Medicare Open Enrollment: What You Need to Know

Joseph P. Williams
October 15, 2013

Call it the health-insurance version of an October Surprise.

This year, the annual Medicare fall open-enrollment period, during which seniors eligible for Medicare can choose or alter their coverage plans, will overlap with the launch of the health-insurance marketplaces mandated under the Affordable Care Act, also known as Obamacare.

[READ: What's the Difference Bewteen Medicare and Medigap?]

Finding the right Medicaid plan, figuring out deductibles and worrying about the prescription drug "donut hole" can be confusing enough, particularly for seniors entering the venerable healthcare system for the first time. But given the ongoing controversy over President Barack Obama's plan for health care reform -- and the scary ads aired during the extended wrangling over federal spending -- it's not surprising there's widespread uncertainty.

"The overlapping enrollment period is already causing some confusion" among Medicare recipients, says Paula Muschler, operations manager for Allsup, a private company that advises seniors on their health-care options. "With all the resurgence of interest in health care exchange, they are asking, 'How does this affect me?'"

The answer: not much. What follows are some FAQs about Obamacare's relationship with Medicare, and what seniors should consider during the open-enrollment period:

Q: Will Obamacare change my Medicare?

A: Your Medicare is still protected, it will be for the foreseeable future, and the Affordable Care Act doesn't negatively change it.

Medicare isn't part of the state-by-state health insurance marketplaces the ACA establishes, so seniors don't need to shop or replace the Medicare coverage they have now. Your Medicare counts as coverage so your benefits and security will stay the same.

"That's important for people to understand," said Juliette Cubanski, a Medicare policy analyst at the nonprofit Kaiser Family Foundation. Seniors "don't need to worry about the mandates, they don't need to worry about penalties" for not having health insurance.

Q: So you're saying that Obamacare won't change Medicare at all?

A: Not exactly -- you'll get a few more services, and save more money.

Because of the ACA, Medicare now covers certain cancer early-detection screening services, like mammograms or colonoscopies, with no out-of-pocket charges and without charging you for the Part B coinsurance.

[READ: Myths and Facts about Obamacare and Medicare]

"There are changes made that are actually improvements in benefits," Cubanski said. "That's something for people to actually look forward to."

Seniors now qualify for a free yearly "wellness" visit to a doctor, and health care reform is slowly closing the Medicare prescription drug coverage gap. More on that later.

Q: What's the open-enrollment period?

A: The Medicare open-enrollment period, which runs from Oct. 15 through Dec. 7, is the window for 50 million Medicare recipients to review, tailor or change their policies.

Some Medicare plans during the past year may have been altered or premiums may have risen or fallen, according to Muschler. Seniors already enrolled in a Medicaid plan can review their policies, adjust them or enroll in new health plans that better suit their needs -- and the sooner, the better.

"Don't put it aside, don't think your plan isn't changing," she said. "It might be small changes but they may be changes you need to pay attention to. Seniors need to act now, don't delay it.

Even if their current Medicare coverage plan is satisfactory, Muschler and others recommend reviewing it anyway to make sure it hasn't been reworked significantly since last year. A simple switch to a competing plan can save thousands in out-of-pocket costs, including prescription drug co-payments.

[READ: How to Make the Best of the Medicare 'Donut Hole']

Q: I turn 65 in a few months -- I'll be eligible for Medicare but I haven't enrolled yet. What should I do during the Open Enrollment period?

A: Seniors who will become Medicare-eligible soon have a different deadline.

According to the federal government's Center for Medicare Services, Medicare enrollees aren't eligible for during open-enrollment: they can sign up for the health plan three months before the month of their 65th birthday, but the eligibility ends on the third month after the birthday month. But don't wait until the last minute.

"The reason you want to start early is you don't want any gap" in medical coverage, Muschler said. "You need to review your options and how you will use your coverage."

Things to consider: What doctors will you use? Do you have a preferred health-care provider or hospitals? What are your health needs? Will your plan travel with you if you move? What about a spouse, and dependents -- are they covered? Can you afford higher premiums for broader coverage?

Self-education is job one for the new enrollee, Muschler said. Coming up is an outline of some available resources that can help.

Q: Should I sign up for Obamacare instead?

A: Not if you're enrolled in or eligible for Medicare. The Health Insurance Marketplace under the Affordable Care Act is designed to help younger people who don't have health insurance.

Even if you're still on the job and have health insurance through your employer, if you're 65 or older the new Health Insurance Marketplace isn't for you. Moreover, it's illegal for someone who knows that you have Medicare to sell you a Marketplace plan.

Q: What about the gap in Medicare Part D prescription-drug coverage -- the so-called "Donut hole"?

A: Obamacare helps shrink the payment gap that kept some seniors from getting prescriptions they needed but couldn't afford.

Last year, in the early phases of the ACA, seniors enrolled in Medicare Part D got a 50 percent discount on brand-name drugs and 14 percent off on generics. As health-care reform proceeds, out-of-pocket prescription-drug expenses will drop each year until the donut hole closes in 2020.

In fact, according to the Center for Medicare Services, key parameters for Part D prescription drug coverage will actually go down next year compared to this year. For example, the Part D deductible will fall from $325 to $310, and the donut hole will shrink by $200 -- reforms that will put more money back into the pockets of Medicare beneficiaries.

Q: What about Medicare Part B -- will premiums go up because of the ACA?

A: No; in fact, they might get lower.

The AARP has predicted that health-care reforms could hold down the costs of Part B premiums, if not lower them. Congress established an official formula for setting Medicare Part B premiums years ago and that formula won't change under Obamacare.

Q: I've heard some scary things: that Medicare could go away, and Obamacare could replace it.

A: There are no plans to replace Medicare.

The life of the Medicare Trust fund will be extended to at least 2029 -- a 12-year extension due to reductions in waste, fraud and abuse, and Medicare costs, which will provide seniors with future savings on premiums and coinsurance.

Q: What kind of information do I need to sign up for Medicare?

A: You'll need the basics -- name, address, Social Security number and current health insurance information -- and a few extras if you're married, have dependents or meet certain conditions.

That includes your spouse's and children's Social Security or health care information; your employer's name and address if you get health care through a group plan; and information about your Worker's Compensation claims or federal disability benefits, if they apply. The Medicare Initial Enrollment Questionnaire, along with a complete list of documents you'll need, is available online at Medicare.gov, or at your local Social Security office.

Q: Okay, I think I understand. But If I need more information, where can I get it?

A: There are lots of resources around that can help clear up any lingering confusion.

That includes Medicare advisory companies like Allsup; web sites by advocacy groups for seniors such as AARP; private insurance companies and nonprofit public-interest entities like the Kaiser Family Foundation also have strong online presences and hotlines. U.S. News & World Report also has a guide that offers information for consumers who are seeking to understand or purchase Medicare plans.