Medicare Open Enrollment 101

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NEW YORK (MainStreet) - Open enrollment for those with Medicare is currently underway until Dec. 31 and this year, more seniors than usual will have some choices to make.

Hundreds of thousands of people will have to choose new health care coverage during Medicare’s annual enrollment period because a number of current plans are being eliminated under health care reform regulations, in an attempt to alleviate the confusion caused by too many existing alternatives.

Additionally, Americans who are new to Medicare and those who have not re-evaluated their Medicare coverage recently may want to take a closer look at their options for 2011.

“Annual enrollment is the one time of year Medicare beneficiaries have the opportunity to evaluate all their options and choose the best coverage for their needs,” said Adrienne Muralidharan, senior Medicare specialist for Allsup Medicare Advisor, a Medicare plan selection service that helps people understand and choose appropriate Medicare coverage.

Americans qualify for the federal health plan when they turn 65 or become eligible due to a disability. Overall, about 47 million people rely on Medicare and most of them are seniors. According to Allsup, only about 8 million people under 65 receive it.

So what do you need to know if you’re one of the many who needs to make choices this year?

The A-B-Cs


Generally, those who qualify for Medicare coverage receive what is known as Medicare A, which covers hospital costs, and Medicare B, which essentially covers doctors’ visits.

According to Allsup, the average monthly premium for first-time enrollees opting for traditional Medicare is $115.40. Most existing beneficiaries will continue to pay a monthly Part B premium of $96.40 or $110.50 (if initially enrolled in 2010). Any beneficiaries earning more than $85,000 as single filers or $170,000 as joint filers will pay more, from $161.50 to $369.10 for very high-income earners.

Enrolled seniors then have to choose a prescription plan, referred to as Medicare D, to cover the cost of medications. According to Muralidharan, there are approximately 1,100 different prescription plans available nationwide and, on average, 33 plans per Medicare recipient in a given area.

What complicates matters further is that seniors can also opt for Medicare C, which refers to Medicare Advantage Plans, or health care policies offered by private companies that are ultimately reimbursed by the federal government. According to Muralidharan, there are approximately 2,000 Medicare Advantage plans available nationwide. Since availability is subject to where you live, each Medicare recipient has about 24 Medicare Advantage plans to choose from on average.

These plans generally incorporate both hospital and standard medical coverage as substitute for Medicare A and B, though some also collectively cover the cost of prescription drugs as well.  Seniors who opt into an Advantage plan that doesn’t include a prescription plan have to also select one of those as well.

This year, Medicare Advantage plan premiums are expected to decline 1% based on new data from the Centers for Medicare and Medicaid Services.  In addition, Muralidharan says, all Medicare Advantage plans available for 2011 are required to limit out-of-pocket expenses to $6,700. More than one-half of plans are capping out-of-pocket costs at $3,400, providing beneficiaries with added protection against unexpected costs.

Fortunately for those who think their current plan doesn’t measure up, all of these options can be adjusted during the open enrollment period. Unfortunately, the choices don’t necessarily get easier with experience and each is specific to a person’s particular needs.  

“Medicare options can be overwhelming, which is why so many people stay in their existing plans,” Muralidharan said. “But not doing anything is a choice—and it may not be the best choice because individual health care needs and plan costs change.”

One thing to keep in mind, additionally, is that those who do not enroll in another plan by Dec. 31 will revert to traditional Medicare and become responsible for all costs not covered in that plan, including prescription drugs.

When should you make a change?


Seniors whose plans have been eliminated aren’t the only ones who need to review their open enrollment forms carefully. For example, seniors who originally opted for a prescription plan that covers minimal medications may want to opt for a different plan if their health has worsened during the past year. Seniors may also want to change the coverage they originally opted for when:

  • Their current provider’s situation has changed (for example, your preferred hospital or physician leaves the plan).
  • The terms of coverage have changed (for instance when certain drugs, procedures or conditions are no longer covered).
  • Their plan premiums have increased.
  • They have moved to a new location.


Those who find themselves in these situations need to make sure they carefully review their current policies carefully. They should also carefully review the Evidence of Coverage (EOC) and Annual Notice of Change (ANOC) that existing plans send out each year.

According to Medicare.gov, the official government site on Medicare, the EOC gives you details about what the plan covers, how much you pay and more. The ANOC includes any changes in coverage, costs or service areas that will go into effect in January. If you don't get either of these forms, you should contact your plan directly. Medicare.gov also has a resource locator that can help you get information on the other plans available in your area.  

Once you know your options, you should then need to be ready to do some cost comparisons.

“Add up your total costs for 2010, including premiums, co-pays and deductibles,” Muralidharan says. “If you paid more than you expected or your treatment wasn’t covered, you should explore other plans that may better meet your needs.”

Those who need help wading through all of the alternatives shouldn’t be hesistant to seek it out. You can visit Medicare.gov for more information on open enrollment of policies in general.  You can also visit Allsup’s website for answers to more commonly asked Medicare questions.

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