The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.
Every year it fields thousands of calls from people having problems with their Medicare. In its latest report summarizing calls from 2016, it grouped problems into three areas: 1) Medicare Part B enrollment rules and pitfalls; 2) difficulties with Medicare Advantage (MA) health service denials and coverage rules; and 3) financial hardship affording Medicare Part D cost-sharing.
Here’s a typical case: “Ms. B was covered by COBRA and undergoing cancer treatment. She declined to enroll in Medicare Part B because her employer incorrectly told her COBRA would pay as a primary health insurance payer after she went out on disability. While receiving expensive life-sustaining cancer treatment, the COBRA plan stopped paying primary and recouped a year of payments. Ms. B was left without health insurance, charged for thousands of dollars in medical bills, and threatened by providers to cut off her cancer treatment because she lacked insurance coverage for outpatient services.”
The report points out something we’ve been seeing for years, and which inspired our creation of the Savvy Medicare Planning program in the first place: knowing when to enroll in Medicare falls on the beneficiary without proper notification from the Social Security Administration or Medicare. And many employers’ benefits departments lack the Medicare knowledge to guide their employees and retirees on Medicare enrollment. “Whether due to the misinformation provided by employers or lack of access to reliable information about Medicare enrollment, enrolling in Medicare Part B at the right time after employer coverage ends is a challenge that many people can get wrong. Contributing to the problem is the lack of a formal notice about enrolling in Part B or how to use the Part B Special Enrollment Period (SEP), as well as a misunderstanding of Medicare’s coordination of benefits rules when people have other types of health insurance coverage,” the report says.
One area many people get wrong is the special enrollment period that allows people age 65 or older to defer enrolling in Medicare Part B if they have employer coverage. The coverage must be based on current employment of self or spouse; it can’t be a retiree plan. Medicare pays primary to retiree plans—but only if a person is enrolled in Medicare. Medicare also pays primary to COBRA—but again, only if you are enrolled in Medicare. “People with retiree coverage or COBRA who fail to enroll in Medicare will end up without a primary health insurance payer. In some cases, people may slip through and go unnoticed while the secondary health insurance erroneously continues to pay primary. Some beneficiaries explain that they are informed of this employer error only after they have incurred high medical costs. When this happens, Medicare-eligible beneficiaries run the risk of the insurer recouping all payments made to providers.”
The bipartisan BENES Act would improve Medicare notification procedures and fix the coverage gaps in the 5th, 6th, and 7th months of the initial enrollment period and in the January 1 to March 31 general enrollment period, which now makes new enrollees wait until July for coverage to start.
Another area of concern are Medicare Advantage coverage denials. These comprised about 40% of the 16,758 calls to the Medicare Rights helpline. In one case a woman experiencing gastrointestinal bleeding went to the emergency room of an in-network hospital where she was treated by an out-of-network doctor. The plan refused to pay for the doctor’s services because he was not in the network. This was not an isolated case. There were many complaints from Medicare Advantage enrollees who were careful to use in-network facilities where, unbeknownst to them, they were treated by out-of-network doctors.
Medicare Advantage enrollees also have trouble accessing needed care in their plan’s network because the pool of network specialists is limited and may result in long waiting periods for appointments. One person near Portland, Oregon, for example, had to wait up to four months to get an appointment with a dermatologist in her plan’s network to remove cancerous skin tissue. Medicare Advantage plans all have an appeals process, but navigating it is a stressful and onerous task.
About 20% of calls expressed concern about Medicare affordability. Of those, 53% were related to Part B premiums and 43% were related to Part D drug costs. And these calls were not just from low-income people; 44% of callers did not qualify for Extra Help due to the program’s low asset and income limits. One beneficiary who was scheduled to undergo a kidney transplant needed to take a specialty antiviral medication for six months after the transplant at a cost of $2,500 per month. He did not qualify for Extra Help and could not appeal. Medicare Rights is working to improve the affordability of prescription drugs for people on Medicare, including allowing “tiering exceptions” for drugs on a Part D plan’s specialty tier.
The report supports our mission to educate financial advisors on Medicare enrollment rules in order to save their clients some of these headaches. In addition to helping clients enroll in Medicare on time, we encourage you to be aware of Medicare Advantage pitfalls, particularly with regard to the narrowing of provider networks and lack of communication when an out-of-network doctor steps in to treat a patient at an in-network facility. If clients lack access to a good, robust Medicare Advantage plan with an extensive provider network, you might steer them toward Original Medicare with a comprehensive Medigap plan (F or G). For those who insist upon enrolling in a Medicare Advantage plan, alert them to some of these network pitfalls and advise them to confirm that they are being treated by an in-network doctor at the time of treatment (assuming they are conscious and not bleeding).