When people asked why I stayed in a boring job, I'd say, "To postpone dealing with Medicare." I'd read about the frustrating decisions seniors face regarding Medigap and Part D. So when I finally left my job in February 2006, I quickly signed up for COBRA coverage to stay on my employer's health plan. I figured I'd stick with the devil I knew.
That was a mistake. I could have saved a lot of money and grief if I'd signed up for Medicare sooner. Here are some tips and insights that will help you take advantage of Medicare with minimal hassle.
- Contact your SHIP agency even before signing up for COBRA. SHIP (State Health Insurance Assistance Program) counselors are volunteers who help consumers to understand Medicare. The programs are sponsored by state elder affairs departments with Medicare support. When I called SHINE, Massachusetts' version of SHIP, I learned two important facts: (1) I could get coverage better than my COBRA coverage for half the cost (he recommended specific plans), and (2) I had to move fast to make the Medicare deadline for enrolling in Part B.
- Part A is free; you pay for Part B. Everyone gets Medicare Part A, for hospitalization, upon turning 65. You can pay a monthly premium ($93.50 for 2007, with additional charges if you earn over $80,000 a year) to get Part B, covering outpatient treatment by medical providers.
Select a Part C Medicare Advantage or Medigap plan by price. Since both parts have substantial deductibles and co-pays, Medicare authorizes private companies to offer supplemental coverage via Part C Medicare Advantage plans -- essentially HMOs or PPOs that incorporate Medicare and supplementary benefits -- and private, licensed "Medigap" plans. Many companies offer many levels of Medigap plans, but the plans are identical within each level -- A through L -- because they're specified by Medicare. So you can pick one based on price. Some Medicare Advantage plans also cover drugs.
- Go online to pick a Part D plan. Again, SHIP counselors are a great resource for information about Medicare Part D plans, which have caused great confusion. These plans come in three levels; again, you can pick based on price within each level.
One counselor showed me the user-friendly plan finder on the Medicare Web site and pointed out things to look for. The Medicare plan finder lets you list your prescriptions and calculates what the combination of premiums, copays, and deductibles will cost you over a year for each plan. Although I had a lot of prescriptions, I didn't come near the dreaded "donut hole" which means you have to pay $3,600 out of pocket after your benefits have reached $2,250. If your drug costs are high, you might want to purchase a plan that covers generics during the donut-hole period. Should you discover that you didn't make the most cost-effective choice, then you can switch the following year. - Ask the insurers for information. Contact the insurers you like for Medicare Advantage, Medigap, and Part D plans. They're quick to answer questions and send literature. They want your business. It's OK to choose Insurer A for Medigap and Insurer B for Part D.
- Watch the deadlines on signing for Medicare B. If you don't start Medicare B at age 65, then when you do apply, your employer has to sign a form saying that you've been covered up until that point by another plan. And you must sign up for Medicare B within eight months of leaving your job (COBRA doesn't count). Otherwise, you have to wait for open enrollment and then pay 10 percent extra per month for life -- a punishment for not having contributed to Medicare's cash flow. Depending on which part of the Medicare site you consult, the eight months start either the month in which you leave your job or the month after. In addition, if you want to avoid penalties under Medicare D, your employer has to certify that you had "creditable coverage" -- drug coverage as good as Medicare D.
- Leave plenty of time for the paperwork. Avoid open enrollment periods (January 1 through the end of March for Medicare B; November 15 through the end of December for Medicare D) unless they fit your timetable. Insurers get confused. Also, SHIP counselors are more accessible between April and August. I had to wait three weeks for an appointment in October. Allow plenty of time for your visits to Social Security offices; you have to take a number and wait at each visit, even if you only want a form.
- Request any necessary paperwork from your company early in the month. Don't make the mistake I did. You need Medicare B to get a Medigap policy, so I signed up (and paid) for Medicare B and the Medigap policy I chose a month before relinquishing COBRA. I wanted to make sure that both of these new plans were in place first, and I thought that buying them from the company that handled my COBRA would ensure that.
- Wrong again. First, the creditable coverage certificate I requested on November 2 didn't come until November 17. A Medigap contact had agreed to coordinate the process, so I quickly sent him both applications with detailed directions. He processed the Medigap application and mailed the other one to the Medicare D office halfway across the country. They did not receive it until December 8. I had to make about a dozen calls to five toll-free numbers in four call centers to convince the Medicare D folks that the policy effective date should be December 1 -- not January 1.
- Buy a speakerphone. Whatever plans you choose, you'll be doing a lot of calling, and you'll be on hold a lot. If you have your hands free, you can do other things while you're waiting.
- Take full names and direct phone numbers. You need only go to a Social Security office once -- to sign up for Medicare B. Most of the time you can get the help you need by telephone, at 1-800-MEDICARE. The people are very conscientious, but if you call twice you may get two different answers. Ken Levy, Metrowest regional director of SHINE, advises, "Get names and confirmation numbers if you get advice on the phone. If they give you the wrong information, that can get you out of penalties." The Medicare site is full of useful Frequently Asked Questions (FAQ's) about everything except how to enroll; that's on the Social Security site.
- Stay cool. If someone at the Social Security office says that your membership will take effect on the day you requested, even though that day is long gone, don't worry. They have to accept you. Remember that Medigap policy for which the paperwork arrived late? I had a doctor's appointment on December 1, and no one cared that my Medigap card hadn't arrived yet. After the appointment, I managed to extract my Medigap and Part D numbers after several calls to the call centers (email and fax are not in their vocabulary).
Levy adds that sometimes the application process requires an extra measure of patience, "If you're told you don't qualify for something, apply anyway. If you don't apply, you can't appeal."
Group: Insure Your Future
