With the approach of November 15, newspapers and magazines are packed full of confusing advertisements urging seniors to look at new Medigap (supplemental) insurance policies and Medicare Advantage plans. Companies are urging seniors to jump from one type of plan to another.  The advertisements will only add to the bewildering array of options available to seniors.

The purpose of this brief column is to lay out a summary of important (and, alas, complex) rules relating to when someone can purchase a Medigap policy or change to another Medigap policy. And, of course, any purchase or swap has potential financial ramifications.

After that brief discussion, we will take a look at switching in to and out of Medicare Advantage plans.  For more on Medicare Advantage plans, see my two part article written for the Coastal Senior (a Savannah publication) by clicking HERE (for Part 1) and HERE (for Part 2). As you will see, I'm not particularly enamored with Medicare Advantage plans.

Medicare Generally

If you are really new to Medicare, it may be helpful for you to look at my article "Medicare 101". Go there by clicking HERE. Remember, I never promised this would be easy!

Medigap Policies

For more background on Medigap plans, you may wish to read my article on Medigap policies posted on my website by clicking HERE.  In any event, traditional Medicare does not pay for everything. As with any other health insurance, you are expected to meet deductibles and co-pays. They quickly add up. That's where Medicare supplemental plans (or "Medigap" plans) come in. If you plan on using traditional Medicare (as opposed to enrolling in a Medicare Advantage plan) do not leave home without a Medigap policy. You can take a look at the 2008 Medicare deductibles and co-pays by clicking HERE.

There are twelve standardized plan types (labeled Plans A-L). Each plan provides the same package of services regardless of the company. It makes shopping easier. It is important to note that you must select a Plan C or higher in order to insure that your Medigap policy will pay expensive nursing home co-pay amounts ($128 per day beginning in 2008).

Medigap policies are extremely important, but it is also extremely important to select and enroll in a Medigap policy during a "guaranteed enrollment period".  Attempting to enroll in a Medigap policy at other times (perhaps after several years in Medicare you decide you should have done it in the first place) can be expensive . . . even if you locate a Medigap plan willing to enroll you.

So what is a "guaranteed enrollment period"? There are certain times when individuals are guaranteed the issuance of a Medigap policy at prices that have been reviewed and approved in each state.  You are guaranteed such admission if:

·         You first become eligible for Medicare Part B.

·         Upon first becoming eligible for Medicare Part B, you enrolled in a Medicare Advantage plan and you disenrolled from that plan within the first twelve months.

·         If you dropped a Medigap policy for a Medicare Advantage plan and you disenrolled within twelve months, you are also guaranteed the same Medigap policy that you first dropped if this is the first time you have dropped a Medigap policy for a Medicare Advantage plan.  If your old Medigap policy is no longer available in your area, you are guaranteed the purchase of either an A, B, C or F policy.

·         If you move out of the service area of your Medigap policy, you are guaranteed admission in to a new Medigap policy of types A, B, C or F.

Medicare Advantage Plans

Medicare Advantage plans are alternatives to traditional Medicare, and are meant to give consumers a broad array of service packages and pricing. Traditional Medicare is maintained by the federal government and is standardized throughout the country. Medicare Advantage plans are offered by approved insurance companies.

It is in this area that confusion will really begin.  Because Medicare Advantage plans are offered by private companies (with big advertising and marketing budgets) you will see a lot of advertising "noise" on television, radio and in print media.

There are a number of "election periods" relevant to Medicare Advantage plans.

First there is an initial election period that consists of the three months immediately preceding your initial eligibility for Part A and enrollment in Part B of Medicare.  If you do not elect in during this period, you will be automatically enrolled in traditional Medicare.

Thereafter there is an annual "coordinated election period" that runs from November 15 through December 31.  During this period you may enroll in a Medicare Advantage plan, change to a different Medicare Advantage plan, or return to traditional Medicare.  Please see the rules I discussed above to see if you qualify for a guaranteed Medigap policy.  You very well may not, which means you will return to traditional Medicare with out any "gap" protection.

Not to be confused with the "coordinated election period" that runs from November 15 through December 31, there is an open enrollment/disenrollment period that covers the first three months of the calendar year.  Under this period an individual who has not otherwise made a contradictory election under the coordinated election period may opt in to a Medicare Advantage plan.

Finally, there is a special election period during which an individual may transfer from a Medicare Advantage plan back to traditional Medicare or from a Medicare Advantage plan to another Medicare Advantage plan. A special election period applies in a number of "serious" events: plan termination in the geographical area, a move out of the service area by an enrollee, a substantial violation of a material provision of the plan or there has been a material representation by marketing representatives.  Under this provision an enrollee must convince the Centers for Medicare and Medicaid Services (CMS) of the material misrepresentation.  I am told that it is not the easiest task in the world.

Bob Mason