A Step-by-Step Guide to Selecting Medicare Coverage

A Step-by-Step Guide to Selecting Medicare Coverage

By Neal Templin
Updated July 27, 2020 / Original July 25, 2020

If you’re like most Americans, you’re getting a wonderful present for your 65th birthday: government-subsidized health insurance for the rest of your life.

The bad news is that Medicare won’t cover a significant chunk of medical expenses. Some choices await that will determine how much you’ll pay and what sort of care you’ll get.

The biggest decision is whether to buy a Medicare supplemental insurance plan or to enroll in a Medicare Advantage plan. The supplemental plans pay thousands of dollars in deductibles and co-pays that Medicare would otherwise leave to you. Medicare Advantage plans have lower premiums, but limit the doctors you can see and treatments you can receive.

Don’t dawdle. During the first six months after you enroll in Medicare Part B—which pays for doctors and other services—supplemental plans must accept you without considering pre-existing conditions. If you miss that window, they have the right to charge extra for health problems or deny coverage.

The graying of the baby-boom generation means that roughly 300,000 Americans were going on Medicare every month even before the coronavirus caused thousands of older workers to lose their jobs and health insurance. These seniors are being asked to navigate a confusing new landscape that blends public and private insurance coverage with complicated trade-offs between premiums and out-of-pocket costs.

Barron’s talked to financial planners, Medicare consultants, insurance brokers, and Medicare enrollees to create a guide for this labyrinth.

Signing Up

If you’re already receiving Social Security benefits, enrollment in Medicare is automatic at age 65. Otherwise you must enroll within a seven-month period of turning 65, which includes the month you turn that age, and the three months before and after. Even if you’re getting Cobra coverage, where you remain on the health plan of a former employer or enrolled in a retiree health-care plan, you must sign up for Medicare or face penalties.

One big exception: If you’re still working at a company with at least 20 employees and covered by a health-care plan there, you don’t need to sign up. After your employer health insurance ends, you have eight months to do so.
Medicare is heavily subsidized but hardly free. The monthly premium starts at $144.60 a person for singles earning up to $87,000 and couples earning up to $174,000 a year. The premium rises in a series of income brackets to a $491.60 individual monthly premium for singles earning more than $500,000 or couples earning more than $750,000 a year. The highest-income earners also pay a $76.40 monthly surcharge for their drug plan.

If you exceed an income bracket, your premiums will jump substantially in the future. You can save yourself a lot of money by delaying a stock sale or holding off spending from a tax-deferred account to lower the income for a particular year.

Costs of Delaying

Medicare increases your monthly premium by 10% for each year that you miss its deadlines. That increase applies for the rest of your life.  It’s a similar deal for Medicare Part D, which covers prescription drugs. Here, the government will increase your lifetime premium 1% for each month you’re late signing up.

David Mendels, a financial advisor at Creative Financial Concepts in New York, had one client who was in her late 60s and had enrolled for Medicare, but not for any supplemental coverage or drug plan. She was healthy, didn’t see a doctor often, shopped around for inexpensive drugs, and figured it was cheaper than paying premiums for supplemental coverage.

Mendels told her she was taking a big risk. She ended up enrolling in an Advantage plan that includes drug coverage. Mendels says clients too often focus on saving a little money on premiums when they should worry about the costs of major illness.

“My concern always is not the nickels and dimes, but the megabucks,” he says. “Even though the megabucks are unlikely, they’re what is going to kill you.”

What Isn’t Covered

Basic Medicare leaves beneficiaries exposed to tens of thousands of dollars in potential costs if they don’t have supplemental coverage.  Suppose you break your hip and have only Medicare. You must pay a $1,408 deductible for hospitalization. On top of that, Medicare will pay doctors treating you only 80% of the amount it allows for that procedure; you’re responsible for the other 20%.

