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Managing Medicare's Costs

Even though you missed Medicare’s open enrollment, you may still be able to change plans

What if you didn’t get around to re-evaluating your health insurance during Medicare’s open enrollment? Your intentions were good, but before you knew it November and the first week of December sped by. And between buying gifts, getting the house ready for the in-laws (who this year decided to stay for five days), and reviewing the youtube video about how to carve a turkey, you forgot about open enrollment until it was too late.

So are you stuck with your current health insurance for another year? Maybe not. It’s true that your options are limited, but Medicare has 30 or so special enrollment periods, or SEP’s, that enable you to switch plans in certain situations. Among the reasons you might want to use an SEP are to change to a less expensive plan or to escape a narrow network that does not include one or more of your doctors.

The most valuable special enrollment periods are those that come with a guaranteed issue right to purchase a Medigap policy without having to answer questions about your health. That means you do not have to worry about paying higher premiums because of a pre-existing condition. An example of an SEP that includes a guaranteed issue right is the termination of your employer retiree coverage, in which case you cannot be asked questions about your health when you purchase a Medigap policy. Also, you have a guaranteed issue right if you move to another area that is outside the service territory of your current Advantage plan or Part D plan. Here’s Medicare’s list of seven SEP’s that include guaranteed issue rights.

Most SEP’s, however, do not include a guaranteed issue right to buy a Medigap policy. When that’s the case, you may have to disclose any pre-existing conditions you have before you know how much your Medigap premium will be. That’s unless you live in one of the four states (Connecticut, Massachusetts, New York, and Vermont) that have full guaranteed issue rights for Medigap policies. In addition, occasionally there are guaranteed issue rights that have been enacted by state legislatures and that apply only to those states.

Guaranteed issue rights are not needed for Advantage plans since they are required to admit any Medicare beneficiary. The sole exception is that an Advantage plan may deny enrollment to people with end-stage renal disease (ESRD). Even that exception, however, is not universal because some Advantage Special Needs Plans admit ESRD patients. Here are brief descriptions of some SEP’s that you may be able to use.

Ways to switch from a Medicare Advantage plan to a Medigap policy

Regardless of the time of year, there are two ways you may be able to disenroll from an Advantage plan and have a guaranteed issue right to buy a Medigap policy: 1) if you enrolled in an Advantage plan when you turned 65 and have been in the plan for less than a year, or 2) if you dropped a Medigap policy in order to switch to an Advantage plan for the first time and it’s been less than a year since you did that.

You can also switch from an Advantage plan to a Medigap policy between January 1 and February 14, a six-week span called the Medicare Advantage Disenrollment Period. But except in the four states mentioned above, you may have to answer questions about your health before you get a premium quote. And if you do switch to a Medigap policy, you will also need to enroll in a Part D stand-alone drug plan. You cannot, though, use the MADP to switch from one Advantage plan to another — unless it is a five-star plan (see below). Nor does this SEP allow you to drop your Medigap policy and switch to an Advantage plan.

Another way to get out of Advantage plan in mid-year is if your plan makes a significant change in its provider network that will affect you. It is up to Medicare to decide whether a network change is significant, which it does on a case-by-case basis. If Medicare decides in your favor you have a three-month special enrollment period to switch to another Advantage plan or buy a Medigap policy, but without a guaranteed issue right.

Ways you may be able to switch from one Medicare Advantage plan to another

Aside from losing your employer coverage or moving to a different area, there are very few ways to change from your current Advantage plan to a different one. One is that you can switch to a five-star Medicare Advantage plan at any time, but not more than once a year. Before making a change, however, you should evaluate the five-star plan to make sure it meets your needs. Even though a five-star plan has excellent quality, it might have substantially higher costs for your prescription drugs or might not have one or more of your doctors in its network.

Unfortunately, the five-star SEP is of limited value because only 15 Advantage plan contracts have been awarded five-star status for 2016, and those plans are available in only 14 states. Moreover, five of the plans are sponsored by Kaiser Permanente, which employs its own physicians. Therefore if you switch to a Kaiser Advantage plan you will get a completely new set of doctors. That said, if you’re unhappy with your coverage you might want to see if there are any five-star Advantage plans in your area, which you can do by using the Medicare Plan Finder. Medicare denotes each five-star plan with a gold star.

Lowering the costs of your Medigap policy

If you already have a Medigap policy, you can change Medigap plans at any time of year. You can, for instance, decide to switch from the pricey Plan F to the less comprehensive Plan L, reducing your premiums by about $800 a year. And so long as you are switching to a less comprehensive plan sold by the same company that sold you Plan F, you will not have to answer health questions. That’s because when you go to a lower level plan you are increasing your risk, although slightly, and the insurance company is reducing its risk.

What if you want to keep Plan F but switch to a different insurance company that has lower premiums? Again, you can change companies at any time of year, but depending on the state you live in, you may have to answer health questions before you know how much your premium will be. In addition to the four states mentioned earlier that have year-round guaranteed issue rights, California, Maine, Missouri, Oregon, and the state of Washington each have an “enrollment window” during the year when you can change insurance companies without answering health questions.

The timing of the enrollment window varies by state – in California and Oregon, for instance, it’s the 30-day period following your birthday, while in Missouri it’s a 60-day period that begins 30 days before your policy anniversary date and that ends 30 days after your policy anniversary date. And in the state of Washington unless you happen to have Medigap Plan A, you can switch from one plan to another at any time of year without answering health questions.

Another way to trim your costs might be to drop your Medigap policy and switch to a five-star Advantage plan if there’s one in your area. Again, though, you want to make sure the five-star plan’s costs for the drugs you take are reasonable and that your doctors are in the plan’s network.

Finding better drug coverage

If you are in a stand-alone Part D plan, during the year you can change to a five-star Part D plan. The catch is that there’s only one five-star Part D plan in the country, in Wisconsin. Another option is to see if there’s a five-star Advantage plan that includes drug coverage and that has low costs for the drugs you take.

There are numerous other SEP’s allow you to switch plans without waiting for annual open enrollment, and if you have had a change in your living status or the type of coverage you are eligible for, you may be able to use a particular SEP. Medicare has a booklet that lists 24 special enrollment periods for Parts C and D. Meanwhile, it’s not too early to mark your calendar for the next open enrollment period, which begins October 15, 2016. ◊◊

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