Medicare Advantage Plans are contracted with the government to provide health services to Medicare beneficiaries, and these plans receive payments from the government to help cover the cost of care. They are also called Medicare Part C and do not require medical underwriting to get the plan. These plans are rated up to Five Stars that measure their effectiveness in addressing their members’ health concerns. Four and Five-Star rated plans indicate a high level of efficacy in evaluating and rectifying health issues.

The Centers for Medicare and Medicaid rate the plans using a list of measures, including issues like management of chronic disease, member experience, complaints, health maintenance, and customer service. The list of measures is updated annually by CMS so that improved methodology can be applied to more effectively gauge the success of individual plans. Plans that score high can get an additional quality bonus from the government.

Most Advantage Plans include prescription drug coverage or Medicare Part D in their coverage. Part D coverage is rated separately and may be different from the overall plan rating. Part D includes parameters that measure drug pricing and patient safety. A plan may have an overall rating of 5 Stars but a Part D rating of 4 Stars so the rating of the plan would be 4.5 Stars.

Use the rating system as a helpful guide when evaluating Medicare Advantage plans. Also, make sure the doctors you want to see are in network, and check the plan’s formulary to see that your prescription medications are covered.

  1.  Signing up for Medicare Part B when you are still working.  If you are working for a company with 20 or more employees when you turn 65 and covered under group health insurance, you can delay enrolling in Medicare until you retire without incurring any penalties.  You have the option of going on Medicare or staying on your employee health plan.  As long as your group health plan is considered “creditable” (as good as what Medicare offers), you can remain on it until you either leave the company or retire. 
  2. Not getting a Part D Drug Plan when you become eligible.  Even if you are not taking any medications, I recommend my clients get a Part D Drug Plan to avoid the penalty in case you do want a drug plan at some future time.  If you don’t sign up when you are eligible or have creditable coverage (through a group employee plan), a penalty will be applied to your monthly premium when you do sign up.  It is 1% of the “national base beneficiary premium” multiplied by the number of months you went without having a drug plan but were eligible for one.  In 2023 the base premium is $32.74, so 1 % of that would be 33 cents.  If you went 12 months without drug coverage when you became eligible, the penalty would be .33 x 12 = $3.96.  This amount would be added to your monthly drug plan premium for life.  Some drug plans are as little as  $10 a month, and even if you only use it occasionally for antibiotics, immunizations or cold remedies, it is well worth it when down the line you might develop a serious condition that merits more expensive medications.
  3. Thinking that Cobra is creditable coverage. If you have Cobra and become eligible for Medicare, you must sign up for Medicare.  Cobra is not creditable coverage for Medicare, and you could face a penalty on your Part B premium if you don’t sign up for Medicare.  You may have Cobra, however, if you were on Medicare first and had a qualifying event.  In this instance, Cobra becomes your secondary insurance and Medicare is primary.
  4. Assuming a Supplemental Plan and an Advantage Plan are the same thing.  Supplemental plans work differently with Medicare than an Advantage Plan.  They have no networks, and you don’t need referrals to see a specialist.  While you do have to go to providers that take Medicare, you remain in Original Medicare, and the plans are standardized and good throughout the United States.  Advantage Plans have networks that you must use in order to be covered.  You must live in the Service Area of the plan and usually need referrals to see a specialist.  You opt out of Original Medicare, and a private insurer now administers your benefits. 
  5. Not getting a Supplemental or Advantage Plan when you first sign up for Medicare.  If you only have Medicare Parts A and B, you are leaving yourself open to a lot of out-of-pocket costs.  Medicare has deductibles, copays and coinsurance, much of which can be covered through a Supplemental or Advantage Plan.  Many Advantage Plans have $0 premiums, and many Supplemental Plans will cover most of the associated out-of-pocket costs of Medicare without additional copays, so it is well worth it to explore these plan options when you sign up for Medicare, as well as Part D drug plans.

