Ward Garner, a senior vice president and certified financial planner, has been assisting clients for Bill Few Associates in Ross since 1995
Bill McKendree, coordinator for eight years of the Allegheny County Apprise program, leads a staff of counselors who advise the public on the many complicated details of Medicare and their options and decisions relating to it. The Apprise program is funded by the federal government and operated by Family Services of Western Pennsylvania in partnership with the county Area Agency on Aging.
Aging Edge sought information from Mr. McKendree, 62, who was previously a practicing attorney, on the significance of the Medicare “open enrollment” period that runs from Oct. 15 through Dec. 7 and what people 65 and older should be considering during this time. (The interview has been edited for purposes of space and clarity.)
Aging Edge: First, why should those receiving Medicare care about the open enrollment period, and how are they affected?
McKendree: The open enrollment season is the time that individuals that are currently enrolled in the Medicare system can decide whether their current product is still going to work for them or whether they need to consider changing products. The impact of that choice goes into effect Jan. 1 of the upcoming year, and around the beginning of October the insurance plan carriers renew their products, and the public and individuals have the chance to review what those products look like and whether to stay with their existing product or sign up for a new product.
Aging Edge: What should people be looking at in particular?
McKendree: One is the Part C Medicare Advantage options, the HMO and PPO plans that act effectively as replacements for relying on Medicare Part A and Part B as primary coverage. They often reach outside normal Medicare coverage and provide things such as basic eye care, dental care and health club memberships, and may also include Part D prescription drug coverage. People should also be looking at those Part D drug plans, which are often stand-alone and not attached to an Advantage plan.
Aging Edge: So this enrollment period is really about existing beneficiaries instead of new ones?
McKendree: It’s also time for people who will be enrolling sometime in 2017 to at least look at what the products are going to be, even if they’re not necessarily going to enroll during the enrollment season.
Aging Edge: The many private insurers have sent out a lot of information about the changes to their Medicare Advantage plans, but in many cases people who have the Medigap coverage — Part A and Part B — would want to stay in those same Medicare supplements?
McKendree: The positive characteristic about Medigap coverage is I can go to any doctor, any hospital, any service provider anywhere in America that works with Medicare. If I rely on a Medigap supplement, I can purchase a supplement that is qualitatively so good that it can eliminate all of my co-pays and all of my deductibles that Part A from the government doesn’t cover for hospitalization and Part B doesn’t cover for outpatient care. And once defined, those Medigap plans do not change at all. They must adhere to those terms for the rest of the life of the contract.
Aging Edge: And what are the costs for someone on Medicare who also uses the Medigap coverage?
McKendree: Part A from the government typically has zero cost for most people. For Part B, the basic cost you pay to the government is as low as $104 monthly, or it could be over $120 depending on income. People will pay that even if in addition they have the private insurance product to enhance their basic Medicare coverage. The Medigap plan’s additional premium could be typically something like $160 to $180 monthly for the most comprehensive plan, which is called the F level.
Aging Edge: What would make a person want to leave a Medigap plan for Medicare Advantage?
McKendree: It is usually a person who is unable to afford the premium associated with Medigap — the over $150 premium and the stand-alone Part D for prescription drugs — or they can afford it but they do not see the value in spending that much money for quality health care coverage. They’re not that sick currently and don’t see themselves becoming so sick that it justifies spending that much, especially when I tell them they can get an Advantage plan for as little as zero cost.
Aging Edge: Advantage plans don’t cost anything?
McKendree: It depends on the plan. A more typical range is a $50 to $100 premium, or there may be zero premiums but with larger deductibles and co-pays. The people who gravitate toward those believing they’re healthy are willing to accept a risk that if they guessed wrong, they’re going to pay more in co-pays and deductibles. If people are going to embrace the Advantage plan concept, I suggest they embrace it for the real value — get the least expensive product because that’s where the savings are.
Aging Edge: So a lot of healthier people would be wise to consider an Advantage plan during this open enrollment?
McKendree: This would be the time to see if there’s an Advantage plan out there that can do a better job for my needs, my circumstances, but once you leave Medigap, it’s difficult to ever get it again. They are using the Advantage plan concept for the rest of their lives, and they are under much a greater personal mandate to look at the different products, because making a bad choice could have significant repercussions. Unlike Medigaps, which allow you to go to any doctor or hospital in America, you have to be concerned about your network and knowing if your doctors and hospitals are part of this Advantage product. The question in an Advantage plan often becomes whether saving money is worth limiting access to the doctors and hospitals you want.
Aging Edge: If the open enrollment period is just as important for reviewing Part D prescription drug coverage, what are the issues to weigh there?
McKendree: The first step in selecting a good Part D plan is accessibility and whether all of your drugs are covered, because if a plan doesn’t do that, no matter how good the coverage is, the plan is flawed for that individual. So I ask people to show me a list of their drugs, and whether they use generics or non-generics. We take a look at the plans that cover all of the drugs you’e taking, and then what is the effective cost. The premium is important, but way more important is the cost-share that the plan imposes on you. Not all plans cover drugs the same way at the same level — there could be a difference of $30 or $40 a month for a drug’s co-pay, and for drugs, a co-pay is the most important thing, because that is something you use every day that defines your costs every month.
Aging Edge: The co-pays matter more than deductibles in the Part D drug plans?
McKendree: Co-pays will always exist with any Part D plan, while deductibles are variable. Some Part D plans have deductibles, and some don’t.
Aging Edge: Pennsylvania helps additionally with prescription drugs through its PACE and PACEnet programs for low to moderate income seniors. How do those assist in Part D costs?
McKendree: If you’re eligible, you’re not going to hit the Part D donut hole (the present $3,310 threshold for annual drug costs at which people become solely responsible for payments), no matter what the cost of the drugs are and no matter how many you take. There will be a guaranteed limit on what you have to pay, no more than $15 for a non-generic in PACEnet. Many people with PACE or PACEnet can avoid a Part D plan and use it to take a Medicare Advantage plan that might have zero premiums or less than $20 in monthly premiums.
Aging Edge: It seems there’s so much to consider it can be very confusing, so what are the most common mistakes people make?
McKendree: Often the mistake is people simply not being fully aware of all the options they have and not knowing something out there could work better for them, and they may not have access to a computer or the Internet and use them in an effective way, so that they’re just not swayed by the marketing of the plans.
Aging Edge: So if people can’t get to or can’t understand the information the government provides at www.medicare.gov, how do you help?
McKendree: In Allegheny County, they can call us at 412-661-1438 (or statewide, 1-800-783-7067). It will probably go to voice mail at this time of year, because we’re receiving upward of 100 to 200 calls a day. Ideally, we’ll get back to you within 24 hours, though it could take up to three business days, and we’ll either resolve questions immediately over the phone, or we can set up an appointment in our office or you can attend one of the open enrollment events we have in the community.
Aging Edge: If I have so many questions I’d like an office appointment, what then?
McKendree: It might take a couple of weeks to set up during open enrollment season, but the season runs to Dec. 7 and when we help you narrow down your choices, any change you make can be accomplished in as little as 24 hours.
Aging Edge: And what do you do during those sessions so I know whether to make changes?
McKendree: We simplify. We give people a structure to all of the chaos, to all of the choices, giving them a model of how they can do effective comparison. It usually takes between 30 minutes to an hour and a half. And something we also do is check if their income and assets make them eligible for additional assistance benefits, such as from PACE or Medicaid. We’re committed to not letting someone slip through the cracks.
Gary Rotstein: email@example.com or 412-263-1255.