Medicare Enrollment: So You Say It’s Your Birthday?

Snip20140820_21If you turn 65 this year, you are entitled to Medicare benefits, so you need to sign up if you choose to receive them. If you’re currently drawing Social Security benefits, you will be notified about your Medicare eligibility. If not, contact your local Social Security office or visit www.socialsecurity.gov to request your benefits.*

  • You should sign up within the seven-month period that spans the three months before the month you turn 65 and the three months after. Otherwise, you’ll have to wait until the next January-to-March enrollment period – and coverage won’t begin until the following July.
  • If you want to enroll in a Medicare Advantage policy, the open enrollment period is from Oct. 15 to Dec. 7 each year.
  • If you are covered by your or your spouse’s employer, you don’t have to enroll at age 65, but you must be able to prove that you had this coverage if you sign up later on.**

Maximizing Medicare

One of every three U.S. residents is insured by Medicare or another government health care program. And about 30 percent of the 52 million Americans enrolled in Medicare opt out of “traditional Medicare” in order to choose a private Medicare Advantage insurance plan – a number that has more than doubled in the last nine years. With Medicare Advantage, the health insurer is paid by the government on a per-person per-month basis, and the insurer coordinates the member’s care.***

While traditional Medicare tends to have more providers in the network, individual Advantage plans may contract with the high-quality physicians who don’t contract with traditional Medicare. Plus, those plans may offer more coverage and benefits than traditional Medicare, such as gym memberships or vision care. Currently, the government reimburses the insurance companies at a higher rate for Medicare coverage under Advantage plans.

The more the government reimburses health insurers, the more likely health insurers are to enter this market. This creates more competition for Medicare recipients, which has resulted in higher enrollment. We also see more money spent by insurers to market these plans – but a recent study revealed that paying plans substantially more does not necessarily lead to much better quality. Instead, the study’s analysis points to greater profits among the participating health insurers.

This finding is important when you consider that a key feature of the Affordable Care Act calls for lower reimbursements to the Advantage plans. The study concluded that reimbursement cuts would not cause significant harm to consumers in terms of quality of care and coverage as previously thought – even by the researchers who conducted the study.

“There’s a general view that as the government pays more for health care or for many services, that this is likely to benefit the people enrolled in the program, the people attending the school, the people driving on the road or what have you,”commented Mark Duggan, a Wharton professor and co-author of the study. “Our findings pretty clearly indicate that paying somewhat less doesn’t necessarily harm consumers. And conversely, paying somewhat more doesn’t necessarily benefit consumers all that much.”****

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The information contained in this material is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. It is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. We are not affiliated with the U.S. government or any governmental agency.

*Fidelity, “Answers to Key Medicare Questions” June 25, 2014; https;;//www.fidelity.com/viewpoints/retirement/understanding-medicare-options.
**Ibid.
***Knowledge @Wharton, “Why Consumers Don’t Gain Much from Medicare Advantage, “June 20, 2014; http://knowledge.wharton.upenn.edu/article/medicare-advantage-offer-much-advantage.
****Ibid.