Now suppose that you have to go to a skilled-nursing facility to start walking again. Medicare will cover the first 20 days at 100%. If you need more time than that, you’ll get hit with a $176-a-day co-pay. Unlike most insurance plans, there are no out-of-pocket limits for what you have to pay under Medicare. That broken hip could cost you a lot of money unless you’re enrolled in a supplemental plan or Medicare Advantage.

“Either one will cap costs,” says Tom Jordan, a Medicare and long-term care specialist for Triad Financial Advisors in Greensboro, N.C. He says about 70% of his clients enroll in supplemental plans and most of the rest in Advantage plans. Most of the clients picking supplemental plans also enroll for Medicare Part D prescription-drug plans, while those who sign up for Advantage plans typically get drug coverage as part of the plan.

Getting the Doctor You Want

Rich Hartunian, 68 years old, of Boonton, N.J., just retired from information technology. He was leaning toward enrolling in a Medicare Advantage plan because of the simplicity. Then he talked to a local health-care consultant, Mary Jeanne Cullen, provided by his financial planner.

Hartunian had been treated a few years earlier for a health problem at Memorial Sloan Kettering Cancer Center in New York City, and he still goes to the center for follow-up visits. Cullen told Hartunian that the Advantage plan wouldn’t allow him to keep going to Sloan Kettering. That was a deal breaker.

Hartunian and his wife signed up for a supplemental plan that allows him to go to all hospitals that accept Medicare, Sloan Kettering among them. Their premiums for that supplemental plan, a supplemental drug plan and for Medicare itself total around $350 a month apiece. However, they have no out-of-pocket costs.

“You really have to do your homework on who accepts what,” Hartunian says.

Cullen says she puts almost all her clients in supplemental plans unless they can’t get into one because of their health or age. Cullen, 68, is in a supplemental plan herself.  The government regulates what coverage insurers must include in various supplemental plan options, labeled by letters of the alphabet. That means that consumers can focus on costs since all insurers offer an identical product.

Downside of Supplemental Plans

If you enroll in a supplemental plan, your premium will rise as you get older in most states. Typically, a client in his or her 80s will be paying 50% more than a 65-year-old, says David Armes, a Long Beach, Calif., financial planner who specializes in Medicare.

There are exceptions. Several states—New York and Massachusetts among them—mandate community ratings where insurers must charge everyone in the plan the same rate regardless of age or health.

The result is that customers in these states can stay on cheaper Advantages plans, but switch to supplemental plans when their health declines and they need more-specialized care. Trying that strategy in states without community ratings like California or New Jersey is risky.

“You’re rolling the dice” by waiting to join a supplemental plan until you’re older, says Armes.

Corrections & Amplifications

Medicare supplemental plans cover costs not paid by Medicare Part A and Part B. An earlier version of this article incorrectly called them Medicaid Part B supplemental plans. (July 27, 2020)

 

Medicare’s Out-Of-Pocket Maximum Limit: How Much Will It Cost You?

Medicare’s Out-Of-Pocket Maximum Limit: How Much Will It Cost You?

Diane Omdahl, Contributor

How much will Medicare’s out-of-pocket limits cost you?

Watch the Medicare commercials, read the promotional information you get in the mail. One point jumps out at you. Original Medicare has no limit on how much one will pay, but Medicare Advantage does cap the costs. What exactly does this mean? According to healthcare.gov, the out-of-pocket maximum or limit is the most one will have to pay for covered services in a plan year. After spending this amount on deductibles, copayments and coinsurance for in-network care and services, the healthcare insurance plan pays 100% of the costs of covered benefits for the remainder of the year. Now, let’s take a closer look at how this works in the Medicare world.

