What to Do When You Lose Employer-Provided Coverage
Change is never easy, especially when it comes to health benefits. However, with change comes the opportunity to get a benefit that better fits your needs and potentially saves you money. If you are 65, retired or retiring and your employer is no longer providing retiree health or prescription drug benefits for you because you are Medicare-eligible — don’t panic! There are many options under Medicare that can provide you with the coverage you need to stay healthy without draining your retirement fund.
What Will Be Different When I Transition to Medicare?
When you have employer coverage, your employer pays a portion of your healthcare costs for medical expenses, prescription drugs and other items. You may pay a monthly premium for this coverage. You may also pay a deductible and/or copayments in addition to that premium. Your employer pays the balance of the cost for those services. Your employer also determines the types of plans to make available to you (such as a PPO, HMO, high-deductible HRA, prescription, dental), and they choose the insurers and benefit companies who manage those programs.
Your Medicare Options
- Medicare Part A – Covers hospital care, nursing facilities, nursing home care (not custodial or long-term care), hospice and home health services and inpatient care in a religious nonmedical healthcare institution. Part A is “Original Medicare” and is operated by the government.
- Medicare Part B – Covers medically necessary doctor visits, services and supplies to diagnose and treat a medical or mental health condition, preventative services, ambulance services, and medical equipment (such as canes and blood sugar test strips). Part B is “Original Medicare” and is operated by the government.
- Medicare Part C – Also known as Medicare Advantage, Part C includes plans offered by private companies that combine Medicare Parts A and B into one plan for greater convenience. Many of these plans also provide prescription drug coverage, and some may also provide coverage for additional services, like hearing, dental and vision.
- Medicare Part D Prescription Drug Plan (PDP) – Plans offered by insurance companies and private companies approved by Medicare that provide coverage for prescription medications for beneficiaries eligible for Part A and/or enrolled in Part B.
- Medigap (Medicare Supplement Insurance) plans – Plans offered by private companies that help cover some costs not paid by Original Medicare (such as deductibles, coinsurance and copayments). There are 10 supplemental plans that offer a variety of supplemental options. The plans are labeled A, B, C, D, F, G, K, L, M, and N.
As a Medicare beneficiary, a portion of the cost of your healthcare is paid by Medicare. You will pay monthly premiums, deductibles or copayments/coinsurance, but the amount you pay, and when, depends on which Medicare plan YOU choose.
Choosing the Right Route
Person who is licensed and authorized to sell Medicare plans. Note: Medicare prohibits door-to-door sales without your previous permission for Medicare plans. If someone comes to your home without an appointment to discuss a Medicare plan, turn him or her away and report the incident to the Centers for Medicare & Medicaid Services (CMS).
With Medicare, you can choose from many plan options that can suit your needs. Following are some tips to make it easier to sort through all of your options.
- Read up on plans: Familiarize yourself with the various parts of medicare and the options available under them. Your employer or insurance agent/broker may provide an educational kit or a website that offers videos and other information to help you understand your options. www.medicare.gov is another good resource.
- Make a list: Write down all of the health expenses you have had in the past 2 years. This can help you determine how much coverage you need:
- Prescription medications
- Number of doctor visits (primary care and specialist)
- Number of hospital and emergency room visits
- Lab work
- Medical supplies
- Talk with an agent or broker: Many employers will work with an organization that provides brokers and counselors who can help you select coverage that best suits your needs. Talking with a broker will not cost you anything, and it can help you make a decision about which coverage options are best for you. Before you meet with an agent or broker, be sure to read these tips to make the conversation more productive.
- Know your dates: For most people, Medicare Part D enrollment takes place during Annual Open Enrollment from October 15 through December 7 each year. You must enroll during this time to have coverage for the following year, and there is no grace period. Mark these dates on your calendar and be sure to start your research early to avoid over-paying or being under-covered. There is a Special Enrollment Period for Medicare members with special circumstances, such as those who move to a different state or lose employer coverage.
You may find that enrolling in Original Medicare combined with a Medicare supplement plan and/or a stand-alone Medicare Part D prescription drug plan might be best for you. Enrolling separately allows you to choose a Part D plan with a broader formulary (list of covered medications), a cost-saving pharmacy network with preferred pricing, and/or convenient home delivery pharmacy options.
Or, if you want the convenience of having all of your health and possibly your prescription coverage (Medicare Parts A, B and D) bundled into one plan, you can enroll in a Medicare Advantage Plan (Medicare C).