As Annual Enrollment for Medicare Advantage and Prescription Drug plans approaches, it is time for Medicare beneficiaries to take stock of their current plans to determine if a change would benefit them.  Plan members should be receiving their Annual Notice of Changes in the mail to see what modifications (if any) are being made for 2023. But with the influx of new Medicare Advantage plans with myriad benefits, how do you choose the right one for you? Below is a checklist of items you want to consider when trying to make a decision if you are new to Medicare or just considering making a plan change.

1.  Do you want a PPO or HMO plan?  While most Medicare Advantage Plans are HMO’s, there has been an increase in the number of PPO’s being offered.  HMO’s require you to go to network providers or you won’t be covered.  PPO’s give you the option to go out of network, but you will pay more (in copays or coinsurance) if you do.  PPO’s normally have a higher premium because they give you this choice, but it might be worth it if you want to have the benefit of seeing out-of-network doctors.  Medicare Advantage Plan PPO’s should not be confused with Medicare Supplemental plans.  Supplemental plans have no networks but do require you to go to doctors who take Medicare.

2.  If you have a doctor or specialist you want to see, make sure they are in network for the plan you are considering.  Don’t assume that every doctor in a practice is contracted with the plan.  You can call the plan directly or look up the doctor online on the plan’s website to verify if they are in network.  Remember, however, that a doctor may discontinue his contract with the plan at any time, which means you would have to find a new physician if this were to happen.

3.  Do you have specific health issues you want addressed?  Some plans are designated as CSNP’s or Chronic Special Needs Plans.  These plans structure benefits to address certain illnesses like diabetes, certain heart conditions or end-stage renal disease.

4.  Are you on MediCal as well as Medicare?  There are DSNP’s or Dual-eligible Special Needs Plans that coordinate benefits with Medicare and MediCal to make it easier to access doctors and benefits.  They may include extra benefits like vision, hearing, dental, transportation and telehealth services. 

5.  If you take certain medications, make sure they are in the formulary of the plan.  Each plan has a unique formulary, or list of medications that they cover.  Be sure and check this list to ascertain your meds will be covered.  Some plans are part of the Senior Savings Model in which they cap the price of insulin at around $35. While you and your doctor can appeal to the plan to cover a medication that is not in the formulary, there is no guarantee that they will cover it.

6.  If you are new to Medicare, you may choose an Advantage Plan and find that this type of plan is not right for you.  If you cancel the plan within the first twelve months (from the effective date), you will have guaranteed issue rights to switch to a Supplemental plan, which means you can get a Supplemental plan without going through underwriting or answering medical questions.  If you wait longer than the twelve-month period, you would be subject to underwriting and could be turned down for a Supplemental plan.

Medicare is a complicated topic, so if you are confused, an experienced broker can help answer your questions and address your concerns. A local broker will be familiar with the plans available in your area, the physician networks contracted with the plans, and can help narrow down your choices based on your specific needs.

The No Surprises Act went into effect January 2022 as part of the Consolidated Appropriations Act of 2021.  The purpose of the Act is to address surprise or balance billing that health plans charge when you use out-of-network providers.  It prohibits insurers from charging higher rates or denying claims for care obtained from out-of-network providers for emergency services, and in some cases, certain services provided by out-of-network clinicians at in-network facilities.  It stipulates that the health plan must cover these services as if they were in-network.

The Act also requires insurers to send beneficiaries an Advanced Explanation of Benefits (AEOB) for upcoming procedures or services as a “good faith estimate” of the costs that you will incur.  Provided information in these AEOB’s should cover whether each provider or facility is in-network or out-of-network, the contracted rate of the service, how to obtain only in-network providers, all expected charges, any cost-sharing amounts and whether prior authorization (or other stipulations) apply.

Many plans may try and get around these requirements by having you sign a Surprise Billing Protection Form.  Think carefully before signing this form as it may limit your consumer protection rights.  It essentially says that you are willing to pay out-of-network rates for any services administered by out-of-network providers. The form must be given to you at least 72 hours before you receive care, and a good faith estimate should be included on the form. Providers prohibited from giving you this form include emergency room doctors, anesthesiologists, assisting surgeons and radiologists.