Original Medicare

Guess what? The commercials are true; Original Medicare does not have a cap or limit. In the case of a serious illness or accident, you could write unlimited checks. How can that be, you ask? Original Medicare, sometimes referred to as Traditional Medicare, consists of two parts: Part A, hospital insurance, and Part B, medical insurance. These two parts of Medicare have some hefty cost-sharing. Here are a couple of examples. PROMOTED • The Part A deductible for hospitalization in 2020 is $1,408. That’s really not so bad until you realize it is not an annual deductible; it covers a benefit period, only 60 days. Hospitalizations in the winter, spring, summer and fall could cost more than $5,500. • Then, check out the costs for Part B. There’s a deductible, $198 in 2020, and after that, a 20% coinsurance for outpatient services. For example: Sandra enrolled in Part A and Part B only. She was very healthy and didn’t want to pay for more coverage she wouldn’t need. But then she was diagnosed with cancer. Between the physician appointments and diagnostic studies, she quickly met the Part B deductible. Then, she was hospitalized for surgery, with that deductible. After discharge, she started her treatments. She was surprised to learn she would be responsible for 20% of every chemotherapy or radiation treatment, with no cap.

Medicare Supplement Insurance

But there is another chapter to the Original Medicare story. Medicare supplement insurance, also called a Medigap policy, can ease the concern about unlimited out-of-pocket costs. These plans, sold by private insurance companies, help to cover the costs that Part A and Part B do not. In 47 states, Medicare supplement plans are standardized by letter. (Massachusetts, Minnesota and Wisconsin have their own method of standardization.) A specific package of benefits comes with specified out-of-pocket costs. What if Sandra had a Medicare supplement Plan G, along with Part A and Part B? This plan covers all Medicare costs, except the Part B deductible. Sandra would have had coverage for the Part A hospitalization deductible. After paying the Part B deductible, the plan would cover the 20% coinsurance for outpatient services, including the chemotherapy treatments. She would not face unlimited out-of-pocket costs.

Medicare Advantage

The commercials say that Medicare Advantage plans cap your costs. That’s because these plans must establish a maximum out-of-pocket limit on the cost sharing that plan members face. Here are some things to know about Medicare Advantage and the maximum limit. • Plans can have no or very low premiums. Plan members then face deductibles, copayments or coinsurance for healthcare services. • Only Medicare-covered services count toward the out-of-pocket limit. • This limit excludes monthly premiums and prescription medications. • Services not usually covered by Medicare, such as hearing, vision, and the new “daily maintenance benefits”also are not counted in the limit. • Since 2011, the limit has been $6,700 for in-network services and $10,000 for in- and out-of-network combined. • Once the limit is reached, the plan covers any costs for the remainder of the year. • Each plan determines its maximum out-of-pocket limit and can opt to offer a lower limit. In 2019, the average out-of-pocket limit was about $5,000 for in-network services and almost $8,900 for out-of-network. • A plan’s limit can change every year. Here’s how Sandra would have fared with a Medicare Advantage plan. One zero-premium plan had a $5,000 out-of-pocket maximum limit. The copayment for her primary physician would be $10 and for her specialist, $40. The diagnostic tests and procedures ranged from no charge up to $225 and there was a $200 per-day copayment for the first seven days in the hospital. However, one cost likely would shock Sandra. She would pay 20% of every chemotherapy treatment. This is common with many Advantage plans. In Sandra’s Florida zip code, there are 38 zero-premium plans. Of those plans, 32 plans charge 20% for chemotherapy treatments; four charge 10-20% and the remaining two – $0 or 20%.

Bottom Line: How Much?

• Enrolling in Medicare Part A and Part B, without additional coverage, is not a wise decision. It may save money on premiums initially. But get sick and, because there is no cap, the bills may never stop. • Adding a Medicare supplement plan to Part A and Part B provides protection from unlimited costs. For example, pay the premium for Plan G and, when using healthcare providers who’ll see Medicare patients, the maximum out-of-pocket costs for the year will be the Part B deductible. • Medicare Advantage plans offer lower premiums and have a maximum out-of-pocket limit. But check the plan’s details. That limit can be $6,700.
Medicare has strict deadlines to sign up. Why you don’t want to miss them

Medicare has strict deadlines to sign up. Why you don’t want to miss them

 

 

PUBLISHED WED, JUL 15 20203:25 PM EDTUPDATED WED, JUL 15 20204:10 PM EDT

Sarah O’Brien@SARAHTGOBRIEN

KEY POINTS

• There are about 62.4 million people on Medicare, the majority of whom are at least age 65, which is when you become eligible for coverage.
• While some beneficiaries are automatically signed up, others may only partially enroll or take no action because they have qualifying coverage elsewhere.
• Missing the deadlines that apply to your situation could result in negative consequences, including financial penalties and/or a period of having no coverage.

