October 5, 2011

Time for a Change?

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

A big change and welcome relief for the Medicare Annual Enrollment period this year is moving the date to begin Oct. 15 and ending Dec. 7. What a welcome relief! The Annual Enrollment period allows Medicare Beneficiaries the option to change their choice of health plans and/or prescription drug plans for 2012. In prior years, the Annual Enrollment period has been Nov. 15 to Dec. 31. With traditional holiday season, this time period was really not convenient for many Medicare Folks. This year’s change in dates is a nice change.

Folks if you are happy with your Medicare Choice, no action required during the Annual Enrollment Period. Your plan will renew automatically. Annual notification of changes will be mailed to all soon. But if you wish to change that choice, you may do so beginning Oct. 15. The new plan choice then will become effective Jan. 1, 2012.

Let’s review the choices we have for Medicare. This choice is available for Medicare Beneficiaries that do not have a retiree plan provided by a former employer. Really the choice is simple. If we do not have major medical insurance continuing from a former employer, we may opt to remain with Original Medicare or opt to select a Medicare Advantage Plan. Original Medicare is major medical insurance provided by the government and regulated by the Center for Medicare and Medicaid Services (CMS). Medicare Advantage Plans are offered by private insurance companies, but are
regulated by CMS. In order to participate in Medicare, retirees must have paid into the social security system for a total of 40 quarters or 10 years.

President Lyndon Johnson’s ‘Great Society’ in the later part of the 1960s, introduced Original Medicare with two parts: Part A Hospital and Part B Medical Services. These two original parts have not changed. However, since there is a deductible for hospitalizations and co-insurance for medical services, most Medicare folks elect to purchase a Medicare Supplement or Medigap policy to cover that deductible and co-insurance. And this is where the complexity with Medicare begins. Medicare Supplement policies are standardized. All benefits are identical from insurance company to insurance company, but the premium could be different. In 2011, there remains 10 Medicare Supplement policies and 30 prescription drug plans for these Medicare Regions. That’s where the confusion and complexity of Medicare rests. What was originally two basic parts to original Medicare has now split into two additional parts – a Medicare Supplement and a Prescription Drug plan. This is one choice Medicare beneficiaries have.

Another choice we have is the Medicare Advantage Plan. Advantage plans are not offered by Medicare, but these plans are clearly regulated by CMS. This year, there are eight different Medicare Advantage Plans offered by private insurance companies for these Medicare regions. Medicare Beneficiaries may choose one plan as an alternative to Original Medicare. Most Medicare Advantage Plans (but not all) include a prescription drug plan.

To make sense of these choices, our firm will continue monthly Community Meetings. Our next meeting is scheduled for Oct. 14, 10 a.m. at the Bettendorf Public Library. Please call us for details or for a reservation (563) 332-2200. In addition to the monthly Community Meetings, we will be available again at HyVee Devils Glen Rd to answer your Medicare questions beginning Oct. 4.

On the financial side, our firm continues to offer safety from stock and mutual fund volatility. See our ad below referencing relief from the drama associated with market volatility. Call us or email us for details on these safe money harbors.

Enjoy these beautiful fall days.

Richard J. Schillig, CLU, ChFC, LUTCF is an Independent Insurance and Financial Advisor with RJU and Associates, Inc. He can be reached at
(563) 332-2200.