Every year during the fall open enrollment period, thousands of Medicare beneficiaries switch from their Medigap coverage over to Medicare Advantage. Many of them don’t fully understand how Medicare Advantage plans work and are soon dismayed. Luckily, Medicare has a disenrollment period for this situation, and in this post, we’ll explain how to use it.
About Medicare Advantage Plans
Medicare Advantage plans are also called Part C of Medicare. These plans were created under the Balanced Budget Act. Essentially, Medicare Advantage plans are a form of private Medicare coverage. You get your Part A and B benefits directly from an insurance company instead of from Medicare. Medicare then pays those insurance companies a monthly fee to deliver your benefits.
The plans offer low premiums in an attempt to attract beneficiaries to the coverage. They also sometimes offer attractive extras like hearing exams or fitness club memberships.
Medicare Advantage plans are a form of managed care, which means that most plans have a network of providers from whom you will get your care. HMO plans are the most popular because they are generally the cheapest. Some plans may even have a $0 premium. However, most HMO plans require you to see only their providers. If you seek care outside the network, that care will not be covered except in an emergency. PPO plans are more flexible and therefore, usually cost more.
Before you sign up for a Part C plan, you should check the plan’s network directory. Make sure that your doctors participate in the network. Many Advantage plans also include Part D coverage, so you should also check the plan’s drug formulary to confirm that your medications are included.
To stabilize the Medicare Advantage market, Congress created election periods for Medicare Advantage plan. You can enroll during your initial enrollment period or during the fall annual election period. However, once you enroll, there is a lock-in period until the end of that calendar year. You cannot disenroll from the plan arbitrarily.
While this creates the stability that was intended, it also causes unexpected problems for seniors. Many Medicare beneficiaries are uninformed about how these plans work. Often, they join the plan because of the low premium, and they don’t realize until January that their doctor isn’t in the network or that they will owe copays as you go along for medical services.
For example, you might pay $15 to see your family doctor or as much as $50 to see a specialist. Copays for hospital stays and ambulance rides can be hefty. There are even some benefits where the member owes 20% of the cost of the service. While each plan has an annual out of pocket maximum to protect you, you could easily spend thousands before you reach that.
This scenario is why the Medicare Advantage Disenrollment Period was signed into law. It provides beneficiaries a way to get back to Original Medicare without waiting a full year for the next annual election period.
Disenrolling from Your Medicare Advantage Plan
The MADP is a six-week period that begins on January 1 and then extends through February 14. You can leave your Advantage plan for any reason during this window. When you do, you will go back to Traditional Medicare.
Since your Medicare Advantage plan may have included Part D, you can choose a new Medicare Part D plan so that you will still have prescription drug coverage too.
One thing to consider is that leaving your Advantage plan doesn’t mean that you can re-enroll into a Medigap plan with no health questions. In most states, unless this was your very first time in a Medicare Advantage plan, you will need to apply for a Medicare Supplement and go through medical underwriting. The insurance company underwriter can review your health history and medications, and they can turn you down for medical reasons.
Always be sure to submit your application for a Medicare Supplement Medigap plan to make sure you can get approved before you notify the Advantage plan carrier that you are leaving that coverage.
Working with a Medicare insurance broker can help ensure a smooth transition from your plan back over traditional Medicare.
Written by: Danielle Kunkle from Boomer Benefits