What Is Medicare Open Enrollment?
Key Points – What Is Medicare Open Enrollment?
- The Four Parts of Medicare
- What Has Changed about Medicare Open Enrollment in 2021
- Changes that People Can Make During Medicare Open Enrollment
- Why Medicare Open Enrollment Is So Confusing
- What Medicare Advantage Plans Provide
- Most Important Aspects of Medicare
- Frequently Asked Questions During Medicare Open Enrollment
- 6 minute read
With the Medicare Open Enrollment period right around the corner, Insurance Consultant and Medicare Expert Tom Allen is eager to help those who are preparing to make their selection for 2022. Some of his advice is short and sweet, yet very important. Tom will attest, though, that unfortunately, most Medicare-Related questions don’t have simple answers.
As the countdown to Medicare Open Enrollment continues, Tom answers:
- What Is Medicare Open Enrollment?
- What Are the Four Parts of Medicare?
- What Has Changed about Medicare Open Enrollment in 2021?
- What Plans People Can Make Changes to During Medicare Open Enrollment?
- Why Is Medicare Open Enrollment So Confusing?
Last, but certainly not least, Tom will review some of the most important aspects and misconceptions of Medicare Open Enrollment so you are prepared for the enrollment period. Allen can’t emphasize enough that no question is a dumb question when it comes to anything related to Medicare, especially with Medicare Advantage. Make sure to check out the great resources that Tom suggests so you can alleviate further confusion.
What Is Medicare Open Enrollment?
Medicare Open Enrollment period is given to us annually by Medicare. You can reaffirm last year’s decision or make a choice during the open enrollment period, which is October 15 through December 7. It goes into effect January 1 of the following year.
What Are the Four Parts of Medicare?
Medicare Part A: Medicare inpatient hospitalization.
Medicare Part B: Medicare outpatient cost.
Medicare Part C: Medicare Advantage plans.
Medicare Part D: Medicare Part D prescription drug plan.
What Has Changed about Medicare Open Enrollment in 2021?
Other than the formulary for prescription drugs, nothing.
What Plans Can You Make Changes to During Medicare Open Enrollment?
Just Part D and Medicare Advantage.
Why Is Medicare Open Enrollment So Confusing?
Now, we move on to more of the nitty, gritty details of Medicare Open Enrollment. The open enrollment period applies to Medicare Part D prescription drug plans and Medicare Advantage plans. It does not apply to Medicare supplement plans.
However, that’s the impression that’s given. The business model implemented by Medicare Advantage is to explain why they think life is not worth living if you don’t move to their plan. It’s an extremely profitable strategy by those carriers, and it’s illustrated by how much advertising they do.
“Sadly, 19 out of 20 commercials on TV are Medicare Advantage commercials and at least half the stuff that hits your mailbox is Medicare Advantage. Those commercials and advertisements give you a false impression,” Allen said. “They give you the feeling that you can freely move from plan to plan to during that open enrollment period. I’ve listened to and read them carefully. They they’re not lying, but they give you the impression that you can make a change.”
It really hits home for Tom whenever his friends, family, colleagues, and clients get overwhelmed by the Medicare Advantage avalanche. Allen hopes a lot of people in his position communicate during the Open Enrollment period with existing clients to let them know about new information that they might want to look at.
“I spoke to a lady one afternoon and she had a large dining table that was probably 60% covered by mailings she’d received on Medicare Advantage. They get lost with all the information, so they can’t really decide,” Allen said. “They can’t make an informed choice because they have been overpowered with new pieces. Of course, every carrier will tell you life’s not worth living if you don’t move to us. So, they simply turn neutral and do nothing.”
What Do Medicare Advantage Plans Provide?
First, let’s look back at a huge problem that Medicare was faced with in early-to mid-1990s with the Baby Boomers nearing eligibility for Medicare. Medicare knew that they were eventually going to be way over-staffed and over-computerized, so they went to the private insurance industry and asked to rent or outsource their capabilities.
“I’ll use Blue Cross as an example. Blue Cross prints ID cards and policies, has customer service, and adjudicates claims,” Tom said. “Everything Medicare does, a private insurance company on its individual health business does the exact same thing. Medicare wanted the private industry to act on behalf of Medicare after renting or outsourcing their capabilities. The private insurance industry said, ‘We’re going to make more profit than what we’re receiving right now for our private book of business. Sign us up.’”
