There is nothing simple at all about the Affordable Care Act and how it is changing the face of health insurance. To add to the confusion, the time frame for people to sign up for a health plan is called the open enrollment period. This is a similar name to that of the time frame allowing Medicare recipients to make changes to their existing Medicare coverage: the Annual Election Period (AEP). Needless to say, this is causing a considerable amount of confusion for many people.
There Are Differences
I want to clarify the many differences between the ACA open enrollment period and the Medicare Annual Election Period, which are now running concurrently.
The main difference in the time periods involved is that the ACA enrollment period began earlier (October 1) and runs much longer (until March 2014). The Annual Election Period for Medicare is from October 15 through December 7. However, many seniors hear about open enrollment and the ACA and think that this means they, too, have to go to the health exchange and purchase a health insurance policy.
This is completely untrue, as there are no Medicare supplement or Medicare Advantage plans available on the health exchanges. Additionally, the mandated coverage for the Affordable Care Act has nothing to do with Medicare-eligible senior citizens and their health insurance. I want to caution you to not give in to the fear that you are going to have to pay a penalty if you do not enroll in a health plan through any of the health exchanges!
Don’t Get Complacent!
At the same time, just because the open enrollment period for the Affordable Care Act doesn’t apply to you does not mean you should sit back and do nothing. After all, if you receive Medicare now or are becoming Medicare-eligible during the Medicare Annual Election Period, you do still need to take steps to make sure you have the coverage you need.
If you will be eligible for Medicare between October 15 and December 7, you do need to take steps to make sure you have coverage in place from your eligibility date through December 31. You also need to have coverage that will go into effect on January 1. Your insurance professional can help you decide which coverage you need, and can help you make sure there are no gaps in coverage.
If you are covered by Medicare, with or without a Medicare supplement plan (or if you have a Medicare Advantage plan), you are considered insured under the Affordable Care Act laws and will therefore not face a penalty. However, the laws do have an impact on the Medicare coverage you receive.
Changes to Medicare Coverage
If you are covered by Original Medicare and one or more supplements, one of the changes you will see are slightly higher premiums and deductible amounts. However, you may see a decrease in prescription drug costs as you reach the “doughnut hole,” or coverage gap, for prescription drugs.
If you have a Medicare Advantage plan, you may see changes in coverage as well. Some changes to Medicare Advantage plans as a result of the ACA have come in the form of higher rates with less coverage. Additionally, companies may change coverage from year to year. This can be done through a premium increase, limits on certain prescription coverage, or any number of other actions.
The bottom line, whether you have Original Medicare or a Medicare Advantage plan, is to make sure you have the coverage you need. Do not assume that your plan will stay the same from year to year and neglect to review it. This could result in increased medical expenses for items that were only previously covered, or covered at a different level.
Seek Help From a Medicare Specialist
One of the best ways for you to make sure you have the correct coverage for your retirement years—and to make sure you are enrolling in the correct Medicare Advantage or Medicare supplement plan within the Annual Election Period—is to talk with a licensed agent or broker.
Many insurance professionals specialize in Medicare-related health insurance, so I would suggest seeing someone who is a Medicare specialist. They can help you review your current coverage and help evaluate whether you are adequately covered. They can also help you shop around for the best prices on Medicare supplement or Medicare Advantage plans.
Just remember that you are not going to pay a penalty for not being insured under the Affordable Care Act as long as you are covered by Medicare or an Advantage plan. Reviewing your policy on a yearly basis is important, though, and you should be sure to keep up-to-date on any changes that may occur.
However, also keep in mind that the right Medicare specialist will be more than happy to help you throughout the process of policy review and coverage changes during the Medicare Annual Election Period. Please do not feel like you have to make all of the decisions yourself, as health insurance can be a very confusing and overwhelming prospect.
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.