Medicare Traps

 

The Big Mistakes People Make in —and How to Avoid Them. Seniors choosing Medicare plans can be left with higher costs or fewer doctors than they expected; ‘I was so stupid’

Seniors choosing Medicare coverage often fall into hidden, costly traps that can leave them stranded—and unable to get the healthcare they want. But there are ways to avoid the pitfalls, if you know how.

Lothaire Bluteau, 66 years old, an actor who lives in West Hollywood, Calif., last year enrolled in one of the private plans known as Medicare Advantage. After he was diagnosed with prostate cancer last May, he discovered the specialists he wanted to see weren’t in his UnitedHealthcare HMO’s limited network. He faced delays getting tests and treatment.

He got a bigger shock when he tried to get access to more doctors by switching to traditional Medicare, run by the federal government. Bluteau worried about the steep out-of-pocket costs, so he tried to get a fill-in policy known as a Medigap plan that would cover many of those expenses. Yet health insurers said no because of his cancer diagnosis.

He didn’t realize he could be rejected. “I didn’t inform myself enough,” Bluteau said. “I was so stupid.”

Bluteau’s struggle to get a Medigap plan shows one of the risks seniors may miss when they are selecting coverage. Medicare beneficiaries generally don’t know that they have a right to get Medigap policies only at certain times, and if they don’t jump then, they might not be able to purchase them later.

Medicare’s open-enrollment period kicked off Sunday and goes until Dec. 7. During that time, beneficiaries can pick new plans for next year. The options include traditional Medicare from the government, or the wide array of Medicare Advantage plans, which are private-insurance products that wrap in the same benefits.

Advertisements for Medicare Advantage plans especially may promise rich bonus benefits such as dental and vision coverage, or even help paying for food, as well as generous financial terms. But consumer advocates said seniors should be mindful of the downsides. For those going through Medicare open enrollment this fall, here are five of the biggest pitfalls—and how to avoid them.

Bluteau, 66, discovered the specialists he wanted to see weren’t in his UnitedHealthcare HMO’s limited network.

Medigap Trap

One of the biggest traps is the one that claimed Bluteau. Patients with health issues may want to move to original Medicare, but they can’t buy Medigap policies. “This is where people get stuck,” said Kata Kertesz, a senior policy attorney at the Center for Medicare Advocacy. “They get really sick, and they can’t switch.”

Medigap, or Medicare supplement insurance, doesn’t have the same rules as most health insurance. For other types of coverage, insurers can’t reject you or charge you more based on your medical conditions. With Medigap, such guarantees are available only at certain times. 

Medigap is vital for many people who enroll in traditional Medicare. The original government program can leave beneficiaries with big out-of-pocket bills for their care, and there is no cap on how high that tab can go. Medigap policies help cover those costs. They have standardized designs, listed here.

Your best chance to get Medigap is when you first join Medicare as a senior, after you turn 65. Then you have a six-month window when you can buy a Medigap policy, and insurers can’t turn you down or charge you more because of your health conditions. 

There are a few other times when you have that federal “guaranteed issue” right, including if you opt out of Medicare Advantage during a limited initial “trial period.” You can find them here. When you aren’t in a protected window, however, you might not be able to get a Medigap plan.