It didn’t take long for Medicare Advantage quickly evolve after that. With the Medicare Advantage, there’s a profit consideration statute by statute. The small private insurance industry offers additional benefits on top of what Medicare Part A and Medicare Part B provide. In summary, benefits wise, they do everything Medicare Part A and Medicare Part B do and then throw in additional advantages.
Most Important Aspects of Medicare
Without a doubt, the financial protection is the most important aspect of Medicare. There are two critical pieces to financial protection: getting access to quality health care when you need it and protecting your assets.
“The negative aspect of that is an open-ended potential exposure or erosion of your assets. You’re paying 20% of the cost on Part B,” Tom said. “If it was a $100 bill, you write a check for $20. If it was $886,000, I won’t have any cash to invest. It gives you good quality access to health care.”
One other thing that Allen wants you to be aware of is that Medicare really keeps its finger on the pulse of emerging health care development. There aren’t many things that change more rapidly than health care, but Medicare does an exceptionally good job of watching what’s emerging. Once a new a new procedure, drug, etc. has been approved and established, Medicare is very quick to add it.
“With Medicare, you’re not dealing with 10-year-old health care delivery. They stay cutting edge,” Allen said. “Medicare, unlike most aspects of our federal government, is really attuned to the age group that they’re dealing with. They are nice, friendly people, and give you all the time you need to get the answers to your questions. I give them a great applause.”
Frequently Asked Questions During Medicare Open Enrollment
The main question that Tom frequently fields about Medicare Open Enrollment is “Do I have to re-enroll every year in the current plan I’m in?” The answer is simply no because it just rolls forward.
If you wish to make a change, though, the open enrollment period is the only time during the year you can do that, unless you have a substantial or material change in your lifestyle. For example, if you move from Kansas City to Portland, you will probably have to select a new different carrier. Nevertheless, the differences between those carriers aren’t likely to be significant.
While Tom is happy to remind people that they don’t have to re-enroll in their current plan year after year, he wishes he received more questions about Medicare. He believes that confusion is once again the culprit for why that happens because once people have decided on their plan, they don’t want to deal with it anymore. Tom explains why that isn’t necessarily the way to go, though.
“We had a major carrier that wrote the lion’s share of Medicare Advantage in our marketplace. Two years ago, the number two Medicare Advantage carrier said, ‘OK. It’s time to get serious,’ and amped up their benefits significantly,” Allen said. “They have more benefits and still have a zero premium. There’s a lot of people that likely should make that change and would be better off, but they don’t. I wish people asked me more questions.”
Why Education Is Everything
For the people that do ask Tom Medicare-related questions, the one-stop shop he often directs them to during open enrollment is medicare.gov. Once you’ve reached the website, pick the “Find plans” tab.
“If you have a supplement plan and a Part D carrier, you’ll probably just want to click the tab for Part D only. It will give you the carriers in our marketplace with the least out of pocket expense for your copays for your prescriptions to the most expensive in descending order,” Allen said. “Every year, Medicare Part D tweaks their drug formulary. That’s also the case for Medicare Advantage carriers because they have Part D built into them.”
Tom believes it’s well worth the 15-minute investment every year to see if your current carrier has made changes that will increase out of pocket costs. Better still, you can see if there is a new carrier on the horizon with copays that are going to be less out of pocket for you.
“They all come from the same manufacturer, so you can possibly save money,” Tom said. “Even if you don’t have a change in your prescription drug usage for the year, it is a still good investment of time because carriers will adjust their formularies. This applies to Medicare Advantage as well as Medicare Part D plans.”
Tom has been no stranger to providing essential education about Medicare with Modern Wealth Management. You can learn more from Allen about Medicare on previous episodes of The Guided Retirement Show podcast, including Understanding Medicare Options, Costs, and Coverage, Understanding Medicare Options, Costs, and Coverage Pt. 2 with Tom Allen, and Medicare Supplement Plans, A Closer Look with Tom Allen.
If you have questions about Medicare and would like to talk with Tom, contact us at [email protected] or (913) 393-1000.
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