Medicare is often referred to as a maze. The various deadlines for signing up may have something to do with that.

Roughly 62.4 million people are enrolled in Medicare, the majority of whom are age 65 or older. Basic Medicare consists of Part A (hospital coverage) and Part B (outpatient care and medical equipment). Most people qualify for premium-free Part A because they have a long-enough work history of paying into Medicare through payroll taxes. Part B comes with a standard monthly premium, which is $144.60 for 2020.

Part D plans (prescription drug coverage) also have premiums, which can vary by plan. Higher earners pay more for Parts B and D, while low earners may qualify for Medicaid coverage and get extra help for prescriptions. There are also Medicare Advantage Plans (Part C) as well as Medicare supplement plans, aka “Medigap” (more on these options farther down).

If you’re currently planning to sign up, you probably shouldn’t wait until the last minute.
“With everyone working from home because of Covid-19, applications for Parts A and B are taking a little longer to process,” said Elizabeth Gavino, founder of Lewin & Gavino in New York and an independent broker and general agent for Medicare plans.

Now for those deadlines. (It’s best if you sit down while reading; it gets complicated fast.)
Parts A and B if you’re 65
If you already are receiving Social Security before age 65, you’ll be automatically enrolled in Part A.
The same applies to Part B in the above situation. While you can opt out, be sure you have acceptable coverage in its place — as defined by the government — if you plan to enroll down the road.

“If you don’t want Part B, you need to notify Social Security to dis-enroll you,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits. Be aware that if you don’t enroll in Part B when you were supposed to and have no other qualifying coverage, you could face late-enrollment penalties.

That amount is 10% of the standard premium for each 12-month period you should have been enrolled. (There is no penalty associated with delaying Part A).

Individuals who aren’t auto-enrolled in Parts A and B at age 65 get a seven-month window to sign up unless they choose to delay it due to qualifying coverage elsewhere. That initial enrollment period starts three months prior to the month of your 65th birthday and ends three months after it.

Be aware, though, that if you wait until the month you turn 65 or during the three months after that to enroll, your Part B coverage will be delayed, which could cause a gap in coverage.

Related deadlines

Regardless of whether you are auto-enrolled or sign up on your own at age 65, there are other deadlines to know.
If you want to pair Parts A and B with a standalone Part D prescription drug plan, you should do this during your seven-month initial enrollment period. Many beneficiaries who go this route also purchase a Medigap policy to cover some out-of-pocket costs that come with Parts A and B (more on Medigap farther down).

If you don’t get Part D coverage during this time, whether through a stand-alone plan or an Advantage Plan, and later go to sign up, the penalty is 1% of the national base premium ($32.74 for 2020) for each full month you should have had that coverage.

Meanwhile, if you want an Advantage Plan instead of a stand-alone prescription plan and/or Medigap (you can’t combine an Advantage Plan with Medigap), you also get until the end of your initial enrollment period to purchase one, Roberts said.

These plans, which are offered by private insurance companies, deliver Parts A and B, and typically Part D. They also come with caps on out-of-pocket spending and often include extras like dental and vision coverage. Any premium charged would be on top of the one for Part B.

As for when you can sign up if you miss the deadlines:

For Part B, you’d have to wait until general enrollment, which is every year from Jan. 1 through March 31, with coverage taking effect July 1. That means a potential gap in health coverage.

