“I’m glad you called and shared this information with me. Every year at this time I wonder if I’m enrolled in the right plan and start looking and researching my options. Without your call today, I might have made a change I would regret.” When my mom made this comment to me, I thought I should share with you what I helped her understand. Below is a brief overview of what to consider during Medicare annual enrollment for 2024.
When is Medicare Annual Enrollment?
Every year, Medicare beneficiaries have the opportunity to change their Medicare Benefit plan. This opportunity is called the Annual Enrollment Period and it runs from October 15th through December 7th. During this time you will most likely start receiving an abundance of mailings and phone calls from different insurance carriers, agents, and brokers. Why? Because they are working hard to increase their membership and annual enrollment is their prime marketing season as it is the only time you can modify your benefit plans (without special circumstances). For now, we are focusing on the annual enrollment period.
Medicare does recognize that there are times that you might make a choice during annual enrollment that you want to revoke. For this reason, there is a special enrollment period from January 1 – March 31. During the open special enrollment period, you can revoke the changes made between October 15th and December 7th . Now that we understand there are two times each year you can modify your Medicare benefits, let’s look at what the actual options are for you.
Traditional Medicare vs Medicare Advantage Plans
The first choice that you need to consider is whether to choose the traditional Medicare benefit plan (Part A and Part B) or a Medicare Advantage Plan (Part C). My call to my parents yesterday was about my continued support for them to maintain their Traditional Medicare benefits supplemented by a Medigap policy. My parents’ personal situation makes this the best choice for them and I did not want them to be dissuaded in any way to change their current benefit plans. What things do you need to consider when evaluating your personal situation? Great question! Let’s look at that below.
Traditional Medicare (Parts A & B)
Traditional Medicare includes both Part A (inpatient/hospital coverage) and Part B (outpatient/medical coverage). There is a premium to be paid for both Part A and Part B. However, most people are exempt from paying the premium for Part A and are only required to pay the Part B premium. In addition to Traditional Medicare, it is advisable to also obtain a Medigap policy to supplement your Traditional Medicare Benefits. These Medigap policies are available through many different insurance carriers. PLEASE KNOW THIS: you are only guaranteed approval of these Medigap policies during your INITIAL enrollment period. This means that if you apply for a Medigap policy when you are very first eligible for Medicare, you are guaranteed to qualify. If you apply for a Medigap policy at a later date, you may be disqualified based on your health condition. Keep this in mind as you read the rest of this article.
| PRO | CON |
| Standard benefits available at a consistent price | Higher overall premiums |
| No pre-authorizations to receive services | No prescription drug coverage – must purchase a drug a plan |
| Eligible to purchase Medigap policy | |
| No geographic or network restrictions on Providers |
Medicare Advantage Plans (Part C)
Medicare Advantage Plans (MA) are required to include all of the benefits of Traditional Medicare. However, the benefits may be subject to prior authorizations or other restrictions. Medicare Advantage plans MAY also include some additional benefits such as vision, dental, and hearing. Effective in 2020 Medicare Advantage plans are allowed to offer benefits for chronic conditions that are not included with Traditional Medicare. NOTE: There are very specific qualifications for these benefits; they ARE NOT available to everyone.
| PRO | CON |
| More available benefits than traditional | Must “qualify” for some of these additional benefits; may have to pay a higher premium for additional benefits |
| Lower overall premiums | Ineligible to purchase a Medigap policy |
| Geographic & Network limitations to providers | |
| Benefits may be subject to pre-authorization requirements |
In Closing
As you can tell from the information above, the bottom line for most people is this: is lower premiums with the potential of additional benefits worth the tradeoff of certain benefits with more providers and higher premiums. This article is a very high level comparison and things for you to consider to ensure you make the best choice for you. Only you can know what is right for you. If you find yourself struggling to make the determination, I encourage you to reach out to your local SHIP office for more guidance. The Center for Medicare Advocacy is also a great resource.
For more information about private health insurance, see Health Spending Accounts: Alphabet Soup Simplified