by Medicare rather than an insurance company.
If you’ve never heard about this Medicare Advantage Open Enrollment Period, there’s a reason for that. The government prohibits insurance companies and agents from promoting it. But knowing about it can help take some of the pressure off during the big fall Annual Enrollment Period.
Obviously, you want to pick the right plan the first time, during the Annual Enrollment Period – and working with a licensed insurance agent can help you understand your options and find the right match for your needs and budget.
But if you pick a new Medicare Advantage plan during the Annual Enrollment Period and then discover in February that it doesn’t cover your preferred doctor or a drug you need, congratulations - you get a do-over.