Know Your Options Before You Enroll in a Medicare Plan

Takeaways

• Traditional Medicare and Medicare Advantage vary with regard to doctor networks and coverage.
• Be aware of enrollment periods and the implications of switching plans, particularly regarding Medigap policy eligibility and preexisting conditions.

As you approach age 65, you may be inundated with information about Medicare. Before choosing a plan, do your research. If you aren’t fully informed, you could end up making mistakes that will cost you later.

What Is Medicare?

Medicare is a federal health insurance program that helps seniors cover their health care costs. The program also supports people younger than 65 with qualifying disabilities, such as end-stage renal disease.

One option for Medicare coverage is traditional Medicare. This comprises Part A, which covers hospital stays; Part B, which covers physician and outpatient charges; and Part D, which covers prescription medications.

You can then also purchase a Medigap policy that covers some of the gaps in Parts A and B. (For example, traditional Medicare doesn’t cover dental care.) Most states offer numerous Medigap plans, also known as Medicare supplement plans, each of which are designated by a different letter of the alphabet.

The alternative to traditional Medicare is Medicare Advantage (Part C). With Part C, you receive medical care from private companies in one package, without the need for Medigap. To join Medicare Advantage, you must enroll in Medicare Part A and Part B.

Which Plan Should I Choose?

Traditional Medicare generally offers more flexibility with regard to doctors, while Medicare Advantage plans tend to be managed care plans, which means only certain doctors and providers are covered.

To find the right option, first consider your specific health care needs. Do you need to see specialists regularly? Do you want vision or dental services? Do you need to be able to see providers nationwide?

These are some of the considerations when choosing between traditional Medicare benefits and Medicare Advantage. (Check out the Medicare Rights Center website for a robust comparison of the two.)

If you select traditional Medicare, you’ll need to decide whether you also want a Medigap policy and prescription drug coverage.

Can I Change Plans?

Medicare has an annual open enrollment period from October 15 to December 7. During this time, you can switch from Medicare Advantage to traditional Medicare or vice versa. However, it’s not so simple to switch from Medicare Advantage to a Medigap plan that supplements traditional Medicare.

Note that if you apply for a Medigap policy within six months of enrolling in Medicare Part B coverage, a Medigap insurer can’t refuse to sell you a plan based on a preexisting condition. However, after that, insurers can refuse to sell you a policy, delay coverage, or charge a higher premium because of an existing health condition.

Consider this when deciding between traditional Medicare and Medicare Advantage. (The Center for Retirement Research offers an excellent primer on how to make this decision.)

If you leave traditional Medicare for Medicare Advantage and then decide to return to traditional Medicare, you won’t face quite the same problem with Medigap. Once you return to traditional Medicare, you have the right to go back to the same Medigap policy you had before you joined Medicare Advantage, provided the same insurance company you had before still sells it.

If the policy is no longer available, you have a guaranteed right to buy a Medigap policy that is sold in your state by any insurer as long as you had Medicare Advantage for less than a year.

Getting Assistance

Many resources are available for help with Medicare decisions:

• The Medicare.gov website allows you to find and compare plans.
• AARP offers a Medicare question and answers tool on its website.
• Consumer Reports has a guide to getting the most out of Medicare.

For additional guidance, find a local elder law attorney. They can help you navigate your options and assist with other aspects of planning for your future.