Medicare Coverage Discussion

When dealing with Medicare, there are times when a person is able to change their health plan during the year, outside of the lock-in period. A review of your coverage at these times may save you money and increase your options for providers.

First, it is important to understand the differences between Original Medicare (OM) and a Medicare Advantage Plan (MA). OM has been around since 1965 and people normally have a Medicare Supplement to fill the gaps approved, but not paid by Medicare. MA plans came into existence as an option to possibly save people and the government money. Briefly explained, MA plans are where a private insurance company sets up benefits, services and pays your Medicare claims. Coverage and provider networks will differ between companies and even between plans with the same company. Most MAs may have a preferred provider network and co-pays for medical services received (e.g. $175 a day for a hospital stay). MAs also have an out of pocket maximum that a person would pay if they incurred a great amount of medical expense in a year. When considering any change, be sure to consider where you are in the out of pocket maximum.

Now, back to where a person could save money or increase/change their provider network. The following are several examples of Special Election Periods (SEPs):

When a person enters a skilled nursing facility (SNF), lives in, or just moved out of a facility. Why would this person consider a change? First, he/she may be in a MA which does not include that SNF in-network. A change to a different company may include coverage for the nursing home desired thus paying an in-network benefit opposed to a lower out of network benefit.

Another reason to change coverage would be to stop co-pays by moving back to OM. Remember, MAs have co-pays for medical expenses possibly including for SNF. A person may not meet criteria for skilled nursing facility coverage, but meet requirements for physical therapy coverage while confined. Therefore, that person may wish to change to OM and buy a Medicare Supplement to avoid co-pays for therapy and save money on overall healthcare costs.

A person may be released from a SNF and require oxygen at home. MAs, again, may have co-pays and OM with a supplement may not, saving you money overall. Alternatively, a person may no longer want to be aggressive in treatment and want to cut Medicare Supplement premiums. They could move to an MA plan from OM and a supplement.

Another example of a person who can change coverage in an SEP is one coming off of Public Aid coverage. Sometimes people inherit money and the addition of assets would remove them from Public Aid. That person would have an SEP and be able to apply timely for a MA or OM with a supplement.

Other examples include when you lose group coverage. In addition, anytime you move you should notify your insurance company. If you move outside of the coverage area, you will need to change plans in an SEP.