Sometimes beneficiaries who are new to Medicare are surprised to learn that Medicare isn’t free and that it doesn’t cover everything either. There are deductibles and copays and coinsurance that beneficiaries must pay as they use medical services.
How to cover these gaps is one of the major decisions that people new to Medicare must make. There are 2 primary ways to do this. Beneficiaries can choose from a traditional Medicare supplement or a Medicare Advantage plan, which is a form of a managed care plan that uses networks to deliver healthcare services to members.
In recent years, enrollment into Medicare Advantage plans has been on the rise, with approximately one-third of all beneficiaries being enrolled in such a plan. Health maintenance organization plans, which typically have the lowest premiums, capture the lion’s share of enrollments.
New changes to Medicare Advantage plans in 2019 are likely to make these plans even more attractive to retirees living on fixed income, so we can likely expect continued growth in enrollment for these plans. Let’s look at some of the new features surrounding these plans.CMS announced last April that they will now allow Medicare Advantage plans to add long-term care benefits to the supplemental benefits in these plans. While the plans can’t directly cover fees for an assisted living or nursing home stay, what they can do is provide some services that may allow individuals to remain living independently in their own homes for a longer period of time.
These services will primarily impact individuals with chronic illnesses who need assistance with activities of daily living such as bathing, dressing, and toileting and even some activities that are more custodial in nature, such as cooking or cleaning.
Plans can offer in-home support services to these individuals with serious health conditions or disabilities. They can also offer benefits for home modifications that will make it easier for members to navigate their own homes, such as bathroom grab-bars or wheelchair ramps. There will even be an opportunity to include transportation to and from medical appointments and in-home meal delivery.
Added benefits that will be welcome to full-time caregivers for Medicare beneficiaries in these plans are short-term respite care and adult day care services.
While less than 300 plans incorporated these new benefits into their designs for 2019, it is expected that many more will begin offering them in 2020. This is likely to increase the enrollment into Medicare Advantage plans even more. Currently, Medicare has not yet approved these kinds of benefits for Original Medicare itself.Another great change for Medicare Advantage is the new Open Enrollment Period (OEP) that will run for 3 months at the start of each calendar year. Many beneficiaries who have been on Medigap plans for years are intrigued by Medicare Advantage plans but also reluctant to leap from the policy they are familiar with to one that works quite differently.
Now beneficiaries who want to give Advantage plans a try can do so without necessarily being so locked in. Enrollees can join a Medicare Advantage plan during the fall Annual Election Period that runs October 15 to December 7. Their new plan will begin on January 1. During that next 90 days, if they dislike their plan for any reason, they can disenroll and return to Original Medicare and a Part D drug plan. They could also choose to change from their current Medicare Advantage plan over to another one.
This opportunity to sort of “try before you buy” will likely attract people who normally be more hesitant to try Medicare Advantage. They can get a feel for how the plan works and what kinds of copays they may encounter as they go along while still having the opportunity to leave that plan if they find that it isn’t everything that they had hoped it would be.
One caveat to remember is that though you can return to Original Medicare, you may or may not be able to re-enroll in your Medigap plan, so if you decide to leave your new Medicare Advantage plan during the OEP, check with your former Medigap carrier first to see if you have a guaranteed issue right to re-enroll into that plan before you disenroll from the Medicare Advantage plan.With potential new benefits like those we’ve discussed plus the opportunity to test the waters in a Medicare Advantage plan, it’s likely we’ll see the trend toward Medicare Advantage enrollments continue. Let’s not forget either that Medicare Part B premiums and Medicare supplement premiums both increase over time to keep up with healthcare inflation. Eventually, these costs may drive more and more people to consider Medicare Advantage plans that have considerably lower premiums than Medicare supplements.
What’s most important is that Medicare gives beneficiaries some choices for how to access their coverage and how to insure themselves for the gaps in Medicare.