Medicare Beneficiaries Get it Wrong – We Can Help

By Stephen J. Silverberg
New York Elder Law Attorney

We see more and more of this– a man enrolls in Medicare Parts A and B at age 65. He’s in good health and decides he need not enroll in a Medigap plan. This is fine for a few years until he receives a cancer diagnosis. He calls his insurance agent in a panic, needing to discover how fast he can sign up for a Medigap plan once the election period began mid-October.

However, with his diagnosis, he won’t be approved for coverage. Even if he did initially enroll in a Medigap plan, he probably could not even switch plans.

What about open enrollment, asks an article from Forbes, aptly titled “One Thing That Nearly Every Medicare Beneficiary Gets Wrong”?

Open enrollment doesn’t apply to Medigap plans. It only pertains to Medicare Advantage plans and Part D drug plans. There’s no free pass to a Medigap plan without the underwriting process. You can only obtain a Medigap policy without underwriting is when you initially apply for Medicare.

While this man could have enrolled in a Medicare Advantage plan, it would not have been a good fit. His oncologist didn’t participate in the Advantage networks, and many Advantage plans charge a 20% coinsurance for chemo. He couldn’t afford that.

Understanding how Medicare’s election periods work and applying for the right program at the right time is a critical part of preparing for the health care costs of retirement and aging. Because we have seen how often people have trouble determining the Medicare benefits most suitable for them, we are offering help to clients with these decisions, and how to protect themselves from making very expensive mistakes.

Here are time limits for Medicare enrollment you need to know about:

Initial Enrollment Period –A seven-month window begins three months before you turn 65 (not your full retirement age under Social Security currently age 66) to enroll in original Medicare Parts A and B and sign up for either a Medicare Advantage plan or Part D drug plan. If you have health insurance through your employer, you must still enroll in Medicare Part A. There is no premium for Part A. If you lose your employer health insurance, your initial enrollment period expires seven months after you end your employment. Being eligible for COBRA coverage does not change this period. Generally, the maximum COBRA period is eighteen months. However, even if you choose COBRA, you must still enroll in Part B and Part D within the seven-month initial enrollment period.

Also, if you work for a company with fewer than twenty employees and are covered by your employer’s health insurance plan check with your employer before you turn 65. In this situation, the law says Medicare becomes your primary health insurer unless your employer elects opt-out of this provision. Your employer’s health insurance plan becomes secondary. If your employer has not opted out, you must apply for Medicare Parts A, B and D. If you do not, your employer’s health insurance plan will only pay for benefits Medicare does not cover.

Medigap Open Enrollment Period—A six-month window begins with your initial Part B effective date. You can use this period to apply for any Medigap plan in your area with no questions asked. For people with chronic health conditions, this may be their ONLY opportunity to get Medigap coverage without being turned down.

General Enrollment Period—If you miss your initial enrollment period, you can sign up for Parts A and B during general enrollment, which runs from January 1 to March 31 each year. Benefits begin the following July. Generally, unless you are transitioning from employer-provided health insurance after turning 65, your Medicare premiums are increased by approximately 10% for each year you are late. This increase is for life.

Medicare Advantage Open Enrollment Period – If you are enrolled in an Advantage plan and decide it’s not a good fit, you can go back to original Medicare and get a Part D drug plan or make a one-time change to a different Advantage plan. This period runs from January 1 to March 31.

Annual Election Period—Also known as the “Fall Open Enrollment” this is when you can enroll in, change or disenroll from a Medicare Advantage Plan or Part D drug plan. The benefit under either plan can change substantially from year to year. Your insurance carrier will notify you in September of the upcoming year’s changes in premiums, benefits, copays, etc. You then need to determine if the plan still suits your needs.

If you don’t like your current plan, use the annual election period to apply for a new plan starting on January 1.

However, this does not give you a free pass into a Medigap plan.

Understanding Medicare is overwhelming for everyone. In weeks to come, we will be talking more about Medicare and how our office is making it easier for seniors.

If you have questions, call us at 516-307-1236 and ask for a Medicare Review Appointment.

About the Author
Stephen J. Silverberg is nationally recognized as a leader in the areas of estate planning, estate administration, asset preservation planning, and elder law. He is a past president of the prestigious National Academy of Elder Law Attorneys (NAELA), and a founding member and past president of the New York State chapter of NAELA.