If you do go this route, you can sign up for Part D from April 1 through June 30, with coverage starting July 1, as well. You also can sign up for Part D during the yearly open enrollment period, which is Oct. 15 through Dec. 7. Same goes for Advantage Plans.

After age 65 

Some Medicare-eligible workers choose to delay enrolling in at least Part B because they have employer coverage that the government considers acceptable alternative coverage — i.e., group insurance at a large company.
However, they might enroll in Part A, because it’s free. (Be aware that you cannot contribute to a health savings account if you have Medicare, even if only Part A.)

If you need to sign up for Parts A and/or B upon losing job-based coverage, you get eight months to do so without facing a late-enrollment penalty for Part B.

However, because the rule is that you if you go more than 63 days without Part D prescription drug coverage — whether through an Advantage Plan or a stand-alone plan — you’d need to make sure you do that within two months of losing your other coverage, according to information in the government’s 2020 Medicare handbook.
Also be aware that when you sign up for Part B because you are losing job-based coverage, there’s a form you and your ex-employer should fill out.

This basically is to avoid late-enrollment penalties by ensuring that you had qualifying coverage during the period of time you were eligible for Part B but not enrolled.
Additionally, while keeping your employer-based health insurance under a federal law known as COBRA may be possible, it also could be a more expensive proposition. You’d likely have to pay the full premiums instead of your employer footing some or much of those monthly amounts. Also, COBRA coverage does not count as qualifying insurance in place of Medicare.
If you want Medigap
Generally speaking, you get a six-month period during which you are guaranteed to get a Medigap plan regardless of your health. Outside of that, unless your state has different rules, an insurer can charge you more or reject coverage if you have certain conditions.

This six-month window starts when you first enroll in Part B — as long as you are paying no late enrollment penalties, according to the Centers for Medicare and Medicaid Services. If you’re paying extra, it means you didn’t sign up for Part B when you should have, which also means you technically missed your six-month “guaranteed issue” period.

There are exceptions, of course.

For example, if you dropped a Medigap policy in favor of an Advantage Plan for the first time, you get a year to go back to your Medigap policy without medical underwriting.

Moving to another state

While Parts A and B remain the same no matter where you live in the U.S., other coverage — Part D plans, Medigap and Advantage Plans — differ in certain ways from state to state. This means you need to switch to plans in your new state, even if they are with the same carrier.

If you have an Advantage Plan, you can tell your insurer during the month before you move — in which case you get two months after you move to make a change. Same goes for Part D plans.

Otherwise, if you tell your plan after your move, your chance to switch begins the month you alert your insurer, plus two more full months.

Meanwhile, Medigap plans are standardized across most states. However, the costs may differ, so you might pay a different amount for your plan after you move. You could look for a different Medigap policy at any point, although you could face medical underwriting unless the state has different enrollment rules.

If you return from overseas

Basic Medicare does not provide coverage beyond U.S. borders in most circumstances.
And, unless you meet an exception — i.e., you have health coverage abroad, either through you or your spouse’s employer or a national health plan if you are self-employed — you may face late-enrollment penalties for Part B if you didn’t sign up at age 65.


On the other hand, If you have acceptable overseas coverage and return to the U.S., you get eight months upon losing it to sign up for Part B if you hadn’t already.


Be aware that you’d also need to prove that you had qualifying coverage while working overseas, said Medicare expert Patricia Barry, author of “Medicare for Dummies.” That means you should hold onto things like tax returns, pay stubs, medical statements and records of doctor visits and bills.


For people living abroad who sign up for Part D upon returning to the U.S., there is no late-enrollment penalty as long as you get coverage within two months. You also would get two months to sign up for an Advantage Plan if you already were enrolled in Part B while overseas.


Separately, if you live overseas and don’t qualify for free Part A, and you sign up for Medicare later than age 65, you get a three-month window once you move back to the U.S. to enroll. In that situation, there are no late penalties.

I’m 65+ and lost my job. Should I sign up for Medicare or COBRA?

