2012 Medicare choices come early: How not to overpay

September 27, 2011

Last year, Henry D’Aloisio needed to adjust his Medicare coverage to pay for doctor’s visits. He thought the changes would be simple, and that decades of administrative experience would have prepared him adequately for the paperwork and small print.

But it was much more time consuming and complex than he had been expecting — “the most daunting” task he’s faced in 50 years, he says.

Soon, many other Medicare beneficiaries will face similar challenges. The annual open enrollment period, during which people over 65 can sign up for Medicare or change details about their plans, begins on Oct. 15 and ends on Dec. 7. That’s roughly a month earlier than it’s been in previous years.

In D’Aloisio’s case, the 68-year-old retired teacher and administrator from Cranston, Rhode Island, had enrolled in Medicare Part A — the basic federal program that covers inpatient care in hospitals — when he was eligible for full retirement at 66. But during last year’s open enrollment period, he needed to add Part B benefits to cover doctors’ visits, outpatient care and other health services.

D’Aloisio says he felt overwhelmed by the switching process, which took three weeks, hours of phone calls and much time spent waiting for his email and voice messages to be answered. He says his eventual acceptance into Part B required a signed statement — a note — from a principal he had worked for in Rhode Island’s Department of Education, explaining how long he had worked there and that he was not covered by another state-sponsored healthcare program.

“When I first started looking into changing my plan, I figured, ‘This must be easy,’ ” D’Aloisio says, noting that he had worked as an administrator for decades before switching to teaching full time. Bureaucracies, in other words, didn’t faze him. “But for Medicare enrollment, I felt like I needed an attorney to get everything right.”

The confusion D’Aloisio experienced is common among Medicare enrollees and causes most of them to pay more than they have to, according to a recent study from PlanPrescriber, a company that provides free Medicare-related comparison tools and educational materials.

More than 90 percent of Medicare enrollees spend more than necessary on their healthcare, the study reports.

The company evaluated data from more than 25,000 Medicare beneficiaries who logged on to planprescriber.com and shared information about doctor’s visits and prescribed medications. At least 90 percent of them were able to pay less for Medicare benefits under alternative plans, the study found, and most of the seniors who inputted data were able to save up to $42 per month by switching to lower cost plans. The study was not peer reviewed.

With Medicare open enrollment approaching, now is the time to take action.

Medicare prescription drug premiums won’t go up in 2012, but premiums are only one factor to consider, according to Steve Zaleznick, a Washington D.C.-based lawyer who specializes in Medicare advice and retirement financing services.

“Traditional Medicare has got gaps” which exclude certain types of prescription drugs or doctor’s visits, explains Zaleznick. People generally choose one of two options to fill those gaps: They either enroll in a Medicare supplemental plan combined with a Medicare drug plan or they enroll in Medicare Advantage, which allows beneficiaries to receive benefits through private health plans.

What the PlanPrescriber study showed, he says, was that those gap-filling programs often provide benefits that people don’t need.

“There are alternatives available to you within those basic choices that can save you money,” he says.

Nate Purpura, Director Public Relations of eHealthInsurance Services — which owns PlanPrescriber — says his father recently cut unnecessary benefits from his own plan.

“He signed up for what he thought was the lowest cost plan,” he says. “But when he started to get his Lipitor prescriptions filled, his costs went up.” Purpura’s father had to rethink his coverage. Purpura says certain drugs are covered under certain plans and not under others. It takes a savvy Medicare participant to make heads-or-tails of these differences.

“One of the things people need to realize is that Medicare is complicated,” Zaleznick says.

Zaleznick recommends that once Medicare enrollees narrow down their choices themselves, they should “get in touch with someone who is very familiar with Medicare” to get some personal advice.

To do this, D’Aloisio used medicare.gov and PlanPrescriber.com to narrow down his Medicare choices. But he understands how people might have trouble even with the assistance of these free services.

Joe Baker, president of the Medicare Rights Center, admits there is some confusion over Medicare coverage, but it’s probably best to go through state-supported health insurance programs that can help people sort out their Medicare options.

His advice? First, “Don’t worry about it until you have to,” he says. Next, keep in mind that the eligibility age is 65 and that if you don’t follow the Medicare rules, you can be penalized or — as the PlanPrescriber study suggests — overcharged.

As this year’s enrollment dates approach, he said, people should call 1-800-MEDICARE or log onto medicare.gov to see what their options are.

“Medicare is complicated,” he says. “But it is possible to do it yourself. It’s like painting your house. You can have someone else do it or you can take the time to figure it out on your own.”

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