Mary Beth Franklin

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Mary Beth Franklin - also known as the 'client whisperer' - on what your clients really want when they talk about retirement.

Mary Beth Franklin: 5 reasons to shop for new Medicare coverage

Rising premiums, changing prescriptions top the list

By Mary Beth Franklin

Nov 28, 2012 @ 11:11 am (Updated 3:17 pm) EST

Medicare

Time is running out for most Medicare beneficiaries to switch their health care options for 2013. The annual open enrollment season ends December 7, but seniors living in areas affected by Hurricane Sandy, as well as their friends or family members on whom their rely on for help making health care decisions, can request an extension by calling 1-800-MEDICARE.

Keep in mind that if you have clients who are losing their retiree-health benefits from a former employer, such as the more than 25,000 retirees of bankrupt Eastman Kodak who will lose their health coverage by the end of the year, they are subject to a special enrollment period and may have more time to decide on their Medicare coverage for 2013. But if they delay making a decision beyond December 31, they may have a gap in coverage next year.

The Basics

When Americans turn 65, they get a great birthday gift from Uncle Sam: government subsidized health insurance. But like so many government programs, there are lots of moving parts. In the case of Medicare, it's Parts A, B, C and D, named for the types of services covered by the various sections of the program.

Those parts include hospitalization (Part A), doctors' visits and outpatient services (Part B), all-in-one health plan that often includes drug coverage (Part C), which some retirees select in lieu of traditional Medicare, and standalone prescription drug coverage (Part D).

Understandably, once a senior selects a Medicare plan, they are reluctant to make changes. But sometimes they should.

Time to shop

“Don't assume the current coverage is the best you can get,” said Kathryn Votava, president of Goodcare.com, a health care consulting firm that works with individuals and financial advisers to select Medicare options, plan for healthcare costs in retirement or manage care for an elder. Switching to a lower-cost Medicare option could save hundreds or even thousands of dollars per year and go a long way to stretching their retirement budget.

During a webinar this week, Dr. Votava listed five reasons why Medicare beneficiaries should continue changing their plans:

--a change in prescription drugs or dosage

--an increase in out-of-pocket costs

--poor customer service

--limited access to preferred health providers

--insurance plan no longer available

Something as simple as a change in dosage of a prescription drug could mean that the senior's current drug plan may not be the best choice for next year. Insurance companies have the right to alter their list of covered drugs, known in Medicare-parlance as their “formulary” or shift a particular drug from a free or low-cost “tier 1” category to a higher cost “tier 2” designation. So it's a good idea to review your current plan's list of covered drugs and prices and match it up to your current prescriptions.

Some healthy seniors select an all-inclusive Medicare Advantage program when they first become eligible for coverage, attracted by the low cost and access to additional services such as vision care, health club membership or prescription drug coverage. But as age-related health problems arise, they may be disappointed in the gatekeeper approach that can limit their access to preferred specialists.

Even seniors with traditional Medicare and a medigap policy may find that their doctor or specialist is no longer part of their insurance network, leading to higher out-of-network chares. That's another reason to shop around. Ask your health care provider which networks they below to and look for a medigap policy from that insurer.

Challenging changes

It is possible to switch from a Medicare Advantage plan to traditional Medicare, but it may involve some hiccups along the way, Dr. Votava warned. A senior reverting to traditional Medicare will want to purchase a supplemental Medigap insurance policy to cover deductibles and co-payments and a standalone Part D prescription drug plan, too.

That's where things can get tricky. During the initial Medicare eligibility period when someone turns 65 and up to six months after his or her birthday, a senior can qualify for any Medigap policy, regardless of health condition

But once that initial enrollment period expires, applicants may be subject to medical underwriting which could include exclusions for a pre-existing condition for three to six months. Don't let that deter you, says Dr. Votava. Once you are covered by a new Medigap insurance plan, you can contact your previous Medicare Advantage plan and ask them to send your new insurer certification of your continued coverage. In most cases, the new plan will waive the pre-existing condition exclusion, she said.

That's just one example of how complicated Medicare choices can be. Although consumers can find enormous amount of information to help them choose a health plan and drug coverage at www.medicare.gov, it can be overwhelming. It's like changing the oil in your car. Some of you can do it yourself. Others prefer to leave the dirty work to Jiffy Lube.

Look for my column in the December 3 print edition of Investment News for a list of resources to help your clients make smart Medicare choices without getting their hands dirty.

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