I’m 65+ and lost my job. Should I sign up for Medicare or COBRA?

If you’re not yet 65, you may have no choice but to sign up for COBRA and retain your existing coverage, albeit at a hefty cost.

Maurie Backman, The Motley Fool

COVID-19 has spurred an economic recession that’s left many Americans out of a job. And that includes older workers. In January, the unemployment rate among workers aged 55 and over was 2.6%. In April, it soared to 13.6%. That means a large number of older Americans are missing not just their paychecks, but the benefits that went along with them – namely, health insurance.

If being out of work has cost you your insurance, you’ll need to figure out coverage immediately. Going without insurance is an unwise move in general, but it’s especially dangerous during a pandemic. If you’re not yet 65, you may have no choice but to sign up for COBRA and retain your existing coverage, albeit at a hefty cost, or otherwise buy a plan on the health insurance exchange.

Fact check: Hospitals get paid more if patients listed as COVID-19, on ventilators

If you’re laid-off from a job at age 65 or older, on the other hand, you have more options, because at that point, you can sign up for Medicare. But does enrolling in Medicare make sense in that scenario, or are you better off opting for COBRA and enrolling in Medicare later in life?

Weighing your health coverage options

If you expect your layoff to be temporary and think you’ll be employed, with insurance, in the not-so-distant future, then COBRA may be a good solution for you — provided you can pay for it. When you sign up for COBRA, you retain your existing health coverage, but you’re also on the hook for its entire cost. Many employers subsidize health insurance premiums, making them more affordable for workers. As such, the $200 a month you once had deducted from your paychecks for health coverage might represent just a fraction of your health plan’s monthly premium costs.


Still, the benefit of opting for COBRA is that you’ll get to keep the plan you’re used to. You can continue seeing the same doctors and your copays will be the same. At a time when getting out and about to find new providers may be nerve-wracking due to the ongoing pandemic, that’s important. However, you’re only allowed to retain COBRA coverage for up to 18 months, so if you’re worried about finding a new job within that time frame, Medicare may be a better solution.

It’s also easy to make the case to sign up for Medicare off the bat. Though Medicare is by no means free, it can be more affordable than COBRA. That said, Medicare’s scope of coverage may be more limited — it does not cover dental care, eye exams, or hearing aids.

But here’s another reason why it might make sense to enroll in Medicare when you’re 65 or older and out of work — you can always drop your coverage once you no longer need it (and then reenroll once you retire). Unlike Social Security, where delaying benefits could put more money in your pocket, there’s no financial incentive for waiting to sign up for Medicare once you’re eligible. If you have health coverage through work that doesn’t cost you anything, paying for Medicare makes little sense. But if you’ve lost your employer coverage, Medicare could be an affordable temporary solution.

Ultimately, there’s no right or wrong answer, as both Medicare and COBRA have their benefits and drawbacks. Weigh those carefully to arrive at the right choice for you.

Brand-Name Drugs – High Copays Soak Medicare Part D Patients

Brand-Name Drugs – High Copays Soak Medicare Part D Patients

A new study takes a fresh measure of generic drugs’ price advantages, revealing how much more Medicare Part D patients shelled out in copayments for two popular brand-name drugs in 2013. The result: 10.5 times more.

Copayments averaged $42 for both Crestor, a cholesterol medication, and Nexium, taken for acid reflux, according to researchers whose study was published Wednesday in Health Affairs. The consumers’ cost for generic therapeutic equivalents was $4, they said.

The findings point to opportunities to save money for Medicare Part D’s elderly and disabled beneficiaries, who fill three or more prescriptions a month on average, according to previous research cited in the study. Half of enrollees received less than $22,500 in income in 2012.

High copays for brand-name drugs might lead patients to choose between food or medications based on their monthly budget,” the researchers said. Generics represented 76 percent of the drugs dispensed in Medicare Part D in 2013, but brand names still retained preferential selection in some cases. One contributor is pharmaceutical companies’ practice of negotiating rebates with private insurance companies that provide drug coverage plans to beneficiaries under Medicare Part D, researchers said. After getting a rebate, an insurer might list the rebated brand-name drug as preferred, which encourages its selection over other brand medications.

