Look carefully at the fine print before choosing a medicare option, part 2

Published 7:00 am Friday, November 25, 2016

Get ready to make some decisions. Medicare open enrollment begins October 15 and runs through early December. It’s the time when seniors and disabled people can switch plans to cover gaps in Medicare’s coverage.

Premiums for Medigap policies are often higher, but people who have traditional Medicare and a Medigap policy face no restrictions on what doctors they can use.  MA plans require seniors to use only providers in the insurers’ network. A recent Kaiser Family Foundation study of 20 counties found that on average MA plans included only about half of the area hospitals in their networks; 40 percent of the plans did not include a National Cancer Institute-designated cancer center.

MA plans come with high out-of-pocket maximums a senior must reach before the insurer will begin paying 100 percent of their medical expenses. In 2016 the maximum could be as high as $6,700.

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Also, seniors are sometimes surprised to learn that they are on the hook for 20 percent of the cost of expensive chemotherapy drugs until they reach the out-of-pocket limit. Too many sales people gloss over this crucial point.

While there is no limit on out-of-pocket spending for those in traditional Medicare, many seniors buy Medigap plans that limit their exposure to high out-of-pocket costs.

During open enrollment people already covered by a Medicare Advantage plan can choose a different MA plan.

Seniors enrolled in traditional Medicare with a Medigap can also switch to an MA plan.  But later on if they don’t like their MA plan, their options are limited.

Here’s the catch. They can always return to traditional Medicare during open enrollment, but they can’t always get a Medigap to cover the gaps. That depends on their state.  Some allow people to buy Medigaps after returning to traditional Medicare.  Others don’t.

Research shows that very little is really known about how MA plans care for people who become seriously ill or who need specialty care, says Tricia Newman, senior vice president of the Kaiser Family Foundation.

Healthy 65-year-olds don’t always think about that possibility at an insurer’s sales event.  She added seniors who opt for Medicare Advantage plans when they first go on Medicare may be making an irrevocable decision by giving up their right to purchase supplemental insurance later in life.

If you’re not sure of your options, it’s best to contact your state’s State Health Insurance Assistance Program (SHIP) for help understanding the costs and benefits of the different options. 

What has been your experience with Medicare Advantage plans? Write to Trudy at trudy.lieberman@gmail.com.

By Trudy Lieberman