The Medicare Rights Center a national non-profit consumer advocacy organization, fields thousands of questions as it assists older adults to make sense of the complexity of Medicare.
The Center publishes its Medicare Trends and Recommendations report each year; the work is a highlights compilation of the roughly 15,000 helpline questions and 3 million online queries fielded by staff and volunteers. Their Medicare interactive web pages garner millions of views per year. So, if you have questions about Medicare believe me, you’re not alone!
Three main areas of concern provide crucial insight for those who are new to Medicare enrollment or face ongoing healthcare cost challenges.
- Complex enrollment periods are a mess to navigate.
There’s no rhyme or reason to Medicare enrollment – the structure of initial enrollment, special enrollment, general enrollment periods date back to the creation of Medicare in 1965. Perhaps it made sense in the beginning. Today, many recipients experience gaps in healthcare coverage or are subject to permanent penalties for late enrollment due to confusion and lack of a formal notification process.
When dramatic U.S. workplace and healthcare changes are considered, 1965 standards may as well be 1865. The Labor Force Participation Rate for those 65 & older has increased dramatically since 2000 which also means more workers are covered longer by employer-based healthcare plans. It’s also apparent two devastating bear markets coupled with prolonged wage stagnation have fueled the trend to retire later or return to work.
Better education about Social Security is helping a growing number of future recipients defer benefits. In addition, full retirement age for Social Security purposes is 66 for those born between 1943 and 1954. In other words, these changes mean prospective recipients must juggle multiple complex Medicare enrollment timelines to actively enroll. Those already receiving Social Security benefits before 65 are automatically enrolled in Medicare Part A and B.
The public’s understanding of how and when to enroll in the Medicare alphabet soup of benefits including Prescription Part D is amiss.
The bipartisan Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act is designed to bring the Medicare enrollment process into this century (finally).
Through the BENES Act, the Federal Government would initiate two notices to individuals who are near to eligibility for Medicare. First notice would arrive six months before an individual’s initial enrollment period; another one month before the IEP.
Most important, the Act looks to fix the fragmented Part B enrollment periods by eliminating coverage gaps between initial and general enrollment periods. For example, initial enrollment period begins the first day of the third month before your 65th birthday and extends for 7 months. Coverage begins the first day of your birthday month; if you sign up after your birthday month yet still within the initial enrollment period, then coverage begins on the first of the month following enrollment.
If you miss open enrollment, your next window of opportunity opens during general enrollment which starts January 1 through March 31st of every year, with coverage beginning July 1.
Let’s use my birth day and month for illustration purposes. Also, assume I don’t have qualified healthcare coverage with an employer. Let’s say I turned 65 last March and in August I realize I missed my initial enrollment window. Tough luck for me. I’m expeditious to get on track. During general enrollment in January 2020, I get it done. On July 1, 2020, my Medicare coverage begins. In September, I decide to retire, or most likely, Lance gets tired of my jokes and has the locks changed on my office door.
Unless I purchase coverage in the open marketplace, I am financially exposed to a catastrophic healthcare event until July 1, 2020. Thankfully, I dodged the Part B penalty bullet because fewer than 12 months had elapsed. Reminder: The penalty increases permanently the Part B premium by 10% for each twelve-month period missed. In 2017, it’s estimated that 701,000 people were paying late enrollment penalties for failing to sign up for Medicare Part B during the appropriate enrollment period. The average penalty was an onerous 30% increase to monthly premiums.
The BENES Act looks to eliminate gaps in healthcare coverage such as my example above.
In addition, BENES seeks to align general enrollment with existing enrollment periods for Medicare Advantage and Part D prescription drug plans. So, when you’re bombarded by media ads and mailers from October 15 through December 7 every year, you’ll also know that’s time to enroll in original Medicare Part A & B if you missed initial enrollment.
Currently, the government is unforgiving when it comes to waiving permanent Part B penalties. BENES creates a path for consumer-friendly relief.
According to Govtrack, this bill is in the first stage of the legislative process. It was introduced into Congress on May 2, 2019. I passionately hope during such a dysfunctional time for Congress, both sides can see the overwhelmingly positive impact this bill would have on our nation’s older adults.
- Yes, you can appeal Medicare Advantage denials of care. Don’t give up.
Medicare Advantage or all-inclusive HMO-type plans are growing en masse which also means more confusion over selecting a plan, changing a plan, how coverage is approved per procedure, pre-procedure; how coverage may differ or not apply depending on a doctor or hospital and the astounding confusion over why certain life-saving operations and treatments are denied even though MA-approved doctors require them. Per Medicare Rights based on a report from the Office of Inspector General, only 1% of Medicare Advantage enrollees appeal denied claims. Yet for those who do appeal, the report found that plans reverse 75% of their own decisions.
Our advisors prefer Original Medicare coupled with Medigap PPO and Part D supplemental plans as they resemble plans most of us are used to at our employers; procedures covered are comprehensive.
- The costs of prescription drugs remain a major concern.
The cost of drugs in some cases, is a decision between life or death.
Keep in mind, half of all Medicare recipients live on incomes below $26,200. Those with adequate Prescription D coverage contact Medicare Rights seeking assistance with drug costs Part D won’t cover or cover in full. Obviously, there must be greater transparency in pricing and the ability for Medicare to negotiate.
The Medicare Rights Center is a much-needed protection and advocacy program with many commonsense ideas on how to improve the program. They are also a frontline, in the trenches partner for Medicare enrollees and caregivers who are desperate for help to navigate a complicated system.
Check out their content at www.medicarerights.org.
Richard Rosso, MS, CFP, CIMA is the Head of Financial Planning for RIA Advisors. He is also a contributing editor to the “Real Investment Advice” website and published author of “Random Thoughts Of A Money Muse.” Follow Richard on Twitter.