Preferred drugs require lower copays than a rival branded drug, but they are still more expensive than a generic, according to Health Affairs. Physicians can prescribe generic medications if they choose to do so.

Inaccurate information about the amounts of drug rebates also works to Medicare patients’ disadvantage, researchers said. Insurers, at the start of each plan year, must report the rebates they expect to get to the government, which takes them into account in setting the premiums that beneficiaries will pay and how much it will pay insurers for providing the benefit. Previous government investigations have found many insurers tend to overestimate their rebates, leading to beneficiaries paying excessive premiums and Medicare overpaying insurers. The government eventually recovers overpayments later when insurers report what they actually received in rebates. But Medicare beneficiaries are left to absorb the cost of brand prescribing, copays and elevated premiums, researchers said.

To do their study, researchers analyzed cost data for all medications in 2013 under Medicare Part D, a dataset released for the first time last year by the Centers for Medicare and Medicaid Services. In 2013, the top 10 drugs in Part D, ranked by claims, were all generics, accounting for $4.1 billion in expenses. But ranked by total spending, the top 10 most expensive drugs were all brand names, representing $19.8 billion in spending, CMS said. Nexium was No. 1 at $2.5 billion and Crestor was No. 3 at $2.3 billion.

Had generic equivalents been prescribed in 2013 instead, the government, patients and insurance companies could have saved a combined $870 million for omeprazole in place of Nexium and $1.2 billion for atorvastatin instead of Crestor, researchers estimated. Dr. Nicole Gastala, the study’s lead author, said certain aspects of medical culture steer patients toward brand-name drugs.

Patients are frequently biased toward brand names by the power of advertising, and doctors’ interactions with pharmaceutical representatives have the same effect on them, said Gastala, who practices family medicine in Iowa and was a former visiting scholar at the Robert Graham Center for Policy Studies in Washington, D.C.

The cost of a drug is often unknown to both patients and doctors and physicians may have no idea how expensive a copay is. When doctors prescribe a brand-name, patients rarely second-guess the choice, Gastala said. Doctors sometimes try to find workarounds to save their patients money.

Dr. Robert Wergin, the chair of the American Academy of Family Physicians, said when generic medications are unavailable in the same strengths as brand-name drugs, he sometimes adjusts the generic version’s dosage to make it equivalent. He may tell patients to cut some generic pills in half to make them equivalent in strength to a brand-name medication, for example.

I went to medical school, and I can’t remember a class where we talked about business models and rebates and [the pharmaceutical industry], Wergin said. My focus is on the individual patient.

For answers to your pressing questions call Jim Robeson, the Medicare Answer Guy @ (858) 935-9120. Visit website

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Senior Surprise: Getting Switched With Little Warning Into Medicare Advantage

Senior Surprise: Getting Switched With Little Warning Into Medicare Advantage

Only days after Judy Hanttula came home from the hospital after surgery last November, her doctor’s office called with bad news: Records showed that instead of traditional Medicare, she had a private Medicare Advantage plan, and her doctor and hospital were not in its network. Neither the plan nor Medicare now would cover her medical costs. She owed $16,622.

“I was panicking”, said Hanttula, who lived in Carlsbad, N.M., at the time. After more than five hours making phone calls, she learned that because she’d had individual coverage through Blue Cross Blue Shield when she became eligible for Medicare, the company automatically signed her up for its own Medicare Advantage plan after notifying her in a letter. Hanttula said she ignored all mail from insurers because she had chosen traditional Medicare. “I felt like I had insured myself properly with Medicare, she said. So I quit paying attention to the mail.”

