The Ins & Outs of Medicare Open Enrollment, Part I

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Christina Bach, MSW, LCSW, OSW-C

Christina Bach, MSW, LCSW, OSW-C

Wow, it has been a while since my last post—but never fear, I’m back again and ready to talk all about my favorite time of year, FALL, Medicare Open Enrollment!  I’ll be writing three blogs over the next three weeks highlighting three important areas for cancer patients to consider when thinking about open enrollment options.  This week I’ll focus on Medigap plans.  Next week, we will take a look at Medicare Advantage plans.  Finally in our third week, we will focus on Prescription Drug Coverage. And we will round it all up with an Open Enrollment webchat in early November where we’ll answer your questions!

If you are a Medicare recipient, or you are enrolled in a Medicare Advantage Plan it’s time to REALLY take a look at your coverage, your bills for the last year and the options available for you to make changes to your coverage during the open enrollment period.  I’m going to focus specifically on what CANCER patients need to know about making their coverage work and lowering their out of pocket expenses related to their cancer treatments.

So, just what is open enrollment?  This is a time period designated every year when Medicare recipients can learn more about various medical and prescription drug plans that are available to them AND make changes or additions to their coverage.

This year’s open enrollment is from October 15-December 7th (2011).  This is earlier then is previous years and offers seven (7) full weeks for recipients to weigh their needs and options to make an informed choice about their health insurance coverage.

It is essential to ask, what do I need to know about my cancer treatments that may impact my decisions during open enrollment?  The most important thing to remember that while having Medicare coverage is great, Medicare does not cover EVERYTHING.

You become eligible for Medicare when you turn 65 or your have been receiving social security disability for 24 months after the start of your disability.  Medicare Part A covers your inpatient hospitalization costs.

Medicare Part B covers your outpatient medical expenses, including doctor visits, medical equipment, ambulance services (if medically necessary), outpatient physical therapy, occupational therapy or speech therapy, outpatient mental health services, chiropractic care, home health care, labs and x-rays, and SOME prescription medications (such as XELODA, an oral chemotherapy drug).

Having Part B is entirely optional and does carry an extra monthly premium that is deducted from your Social Security or Disability payment.  However, if you don’t sign up for Part B when you are first eligible, you may have to pay a late enrollment penalty.  There is no open enrollment period for Medicare Part B.

I think the most important thing for cancer patients to know about Part B coverage for IV (intravenous) chemotherapy that you receive at an Infusion center is that it covered at 80%.  This means you are responsible for 20% co-pay for every infusion you receive.  There is no annual out of pocket maximum with Medicare part B.  This is where the need for Medigap coverage comes into play.

Perhaps the best way to illustrate this is with an example:

Suzy has lung cancer and is being treated monthly with chemotherapy.  She has Medicare A & B coverage only.  Suzy is responsible for 20% of the costs associated with her monthly chemotherapy as Medicare Part B only covers 80%.  This cost averages $1000 per month or $12,000 per year.  Suzy’s gap in coverage has resulted in a large out of pocket responsibility.

What is a Medigap plan?   Medigap plans supplement your Medicare Coverage.  They are offered by private companies and help close the coverage gap created by they 80/20% coverage of many part B related services.  You MUST have Medicare A and B to be eligible for a Medigap plan.  Also, you cannot be enrolled in a Medicare Advantage plan and purchase a Medigap plan.

But Suzy has cancer and is already undergoing treatment.  Do pre-existing condition clauses apply to Medigap plans?  The answer is, sometimes.

Under national laws, you may have up to a six-month waiting period for Medigap coverage of pre-existing conditions unless you are in one of the following situations:

  • You are entitled to a guaranteed-issue right to buy a Medigap because you recently lost certain types of other coverage
  • If you are replacing a Medigap policy you have had for at least six months with a new Medigap policy, you will have no pre-existing condition waiting period for those benefits covered by your old plan. However, you may have a waiting period of any new benefits in the new plan you choose.
  • You purchase a Medigap during an open enrollment period and had coverage from one of the following types of insurance for at least six months prior to purchasing the Medigap and have had this prior coverage within the last 63 days:
  1. Medicare Parts A and B*
  2. Private health insurance coverage (including Medicare private health plans)
  3. Group health plan (like an employer plan)
  4. COBRA
  5. Medicaid
  6. CHAMPUS AND TRICARE (health care programs for the uniformed military services)
  7. Federal Employees Health Benefit Program
  8. A public health plan
  9. State health benefits risk pool
  10. Indian Health Service or Tribal Organization Program
  11. A health plan under the Peace Corps Act
  12. Veterans Administration benefits

Not every Medigap plan applies pre-existing condition waiting periods.  It is best to shop around and compare plans that are available and to ask SPECIFICALLY about pre-existing condition clauses that may apply to your policy.  (http://www.medicareinteractive.org/)

How do I find out about Medigap plans available in my area?

How does a having Medigap plan save me money?

Let’s go back to our example of Suzy. Without a Medigap plan, Suzy’s annual out of pocket expenses for her IV chemotherapy is $12000.   Suzy is quoted a monthly premium for a Medigap plan of $385 dollars.  This plan will cover her 20% cap.  Her annual out of pocket expense for this plan is $4620 or a savings of $7740!!!

Oncology social workers are available in many doctor’s offices and clinics to help you sift through all of your options and the plans that may be available to you.  It is often helpful to look at your bills from the previous year as well as to talk with your physician about your possible treatment plans for the coming year.  This can help you to anticipate what your out of pocket expenses may look like for the coming year.