Medicare Supplement Enrollment Periods.
Before we talk about supplements, we need to know a bit about original Medicare to see why supplements exist. Original Medicare is made up of
Parts A & B. Part A is Hospital insurance, and Part B is Medical insurance. Parts A & B are provided through the federal government for seniors and people with disabilities who have worked and paid into Social Security for ten years or more.
Medicare Part A has a $1600 deductible (2023) and this deductible amount changes each year. A deductible means a patient has to pay this amount before Medicare will start to pay for the hospital services incurred by the patient. The deductible is not an annual deductible but a “benefit period” deductible. A benefit period ends when someone hasn’t received inpatient hospital care
(or skilled nursing care) for 60 days in a row.
One can have multiple benefit periods in a year meaning they could have to pay multiple deductibles in a year!
Medicare Part B does have a monthly premium. In 2022 the premium is $164.90 (for someone earning $97k or less annually) and there is a $226 annual deductible. Part B only pays 80% of the expenses meaning the patient must pay the other 20%.
As an example, a knee replacement surgery in the U.S. costs somewhere between $30,000 and $50,000. So 20% would be between $6000 and $10,000 that the patient would pay for Part B copay.
Now that we have an idea of Medicare Parts A & B expenses, let’s see how Medicare supplements play into Original Medicare. There are three different types of supplements sold by private insurance firms to enhance Medicare benefits: Part D prescription plans, Part C Advantage Plans and Medigap supplement plans.
Part D plans are supplements that cover prescription drugs approved by Medicare. Part D plans are annual plans, meaning they expire each December and people should sign up for a plan between October 15 and December 7th of each year for the following year. Each year, two things can change that can affect the cost of someone’s prescriptions. The price of a Part D plan can change, and a person’s prescription list can change. Any change to one of these three things can drastically increase someone’s prescription drug cost in a year. It is recommended that Medicare beneficiaries conduct a Part D plan comparison each year. A ten-minute check can save a person hundreds to thousands of dollars.
Medigap supplement plans are the only supplements that are not annual plans. When someone chooses to purchase a Medigap supplement plan, it is their plan for life if they choose. They are also labeled similarly to the different parts of Medicare by letters A, B, C , D and additional letters through N. Often, people will mix up Parts of Medicare with Medigap plans because of the lettered titles. As mentioned earlier these plans do not expire each year. In California we do have the Birthday Rule which allows owners of Medigap supplement plans to shop around for plans of an equal number of benefits or fewer on their Birthday and for 60 days after their Birthday. For details about these Medigap Plans look for our HICAP Medicare Basics 101 webinars or Medicare and U in-person presentations.
The Part C Advantage Plans are like the Part D plans timeline in that they also are annual plans. Each year enrollees will receive a “Plan Annual Notice of Change” notification letter about changes to their plan. These letters are normally sent out in September by one’s insurance plan. Individuals should read this letter to determine if the plan is still the best plan to meet their medical needs for the following year. For more details on Medicare Advantage plans, look for our HICAP Medicare Basics 101 webinars or Medicare and U in-person presentations. Like the Part D prescription drug plans, Medicare Advantage plans can be changed from October 15 to December 7 for the following January.
To wrap it up, if you are on Medicare, and have a supplement plan, October 15 through December 7th you should be evaluating your
Part D prescription plan or your Medicare Advantage plan which will start the following January. Your Medigap supplement plan can be a lifelong plan, but one can shop around at their Birthday and for 60 days after Birthday for a plan of equal benefits or less.
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