If you’re like most people our age, you’re getting bombarded with insurance company email, snail mail, and TV commercials telling you that Medicare open enrollment is in effect until December 7. What’s the aim of all this insurance-industry advertising? To cajole you into ditching traditional Medicare Parts A & B and enrolling in one of the numerous Medicare Advantage plans run by private insurers. Or, if you’re already enrolled in one, to switch to theirs. And they do this by offering big incentives such as $0 copayments and benefits not provided by traditional Medicare.
But before you make a decision one way or another, I strongly urge you to read this investigation by the NY Times, published earlier this month: The Cash Monster Was Insatiable’: How Insurers Exploited Medicare for Billions.
As someone who follows Medicare professionally, I can tell you this is just the tip of a very dirty iceberg.
“The health system Kaiser Permanente called doctors in during lunch and after work and urged them to add additional illnesses to the medical records of patients they hadn’t seen in weeks. Doctors who found enough new diagnoses could earn bottles of Champagne, or a bonus in their paycheck.”
“Anthem, a large insurer now called Elevance Health, paid more to doctors who said their patients were sicker. And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.”
“Each of the strategies — which were described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed. But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program.”
Also take look at Justice Department files civil lawsuit against CIGNA for artificially inflating its Medicare Advantage payments. According to the United States Department of Justice, most health insurance companies have been accused of Medicare fraud.
Billions of dollars in fraud! As a tax payer and a Medicare beneficiary, I’m angry and appalled. How many times have we been told by our legislators that the Medicare system is in financial trouble? Fraud committed by insurance companies and lack of oversight by an underfunded Center for Medicare and Medicaid Services (CMS), the federal agency who’s job it is to make sure fraud is kept to a minimum, look like a significant pieces of that equation. In short, Medicare fraud is a multi-billion dollar industry unto itself.
If, like me, you’re sick of lining the pockets of Big Insurance, call or write to your Representatives and your Senators and tell them you’ve had enough.
Now on to open enrollment.
What is open/annual enrollment?
According to medicare.gov, the only official Medicare website, regardless of the number of companies that have Medicare as part of their name, there are three enrollment periods, and they mean three different things.
1 - Initial Enrollment Period (IEP)
This is the time frame in which you first become eligible for Medicare. It begins three calendar months before the month you turn 65 until three calendar months after. So, if you turn 65 on December 20, 2022 your initial enrollment period began on September 1, 2022 and ends on March 31, 2023. If you enroll in Medicare during this period, but prior to your birthday, your benefits start at the beginning of your birthday month i.e., December 1, 2022.
During this time, you must enroll in Medicare Part A (hospital coverage) and Part B (outpatient coverage), or a Medicare Advantage plan (formerly and sometimes still known as Part C), and a prescription drug plan (Part D) if it’s not part of the Medicare Advantage plan. You have the option of enrolling in a Medigap/Medicare supplement plan if you choose, but only along with Parts A and B.
There are exceptions.
If you’re still working or covered under a spouse’s insurance, you still have to sign up for Part A, but you can put off getting your Part B benefits. It’s best to check with your HR department to see how the individual plan works with Medicare.
Here’s what business-writer Carla Fried of rate.com has to say: Still working at 65? Avoid this Medicare mistake.
Why is the Initial Enrollment Period so important?
Unless you’re covered by one of the exceptions, there are penalties and other costs associated with not enrolling during that time even if you don’t start using Medicare right away.
For example, if you enroll in original Medicare (Part A and Part B) and decide to add a Medigap/Medicare supplement plan, which is private insurance, during your initial enrollment period you won’t be subject to medical underwriting. But if you do so after this period you could be denied coverage completely, or be subject to medical underwriting. Regulations vary from state to state and can be confusing.
Part D (private insurance for prescription drugs) also carries a penalty for not enrolling. Medicare.gov outlines it here.
2 - Annual Open Enrollment Period
Every year between October 15 and December 7 you can join, switch, or drop a plan. As long as you make your request by December 7, your coverage will start January 1 of the next calendar year. For all practical purposes this means:
you can change your current plan
you can switch from traditional Medicare (Parts A and B) to a Medicare Advantage plan (private insurance that has coverage limitations) and vice versa
you can choose a different Part D (private insurance for prescription drugs) plan.
3 - Medicare Advantage Open Enrollment Period
If you’re already enrolled in a Medicare Advantage plan (private insurance that comes with restrictions) you can switch to a different Medicare Advantage plan or switch to original Medicare and buy a separate Medicare Part D plan. This occurs from January 1 to March 31, and you can make a switch only once during each annual period.
Some additional notes on Medicare Advantage
As you weigh your options, take a look at what Liz Weston, a personal finance columnist for the Los Angeles Times and Nerd Wallet has to say:
“Medicare Advantage plans are offered by private insurers as an all-in-one alternative to traditional Medicare, the government-administered health insurance program for people 65 and older. Medicare Advantage plans typically cover some things that Medicare does not, such as vision, dental and hearing care, but the plans also have regional networks of providers you’re expected to use. You’ll pay more, and sometimes all, of the bill if you use out-of-network providers.”
In other words, the Medicare Advantage plan is your insurance plan, NOT Medicare. You will be limited to a network of doctors, hospitals, and other healthcare-providers. Plus, any medications you take and the amount you pay for them will be subject to the insurance plan’s formulary.
You can’t assume that your current doctors will be in network. Even if they do accept Medicare, they don’t necessarily accept your particular Medicare Advantage insurance or even any Medicare Advantage insurance. And you’ve got to verify this for yourself because doctors join and leave networks all the time. In addition, the directories of in-network doctors the insurer provides are not always accurate or up-to-date.
Don’t let Medicare Advantage sales agents sell you on the basis of their dental, vision, and hearing-aid coverage until you ask exactly what is included and how much you have to pay for care.
But here’s a hint: coverage is pretty spare and you have to stay within their network. And if you’re thinking well, that’s fine I can go and have that crown or inlay taken care of, think again. The dental coverage is usually limited to one or two annual exams and cleanings per year. Vision and hearing aids have similar restrictions.
Toni L. Kamins