Most people sign up for Medicare to begin the first day of their 65th birthday month.  You can get Medicare prior to your 65th birthday if you are disabled or have permanent kidney failure.  If you are still working and have a group employee health plan, you can postpone signing up for Medicare until you retire.  You won’t be charged a penalty on your Part B premium as long as your group plan is creditable (or coverage that is as good or better than Medicare).  When you do retire, you have eight months to sign up for your Part B beginning with the month after your group health plan ends or the employment it is based on ends. If you remain working but still plan to go on Medicare, there is another issue you should consider.  Your Part B and Part D (drug plan) premiums can be surcharged based on income.  If you have a high income, these surcharges may apply.  Since most people’s income goes down when they retire, you might want to wait until then to go on Medicare. 

Once you have decided to go on Medicare, you can sign up online or go to your local SS office if you want to speak to someone in person.  You will sign up for Part A (Hospital Services) and Part B (Doctors’ Services).   Once enrolled in Medicare, you can choose a plan that is provided by private insurance companies to help cover the gaps in Medicare.  These are Supplemental or Advantage Plans.  If you want prescription drug coverage, that would be a Part D plan, also provided by private insurance companies.  An experienced broker can explain the differences between these plans and how they work with Medicare.  

Most people know that the Medicare Annual Enrollment Period is October 15 through December 7.  The barrage of commercials featuring aged sports icons and actors not seen on television in decades starts in early October and doesn’t end until well after the holidays.  But there is another enrollment period called the Open Enrollment Period (OEP) from January 1 through March 31 in which you can still change your Advantage Plan if you are not happy with your previous choice.  This coincidentally coincides with the Medicare General Open Enrollment Period in which you can sign up for Medicare if you failed to do so during your Initial Enrollment Period (when you turn 65). 

During this OEP period, you can change to a different Medicare Advantage Plan or switch to Original Medicare (and enroll in a Part D drug plan).  If you want to add a Medicare Supplemental Plan, you might have to go through underwriting (answer medical questions) unless you were in your Advantage Plan for less than a year or have a Special Enrollment Period that applies (such as having moved out of the service area of your Advantage Plan).

Reasons you might not be happy with your original choice include:  Discovering your doctor or doctors are not in network for the plan  –  Finding that some of your medications are not in the formulary of the plan – Discovering the cost of your medications on the plan are higher than expected – Finding the network of available doctors and specialists too limited

Whatever the reason, you will be able to change your plan and not have to wait until October 15 when the Annual Enrollment Period begins again. If you make a plan selection in January, your new plan will start February 1. If you wait until March, your effective date would be April 1. Unlike the Annual Enrollment Period in which you can make several choices with your last application submitted being the plan you end up with, you will have only one opportunity to choose a plan during OEP.

Medicare recipients are facing more choices than ever before this Annual Enrollment Period (AEP) as carriers roll out plans with rich benefits, zero dollar premiums, and even reimbursements on Part B premiums.  So how should you narrow down the many options?  Here are some things to look for when contemplating a plan change.

  1. Look beyond the gimmicks.  A plan might have a lot of benefits, but if your doctor isn’t in the network, or if the network is so skinny you will have trouble finding providers, it might not be worth all the “extras”.
  2. Look at your ANOC, Annual Notice of Changes, to see if your plan is still the best one for you. If your premium or deductible is going up or your out-of-pocket maximum, you might consider a change.  Also, look at benefit changes.  Did your copays and coinsurance increase?  Are your medications still covered in the plan’s formulary? 
  3. Plans change networks frequently, so make sure your doctor is still in the plan’s network.  Also, look at any specialists you’ve been seeing to make sure they’re still in network as well.  Remember, if you go out of network, with most Advantage Plans, you will not be covered.
  4. Some plans have special features like low-cost insulin for people with diabetes.  These plans cap insulin costs at $35 or lower.  There are also plans now for those with End Stage Renal Disease that will help cover the cost of dialysis and plans for those with chronic medical conditions like heart disease.  If you have any of these conditions, these plans would be worth a look.
  5. There are also rich plans for those on Medicare and Medicaid.  These plans help coordinate care, give you extra benefits, like transportation to and from doctors’ appointments and meals after a hospital stay, and make it easier to find providers that accept both Medicare and Medicaid.
  6. Not all plans are available in all areas.  Plans are divided into service areas (usually a county) so they are specific to that region.  Make sure you are looking at plans in your area when comparing benefits, pricing, and provider networks.

