Medicare policy and politics are making big headlines these days. But as political leaders debate the long-term future of the government health care program, people still need to make coverage decisions as they become eligible for benefits.
Any of these decisions could involve navigating a labyrinth of choices and deadlines. Perhaps you take a drug that costs $2,000 a month. Or your employer is providing health care benefits even though you’ve already turned 65. Or maybe you plan to head south for several months each winter.
Such variables make a big difference in how your coverage works. And there is no single right answer.
“It is very complex,” said Peggy McDonough, a regional director of the Massachusetts assistance program known as Serving Health Insurance Needs of Elders, also know as SHINE.
The most important deadline is your 65th birthday, which is when most folks qualify for Medicare. You can sign up online at www.medicare.gov or at a Social Security office starting three months before your 65th birthday. The initial sign-up period runs seven months.
What do you sign up for? That depends.
Medicare Part A covers hospitalization. There’s no reason to delay here, since there’s no cost for this coverage. Miss the initial sign-up period, and you’ll have to wait until the next general enrollment period which runs January through March. Your coverage then won’t begin until July, so if you get ill before then, you’ll be paying hospital bills by yourself.
Different rules govern Part B, which covers doctors’ visits, medical tests, and outpatient procedures. There are monthly premiums — currently ranging from $104.90 to $335.70 depending on income — so don’t sign up for Part B until you actually need it.
People still covered by employee health plans, for example, effectively get an extension. Ditto for people covered by a spouse’s employee benefits — except for same-sex spouses since the federal government doesn’t recognize those marriages. Once employer benefits end, people have eight months to enroll before triggering penalties.
The penalty for missing these Part B deadlines can be painful — a permanent premium increase of 10 percent for every 12 months missed. “Go five years without Part B, and you’ll have to pay a 50 percent penalty on your premiums when you do sign up,” said SHINE’s McDonough.
Too often people mistakenly believe that their retiree health benefits from a former employer will get them a Part B deadline extension. They don’t. Neither will COBRA coverage.
Part D, which provides prescription drug coverage, comes with its own set of deadlines and penalties. There’s no need to sign up if you have what’s called “creditable” coverage — a drug plan at least as good as what Medicare offers. If your plan doesn’t meet that standard — and your provider can tell you if it does — you need to sign up during the initial enrollment period when you turn 65. Once creditable drug coverage ends, however, you have only 60 days to sign up.
There’s a stiff premium penalty for missing these deadlines — a 1 percent increase for every month you’re late. That can add up fast. For example, someone who failed to sign up for Part D when it was first offered in 2006 would now face a penalty of over 80 percent.
Choosing the right drug coverage means not only looking at premiums, but also checking to see if your drugs are covered. The Medicare website can help match your prescriptions to available plans.
In Massachusetts, the state provides help through Prescription Advantage, an income-based program that helps with drug copayments. One example: Last summer, a woman needing a cancer drug costing $6,000 a month had hit her initial Medicare drug coverage limit but she was not yet eligible for catastrophic coverage. But since she qualified for the state program, her copay was $7.69, according to McDonough.
Plans offered by Blue Cross Blue Shield, Tufts, Harvard Pilgrim, and others provide an alternative to original Medicare. Known as Medicare Advantage, the plans combine Parts A, B, and usually D in an HMO-like package along with additional benefits that might include vision care and health club reimbursement.
Prices, out-of-pocket costs, and rules governing how you get service can vary considerably, so compare plan details. If you’re going to be in Florida six months of the year, however, Medicare Advantage plans won’t work since they only cover emergency and urgent care when you’re outside your plan area.
Finally, those who opt for original Medicare shouldn’t be without a supplemental policy to cover all the things that Medicare doesn’t, such as copayments and deductibles. Massachusetts residents have an advantage here. The state doesn’t let insurers screen for preexisting conditions for supplemental policies. Moreover, Massachusetts residents can sign up for supplemental policies at any time, thanks to continuous open enrollment.
Remember, you get to change your mind about most of your Medicare choices during the annual open enrollment period, which runs from Oct. 15 through Dec. 7 every year. Even if you’re happy with your Medicare coverage, you should review your options. “These plans can change the drugs they cover even in the middle of the year,” said Lucy Meadows a Milton health insurance adviser. “A different plan might be better for you.”