Caterpillar Retirees on Medicare

Questions about HMO Insurance?

Medicare Annual Enrollment Period: Beginning October, Medicare and insurance companies will release information on plans that will be offered in 2010. This includes the MedicareRX (prescription) Plans and Medicare Advantage Plans (MAs). It’s important to know that these plans can and probably will change year to year. In addition, it is prudent to keep up with these changes and how they affect you.

Let’s look at MAs first. So what exactly is a MA? Original (or traditional) Medicare is administered by the Center for Medicare and Medicaid Services (CMS). In the late 1990s, CMS began contracting with private insurance companies to offer plans in place of Original Medicare, with the requirement that they be at least as good as the Original Medicare. Private insurance companies would administer, pay claims and service these plans. CMS would pay these insurance companies a monthly fee per person enrolled, to perform these services. The enrollee would continue to pay Medicare Part B premiums and must present his/her MA insurance card each time they see any medical provider. MA plans have taken a foothold in America now insuring with 1 in 5 senior.

MAs may be offered in three formats. First - Medicare Health Maintenance Organization (HMO insurance) plans, in most cases, require an enrollee to choose a primary care physician (PCP) and receive medical services within a specific network of providers. These plans are the most restrictive as far as restricting their clients to this specific network of providers. The enrollee must live in a service area, but may receive emergency benefits from most providers if on vacation, etc.

Second - Medicare Preferred Provider Organization (PPO) plans allow enrollees to receive in or out of network services, but direct their enrollees toward in-network medical providers by providing better benefits.

Third - Private Fee for Service Plans (PFFS) allow more access to providers than the two aforementioned types of MA plans. . The medical provider must accept Medicare and agree to the plan’s payment terms. If the provider will not accept the PFFS’s terms, the enrollee would need to find another provider who will accept the PFFS plan. These plans are currently in a transitional period. In 2011, CMS will require PFFS plans to have a network of providers. Therefore, these PFFS plans will be much like PPO plans and a number of insurance companies have already started eliminating PFFS.

A forth option, if a person eligible for Medicare has chosen original Medicare, they should then buy a Medicare supplement (also called a gapfiller). People choosing this option have the most flexibility in choosing their providers. Basically, any provider who is in the Medicare program may treat these people and provide services (you need not worry about networks). These expenses are then covered under the benefit terms of Medicare and the supplement. These people also should enroll in a MedicareRX (Medicare Part D) plan for prescription drug coverage. Buying a Medicare Supplement and Part D plan will, most likely, have a higher premium than the MA options.

It is important to know: If a person is eligible for Medicare and they or their spouse are yet working, they may have other options and should review their situation with their employer’s HR department and/or a professional specializing in coverage for Seniors.

Enrollment in MAs and MedicareRX plans for 2010 during the annual election period- AEP for 1/1/09, can begin as early as 11/15 and can continue up to 12/31. HOWEVER, do not wait – this writer recommends that you make any changes in enrollment by 12/15. This should allow you to confirm the enrollment was received and processed correctly by 12/31.

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