Medicare in the times of COVID-19

Don’t Miss Medicare Enrollment Deadlines!

Usually, my October column focuses on reminding you about Medicare Annual Enrollment Period (or AEP for short). However, COVID-19 has thrown a wrench into our “usual”. Because so many of our readers have been affected by furloughs and layoffs, we need to talk about three different kinds of Medicare enrollment periods.

Missing Medicare deadlines has always been expensive, and now is the time to do what you can to stay informed and act timely.

Initial Enrollment Period

The Initial Enrollment Period for Medicare spans the three months before, the month of, and the three months after your 65th birthday.

Those who are already receiving Social Security will receive their Medicare card automatically for Part A and Part B. Those who are not on Social Security need to sign up. Keep in mind that there could be a gap (ranging from one to three months) between the time you sign up during the initial enrollment period and the time your coverage starts.

Normally, an individual could walk into a local Social Security office for help with signing up for Medicare. At the time of this writing, all Social Security offices remain closed for walk-in visitors. The good news is that you can submit enrollment forms online, and phone lines are open for questions.

Remember that failing to sign up for Medicare on time can lead to stiff late-enrollment penalties that continue for life. Those who are still employed when they turn 65 can stay with employer-provided group coverage, but Cobra coverage does not qualify as a valid exception. So, if you are older than 65, have lost your job, and are currently using Cobra insurance coverage from your former employer, read on for Part B Special Enrollment Period below.

Part B Special Enrollment Period

What happens if you were working past age 65 and have stayed on your employer’s insurance up to this point, but have recently lost your job as the economy has ground to a standstill? Individuals in this situation can and should take advantage of what’s known as Part B Special Enrollment Period (SEP). Part B SEP is available to you for up to eight months after you lose coverage from employment.

Timing is really important here, so remember that you can have no more than eight consecutive months without coverage from either Medicare or insurance from current work. For many people, it makes sense to enroll in Medicare before they lose coverage from a current job because that strategy can help them avoid gaps in coverage. After all, we are not just worried about late-enrollment penalties. You may be responsible for any health care costs you incur in the months after losing job-based coverage before your Medicare coverage takes effect, and those bills can snowball quickly.

Annual Enrollment Period

Medicare Annual Enrollment Period begins on October 15, 2020 and runs through December 7, 2020. This is your time to make changes to Medicare Advantage and Medicare Part D coverage. An annual review of your options is the only way to ensure that your Medicare choices make financial sense for you and your family, so mark your calendar!

What does an annual review look like? Begin by researching Medicare Part D plans that are available to you. The main Medicare website (www.medicare.gov) is a good starting point, and the phone line at 1-800-MEDICARE can also be a great resource.

If you have a significant prescription load, you may look into potentially switching your pharmacy. Drug companies negotiate special discounts with certain pharmacy chains, and a bit of legwork can save you significant money over the course of the year.

Update your list of current medications and dig into prescription restrictions by plan (you will have to manually input each prescription into www.medicare.gov forms to get the details). Some plans may force you to try a less expensive generic version of a drug before being allowed to order a more expensive alternative. Others require your doctor to get plan authorization before being able to prescribe certain medicines. Make sure you understand these details, because they will make a real difference in your experience with the plan!

Finally, be sure to estimate and compare your overall annual cost of choosing one plan over another. The biggest mistake I see people make is picking a plan based on premium alone. Add up your estimated co-pays and look into what an emergency room or a hospitalization might cost you. Do this once, and you can save yourself significant money and trouble for the year!