Medicare Open Enrollment Is Here: 3 Must-Know Facts

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On Oct. 1, millions of uninsured Americans got their first chance to sign up for the health insurance exchanges that the Affordable Care Act created. Yet in all the attention that the new Obamacare exchanges have received, another important event for health care coverage has largely gone unnoticed -- even though it potentially affects even more of the American public.

More than 50 million Americans are eligible for Medicare according to the Department of Health & Human Services, and every year, Medicare participants get a chance to choose or make changes to their existing coverage options under the program.

With the annual open enrollment period running from Oct. 15 to Dec. 7, those eligible for Medicare -- typically Americans age 65 or older -- need to be prepared to make smart choices about their coverage.

Here are three things you should know in helping you make your decision.

1. Obamacare Open Enrollment Is Entirely Different From Medicare Open Enrollment.

One major source of confusion among Medicare recipients comes from the fact that the inaugural open-enrollment period for Obamacare is happening at the same time. However, if you're eligible for Medicare, you won't get your insurance from an Obamacare health insurance exchange, and if you visit the exchange websites, you won't find Medicare as an option. Moreover, the insurance policies you will find on the Obamacare health insurance exchanges won't be appropriate for Medicare recipients, as they won't take Medicare's provisions into account.

Instead, the Medicare website is the best place to start in signing up for Medicare or choosing a new coverage plan. There, you'll find detailed information to help you learn more about your available options and find out about the various plans that are available to you.

2. Changing Plans During Open Enrollment Can Be Especially Smart If Your Health Has Changed.

One of the most important aspects of Medicare open enrollment is that it allows Medicare recipients to tailor their coverage to their particular needs. Although traditional Medicare Part A and B coverage doesn't involve much decision-making, prescription drug coverage under Part D gives Medicare recipients many different choices. Some Part D plans offer comprehensive coverage of prescription drug costs but at higher monthly premiums, while other Part D plans have much lower monthly costs but don't pay for as much of your potential prescription-drug expenses.

If your health hasn't changed much during the past year, you might well find that your existing Part D coverage still suits your needs and therefore won't need to make major changes. But if your health has changed markedly, requiring you to take new prescription drugs, looking at other Part D plans might save you money. Paying higher premiums might actually reduce your overall costs if a new plan covers more of the out-of-pocket costs of obtaining your prescriptions.

3. Understand the Medicare Advantage and Medigap Coverage Options.

Another source of confusion for Medicare recipients involves the difference between traditional Medicare, Medicare supplemental insurance, and Medicare Advantage plans. Traditional Medicare covers you for medical services from any provider that accepts Medicare, but it doesn't cover all of the costs of those services. In order to cover the rest, those who have traditional Medicare can get Medicare supplemental insurance from third-party insurers, with policies designed to fit Medicare's broad coverage.

On the other hand, Medicare Advantage plans often take the place of traditional Medicare coverage, with many plans offering both medical services and prescription-drug coverage in one package. Medicare Advantage plans often involve networks of physicians through health maintenance organizations or preferred provider organizations, so you might not have as much flexibility to choose whatever doctor you like. Assessing the cost differences can be complicated, but the right choice can nevertheless produce substantial savings.

Make the Smart Choice

It's easy to let Medicare's open enrollment period pass you by without a thought, especially if you've largely been happy with your existing coverage. But this is the only chance during the year you have to assess what you're spending on health expenses, so taking the time to see if a new Medicare coverage option would save you money is well worth the effort.

You can follow Motley Fool contributor Dan Caplinger on Twitter@DanCaplinger or on Google+.

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November 30 2013 at 1:56 PM Report abuse rate up rate down Reply

Back in the 90's many "advantage plans" promising that signing over Medicare payments to pay for coverage tanked. They are back offering doctors not necessarily conveniently located for whom English is a second language and offices are not especially well-equipped. I drive seniors to many of these offices and watch as they fork over co-pays for visits and procedures that would easily cover Medicare Part B premiums that would allow them a choice of doctors. Advantage plans for seniors is a far worse deal than the HMO's many were forced into when I was working.

October 04 2013 at 7:29 PM Report abuse rate up rate down Reply

Boehner: "Mr. President, you must let us kill the Affordable Care Act."
Obama: "No way. Can't we come to some kind of compromise?"
Boehner: "Sure. As long as you let us kill the Affordable Care Act."
Obama: "No."
Boehner: "Look, everybody! Obama refuses to compromise!"

October 04 2013 at 5:23 PM Report abuse +9 rate up rate down Reply
1 reply to chris1011's comment

chris1011,.......the Duke of orange needs a tissue.

October 04 2013 at 8:13 PM Report abuse +1 rate up rate down Reply

I'm still baffled as to why republicans hate the Affordable Care Act so much. Basically, all it does is provide a way for people to buy their own insurance that can't be canceled or denied. And if they want to opt out then there's a nominal tax that helps to cover their potential cost to the system should they get sick and not be able to pay. And right now they won't even force you to pay the tax, just withhold your tax refund if you have one. This is "the worst law in the history of mankind?" Really?

October 04 2013 at 4:42 PM Report abuse +6 rate up rate down Reply
1 reply to chris1011's comment

They're heavily invested in insurance companies and big Pharma, which is why those corporations donate so much to politicians. They feel their stocks will suffer because now insurance has to cover people with pre-existing conditions and other health maintenance coverage. They can't cancel you and only keep the "cream of the crop" premium payers like they did before. It's ALL about Republican and corporate greed.

October 05 2013 at 12:50 AM Report abuse +1 rate up rate down Reply

does medicare have the option to recover one's personal assets, like a home after the meidcare recipient dies?

October 04 2013 at 4:41 PM Report abuse -2 rate up rate down Reply
3 replies to angieolinger's comment
Ah Shucks

Obama care is a total rip off. Pay the fine you'll be better off.

October 04 2013 at 4:19 PM Report abuse -5 rate up rate down Reply
4 replies to Ah Shucks's comment
Hi Gram, Ty&Dill

Note: If you get medicare and your spouse gets coverage thru obamacare, your SS income will be counted when figuring the subsidy but not what you pay for your medical coverage. The subsidy only applies to your spouse's coverage, making it unaffordable.

October 04 2013 at 10:36 AM Report abuse rate up rate down Reply
1 reply to Hi Gram, Ty&Dill's comment

How does that make it unaffordable? It simply means the subsidy takes into account joint income and generally a person on Medicare pays $104.90 towards their premium and half that for prescription drug coverage, I am just not sure of the connection you are trying to make.

October 04 2013 at 4:31 PM Report abuse rate up rate down Reply