What is open enrollment and why is it important?
By Margie Ware
February and March are “open enrollment” periods for supplemental Medicare insurance plans. This year it is especially important that individuals find out if they need to make any changes to their present policies.
Why is there such a thing as “open enrollment?” Why can’t you simply sign up for insurance any time you want to? If all of us waited until we “needed” insurance to sign up, the costs would be unreasonable, because the only insurance policy holders would be people currently accessing the insurance. The concept of “insurance,” i.e. guarding against unforeseen circumstances, depends on a large group of people who have a relatively equal chance of accessing the benefits. By limiting new memberships to one period a year, the insurance company can help enroll members who may not put in immediate claims, thereby creating a pool of users who are paying premiums to support those people who are making current claims. You don’t get something for nothing.
There are a number of categories of individuals who may want to review their supplemental Medicare insurance this month to decide whether they want to make a change:
- Do you have “gold” coverage, especially with a company like Bankers Life, Oxford, etc. that no longer does business in Massachusetts? If so, you may want to terminate this policy as of May 31st and join a “Supplement One” plan with either Blue Cross or United Health. These plans, which cost $150 per month, cover every gap in Medicare except for prescription drugs. But, in combination with one of the new Medicare D plans, they provide the same coverage as was given with “gold” coverage, and usually at a lower price.
- Do you now have Supplement One coverage, but find the $150 premium too steep financially? If any of the following three things apply to your life simultaneously, you may want to consider “dropping down” to Core Insurance:
- No longer traveling outside the U.S,
- Have an annual income below $18-20,000, thereby qualifying you for the uncompensated care pool in the event of a hospitalization (where the first day is a “deductible” under Medicare,
- Have liquid assets below $10-15,000 and so are not concerned about co-pays in skilled nursing facilities which might exceed the 20 day period covered fully by Medicare.
- If you currently have no supplemental insurance, you may want to consider signing up for a Core policy. This will cover the 20% of
your doctor’s fees and lab tests not covered by Medicare and prevents paperwork, billing, collection notices etc. Physicians’ offices are becoming increasingly assertive about collecting outstanding patient balances, and Core insurance can prevent unnecessary anxiety, assuming that the individual can afford the monthly premium.
One exception to the enrollment periods is AARP/United Health Care, which recently announced they will have an open enrollment through all of 2006, beginning immediately. Anyone interested in obtaining supplemental Medigap insurance effective February 1, 2006 or the first of any month thereafter should contact SHINE.
Of course, we can’t write a SHINE article without referring to the “D” word. Medicare Part D has its own open enrollment rules. There is a special open enrollment that will end May 15, 2006. After this, individuals will have one period a year, November 15 - December 31st, to initially enroll (assuming they have passed the period of their own initial eligibility) or to change coverage. It is possible that some supplemental programs will have special open enrollments during that period as they did this past year, so that consumers can make decisions in conjunction with their prescription drug coverage choices. We will keep you informed about this situation this coming fall.
As always, the best policy is to meet every year or two with a SHINE counselor to review your coverage and decide whether you are over- or underinsured. Elder Services and your local Council on Aging can help you answer questions.
Margie Ware is the Regional SHINE Coordinator at Elder Services and the
Regional Family Caregiver Coordinator for Western Massachusetts.
