Medicare 2013: It’s That Time of Year Again and Medicare’s Still Not Simple
In 2011 I wrote that signing up for Medicare is not simple (link broken). Well it’s time for an update and the bad news is that Medicare is still not simple. Here is an update to my 2011 explanation:
If you’re turning 65 soon and looking forward to the simple life…
No, this post is not about shuffle board, falling and failing — and now again rising — 401Ks, bingo, or problems with Social Security debt (which most about to be 65-year-olds don’t have to worry about until they’re 66 or 67). This is a “welcome to Medicare” blog post and I signed up last year. If you were already collecting Social Security when you turned 65 like I was, you should get a 150-page version of this information from the government in the mail two or three months before you turn 65.
(NOTE: The above photo is the 2012 cover of the Medicare and You booklet. A 2013 version will be released shortly and mailed to all Medicare beneficiaries as well as those turning 65 who are already on Social Security. Do your bit for the national debt and a forest in Orgegon and go online and say you only want electronic distribution.)
You will not receive the book automatically before you turn 65 if you are not signed up for Social Security. If that applies to you, go to your Social Security office or go online to sign up for Medicare even if you do not want Social Security yet.
If you’re anywhere north of 63, you already receive about three mailings a week about Medicare from AARP, Blue Cross, Cigna… (I can run the alphabet with the return addresses on Medicare-insurance-company mailings).
I’ll start with the bad news.
- If you’re familiar with signing up for health insurance once a year during open enrollment, sorry but Medicare is not that simple. Medicare has at least a half dozen different open or special enrollment periods each year.
- The health insurance you’re probably used to probably is the same everywhere in the state in which you live. Sorry but Medicare is not that simple. Much of what I’ve written below varies by county within state; read the fine print on anything you sign (good advice for all senior-citizen issues of course).
- If your employer typically gave you a choice among three plans, sorry but Medicare is not that simple. Get ready for a brain teaser of a flow chart designed to gauge your genetic disposition to dementia (see below). In Massachusetts there are as many as 50 choices as you work your way through this chart; in many states there are more.
- “Original Medicare” includes high-deductibles and co-pays, lifetime limits (that is, no catastrophic coverage), no drug/vision/annual-physical/aural/dental coverage, and geographic restrictions (especially important to those of you who live in northernVermont, New Hampshire or Maine).
- To overcome these limitations, over 80% of Medicare recipients nationally buy private supplemental insurance in one of the ways indicated in the Medicare and You booklet. These supplemental choices include:
- Medicare Part C – This is the choice of about one in five in Massachusetts. Typically but not always, a Part C plan is an HMO. On the plus side Part C (also called Medicare Advantage) is typically less expensive than “rolling your own” (to use an expression from our generation). In some counties in Massachusetts, at least one Part C plan is available free (but only after you’ve paid your basic monthly Medicare Part B premium–Oh, did I tell you even Original Medicare costs money?).
- Medicare Part D – This is newest form of Medicare, begun in 2006 to cover some prescription expenses. This is where the infamous donut hole comes in; the “hole” is basically a deductible in the middle of a year’s prescription expenses rather than at the beginning the way most insurance works. There are some free D plans in almost all counties and almost everyone, in Massachusetts at least, can change Part D plans twice a year if prescription needs change. No low income seniors are affected by the donut hole and often get free coverage and very low co-pays.
- Non official Medicare private supplement choices include:
- Medigap is private insurance although it is checked out and OK’d by the United States Center for Medicare and Medicaid Services (CMS), the same group that runs Medicare Parts A, B, C and D. There are a half dozen choices of Medigap insurance plans in most states from multiple insurers but Massachusetts only offers two choices and a few insurers, I call the Massachusetts Medigap policies “expensive” and “very expensive.” But they are very comprehensive; premiums vary among insurers.
- Insurance from a former employer or union is typically the best type of supplement but is decreasingly a choice for those turning 65. Make sure you check.
- Oh, did I mention that all of this changes every year? Like I said, Medicare is not simple. The feds change it usually each fall… well because they’re the government. The Open Enrollment period for Medicare Parts C and D for 2013 begins October 15, 2012 and that’s a good time to check all your options. (The state changes its rules usually each summer… based on budget approvals.)
Here’s the good news. As of 2011, “Original Medicare” now includes some common preventative diagnostic tests because of the Patient Protection and Affordable Care Act (PPACA) of 2010. Your parents had to pay for these out of pocket. And the infamous donut hole in Part D is scheduled to become moot over the next 6 years (although the tradeoff will be a higher premium or a larger up front deductible according to the Medicare actuaries). Of course PPACA itself is subject to change (as is everything I’ve written here). In particular, PPACA made major cuts to Medicare Part C and the number of Part C plans available is likely to drop going forward, also according to the Medicare actuaries (Harvard Pilgrim already dropped its C plans in Massachusetts).
(NOTE: Last year I said that Medicare included an annual physical because of PPACA but that turned out not to be true. It does include an “annual wellness visit” but that is not the same as an annual physical. Also I said that PPACA closes the Medicare donut hole. That is also not literally true — the “hole” concept will still be there — but the statement that it closes is effectively true because the average co-pay in the hole will be the same as before reaching the hole as of 2020. Also it is important to remember that only one in 20 Medicare beneficiaries reaches the hole.)
More good news. In Massachusetts there is a lot of public assistance particularly if your only source of retirement income is Social Security. Because of that, in addition to the more than 80% of Medicare beneficiaries that choose some kind of private supplement as noted above, another 14% receive Medicaid to help them “pay” for Medicare (many such Medicaid beneficiaries even use their savings to buy private Medicare supplemental insurance so there is some overlap between the “over 80%” and the 14%.)
And even more good news. There is an easy way to simplify all of this. When you’re about to turn 65 or during the various open enrollment periods, go to your local senior center. Ask for SHINE (outside Massachusetts, ask for SHIP). CMS has certified tens of thousands of volunteer counselors around the U.S.to help you wade through all this “government simplicity.”
Then sit back and enjoy turning 65.