A visit to the mailbox is an unrewarding chore for many of us, and retirees are no exception. Slogging through a mountain of credit card applications, donation requests, assorted fliers, catalogs and magazine offers are enough to make answering a robocall from a political super PAC seem like an attractive diversion. The month of September, however, offers Medicare beneficiaries a worthwhile excuse to cull the contents of their mailbox in search of some important Medicare informational mailings. Mailings that just may save you some money! Medicare beneficiaries should be on the lookout for the following consumer mailings from the Centers for Medicare & Medicaid Services (CMS) and their insurance plans.
Annual Notice of Change
The Annual Notice of Change (ANOC) is a booklet that is provided to individuals that are enrolled in a Medicare Advantage or Medicare Part D prescription drug plan and explains changes to the plan for the coming year. These may include updates to the plan’s service area, premiums, deductibles, copayments or coinsurance, as well as changes to the plan’s prescription drug coverage and formulary. This information is provided by the insurance plan and should be received by the beneficiary by September 30th.
Evidence of coverage (EOC)
This document is generally sent with the ANOC and describes in considerable detail the health care benefits provided by the plan. It documents what the plan covers, how it works, how to access plan benefits or file a complaint or appeal, and defines the beneficiary’s rights and responsibilities under the plan. With the heft of a phone book, it’s difficult to miss.
“Medicare and You” handbook
Mailed to all Medicare beneficiaries in late September, the handbook is a comprehensive guide to all aspects of Medicare coverage. In addition to information pertaining to benefits, it lists covered services and available health and drug plans. An excellent reference, the handbook is also available online at Medicare.gov.
Notice of Creditable Coverage
Employers who sponsor a group health plan that offers prescription drug coverage, regardless of the plan’s size, and including public sector, government and not-for-profit organizations, must notify their Medicare-eligible beneficiaries by October 15th whether their plan’s prescription drug coverage is creditable. A plan with creditable prescription drug coverage is one that provides a benefit at least as good as that provided by Medicare. Medicare-eligible beneficiaries with creditable drug coverage can delay enrollment in Medicare Part D without incurring a late enrollment penalty.
What to do?
Medicare beneficiaries that are enrolled in a Medicare Advantage (MA) plan should review the plan’s service area and participating providers list each year to ensure that it continues to meet their needs. Make sure to verify that your favorite medical facilities and service providers accept the plan. If you’ve moved, had a material change in health, or a favorite provider is no longer participating in the plan it may be wise to look for a new plan. For those that wish to change from a Medicare Advantage plan to Original Medicare, the 2019 Medicare Advantage Diserollment period (January 1- February 14) affords beneficiaries with the ability to switch back to Original Medicare and, for the first time, to sign up for a stand-alone Medicare Part D prescription drug plan.
Medicare Advantage and Medicare Part D plan beneficiaries should review their plan’s prescription drug coverage annually. Medicare Advantage plans generally, but not always, include drug coverage, while Medicare Part D plans are most often utilized by those that receive their medical coverage through Original Medicare. It is important to review the plan’s prescription drug formulary each year to determine whether your medications are covered under the plan, and which pricing tier they are assigned. A relatively painless way to check your plan’s prescription drug formulary, and identify a plan that best suits your needs, is to utilize the Medicare Plan Finder tool.
A word of caution about Medicare Supplement (Medigap) Plans
Medicare Supplement (Medigap) plans are offered for sale throughout the year, though attempting to purchase a plan outside of your Medigap Open Enrollment Period may subject you to medical underwriting. Guaranteed-issue rights are afforded to beneficiaries that sign up during their open enrollment period, which lasts for six months and begins on the first day of the month in which they are age 65 or older and enrolled in Medicare Part B. During this period, insurers cannot charge a higher premium or deny coverage because of a preexisting condition (although they may delay coverage for up to six months).
Although certain states, including NY, CT, MA and ME provide residents with guaranteed issue rights that are either continuous or extended on an annual basis, most states afford little or no protection. Medicare beneficiaries should exercise caution when attempting to purchase a plan outside of their Medigap Open Enrollment Period. For help understanding the protections afforded in your state, contact your State Health Insurance Program counselor for assistance.
Medicare Open Enrollment is a once a year opportunity to review your health insurance coverage and take control of your health care spending for the coming year. Although changes to existing coverage are not always warranted, far too many beneficiaries fail to take the opportunity to review and update their plans. Just this once, a trip to the mailbox may actually save you money. And isn’t that worth slogging through a pile of junk mail?
John Male, CFP®, RICP®
The Gassman Financial Group
The Retirement Maven™
9 East 40th Street
New York, NY 10016