With Medicare’s specific approval, a health insurance company can enroll a member of its marketplace or other commercial plan into its Medicare Advantage coverage when that individual becomes eligible for Medicare. Called a seamless conversion, the process requires the insurer to send a letter explaining the new coverage, which takes effect unless the member opts out within 60 days.

Medicare officials refused recently to name the companies that have sought or received such approval or even to say how long the Centers for Medicare and Medicaid Services has allowed the practice. Numerous insurers, including Cigna, Anthem and other Blue Cross Blue Shield subsidiaries, also declined to discuss whether they are automatically enrolling beneficiaries as they turn 65.

But others say they’re moving ahead. Aetna will begin the process soon for its marketplace members in 17 Florida counties. The effort will kick off with individuals who qualify for Medicare in November, Aetna spokesman Matthew Clyburn said. They’ll receive 90 days advance notice instead of the required 60 and a postcard they can mail back, he said, and the company will follow up by phone to make sure they understand the change.

In November, UnitedHealthcare will start to automatically enroll members of its Medicaid plans in Tennessee and Arizona into its Medicare Advantage plans, a spokeswoman said. And Humana, the nation’s second largest Medicare Advantage provider, has asked for federal permission to also do auto-enrollment. The process will benefit people who want to stay with the same insurance company, said Mark Mathis, director of Humana’s corporate communications. It would simplify administration, eliminating a step in the process and help maintain continuity with the same company.

Medicare officials are developing a procedure for reviewing seamless conversion requests as well as a system to monitor implementation, agency spokesman Raymond Thorn said. A company given approval must automatically enroll all Medicare-eligible beneficiaries. But because federal law prohibits marketplace insurers from dropping a member who qualifies for Medicare, both marketplace and Medicare Advantage coverage continue until the person cancels the marketplace plan, Thorn said.

Sally Thomphsen, who lives outside Chicago and had an individual health policy from Blue Cross Blue Shield last year, was more than surprised when she received her member card for a Medicare Advantage plan shortly before turning 65. Printed on the card was the name of her new primary care physician, someone she didn’t know.

“I almost hit the ceiling”, said Thomphsen, who had already enrolled in traditional Medicare. She demanded that Blue Cross cancel her enrollment and reported the situation to Erin Weir, health-care access manager at the local advocacy group AgeOptions. Weir heard a similar story from another local woman, who had received a letter from her insurer saying a Medicare Advantage plan was selected for you because it is similar to your current plan. Unless you contact us, you will be automatically enrolled.



After learning about the problem both from constituents and health-care advocates, Rep. Jan Schakowsky (D-Ill.) wants stronger consumer protections. “I am exploring the option of requiring an opt-in so that Medicare beneficiaries are adequately informed and able to make the choices that work best for them”, said Schakowsky, whose district includes the Chicago area.

The Lovelace Medicare Advantage plan in which Hanttula found herself is run by Health Care Service Corporation, which administers Blue Cross Blue Shield plans covering 15 million beneficiaries in Illinois, Montana, New Mexico, Oklahoma and Texas. An HCSC spokeswoman said it offers seamless conversion enrollment on a limited basis. She would not provide details.

Hanttula finally solved her problem with help from a Medicare counselor at New Mexico’s Aging and Disability Resource Center, who contacted David Lipschutz, a policy lawyer at the Center for Medicare Advocacy in Washington. He advised the counselor to tell Medicare officials that the retiree was enrolled in Medicare Advantage without her knowledge even though enrollment must be voluntary.

Eventually, officials un-enrolled Hanttula from her unwanted plan, restored her traditional Medicare coverage and agreed to cover her medical bills. Lipschutz said giving beneficiaries the chance to opt out doesn’t adequately safeguard consumers. An insurer’s notification letter can easily be mistaken or overlooked in the deluge of marketing materials seniors receive.

“The right to opt out doesn’t exist if they didn’t get the notice or if they did get the notice but didn’t understand it”, he said.

For answers to your pressing questions call Jim Robeson, the Medicare Answer Guy @ (858) 935-9120. Visit website

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