If you have made the decision that you want to go with a Supplemental Plan to help cover the gaps in Medicare rather than an Advantage Plan, how do you narrow down your choices to get the plan that best fits your needs? Here is some information that might help.

There are ten basic supplemental plans you can choose from lettered A, B, C, D, F, G, K, L, M and N.   The ones that are going to give you the most coverage are F, G and C.  To get an F or C plan, you must have been eligible for Medicare before January 1, 2020.  Plan G has the same benefits as the F plan, except that you have to pay the Part B annual deductible of $203. Plan G also has the same benefits as the C plan, except you must pay for Part B excess charges (up to 15% more for doctors who are not on assignment with Medicare’s fee schedule).  All the supplemental plans are standardized, which means they have all the same basic medical benefits regardless of carrier.  Some F and G plans have extra benefits added, like vision and hearing, and some F and G plans have a high deductible version of the plan.  What differs among these plans is the premium.  Each company charges a different rate for each plan. Price is determined by the age you will be on the plan’s effective date and the location where you live. 

Another factor that influences cost is the type of plan you choose.  The plans with the most benefits are going to cost more than a plan with fewer benefits.  The F plan will be the most expensive with the most benefits, followed by the G and C plans, then D, A and B.  Lower cost plans like K and L have an out-of-pocket limit which you must meet before the plan pays 100% of costs.  Plan M pays only 50% of the Part A deductible, and the N plan has copayments for office and emergency room visits.   Some companies give first-year introductory discounts of up to $30 off your monthly premium, as well as household discounts of up to 5 to 7% for members of a family who have the same plan.

If you decide you can live without some of the benefits and pay out-of-pocket costs yourself, you may save on up-front premium costs if you decide to go with a lower-level supplemental plan.  All the plans are going to give you one of the most coveted benefits of all, however, which is the freedom to go to any doctor that takes Medicare with no referrals to see specialists, anywhere in the United States.  Most people choose a supplemental plan for that one reason, because they don’t have to worry about networks and referrals when selecting a provider for their healthcare.

The American Rescue Plan Act (ARPC) extended the Special Enrollment Period to allow consumers to sign up for healthcare on the federal marketplaces until August 15, 2021.  This gives additional time for those seeking health insurance to take advantage of the new rules expanding coverage for millions who have suffered financial hardship due to the COVID-19 pandemic. 

Here are few things to consider when signing up.

If you have more than one SEP (marriage, adoption, birth) use the SEP that will give you retroactive coverage to the date of the qualifying event.  The SEP for the COVID-19 pandemic is not retroactive and would start the month following the month in which you apply for coverage.

You can change plans during the SEP after thirty days of coverage if you have another qualifying event.  However, be aware that if you had a birthday in the interim, you might be rated higher on the new policy (your premium may be higher).

Individual states may also offer the SEP to off-exchange plans. 

Cobra recipients may use the SEP to access a marketplace plan.  The American Rescue Plan Act is currently subsidizing Cobra premiums 100%, but this will expire (unless extended) on September 30, 2021. The ARPC also allows you to obtain Cobra coverage if you previously declined it.

The Low Income Subsidy (LIS) federal program helps Medicare Part D beneficiaries pay for costs associated with their Part D prescription drug plan.  To be eligible to participate in the program, the insured must meet certain asset and income levels which can change yearly, and they must also have Medicare Parts A & B.  Part D plan premiums can be covered from 25 to 100 percent, depending on where the recipient falls on the Federal Poverty Level (FPL).   For 2021, yearly gross income limits in California are $19,560 for individuals and $26,370 for married couples. 

Full-benefit dual eligible, those who receive Supplemental Security Income, and those enrolled in a Medicare Savings Plan automatically qualify for the program.  Late enrollment penalties may also be reduced or eliminated once enrolled.  Consumers who become eligible for LIS have a Special Election Period to enroll which may be used once per quarter from January through September.