Medicare Enrollment: Public Option vs. Private Insurance

The annual Medicare Open Enrollment Period is October 15 – December 7.  Here are some things you can do during the annual enrollment period:

  • Join a Medicare Prescription Drug Plan [1] or switch from one Medicare drug plan to another Medicare drug plan.
  • Change from a Medicare Advantage Plan [2] back to Original Medicare [3].
  • Join a Medicare Advantage Plan or change to another Medicare Advantage Plan.

If you have not yet reached age 65 and enrolled in Medicare, [4] you will need to enroll during your Initial Enrollment Period.  For more information see below.

[1] Medicare Prescription Drug Plans (PDPs) are administered exclusively by private insurance companies, pursuant to the 2003 legislation which first authorized the complex drug benefit.  No public option exists or has been authorized yet by the U.S. Congress.  Consequently, it is important to research the private insurance plans each year on to identify and enroll in the plan that provides the best coverage in terms of out-of-pocket costs and access to your medications and pharmacies.  Otherwise, you will be automatically re-enrolled in your current PDP and subject to any changes in plan coverage from the previous year.

[2] Medicare Advantage Plans (MAPDs).  Authorized by Congress in 2003 as Medicare Part C, MAPDs are private insurance plans that administer comprehensive Medicare benefits:  Parts A, B, and D.  While MAPDs may offer lower premiums, or $0 premium, and extra benefits, such as dental or vision benefits, to induce enrollment, studies have shown that MAPD plans administered by private insurance companies are more likely to limit benefits and deny coverage of needed medical services when compared to the Original Medicare Program.  Furthermore, if you enroll in a MAPD, you cannot be enrolled in a Medigap Plan or Medicare Supplement Plan (see last paragraph below).

[3] Original Medicare, also known as Traditional Medicare, is the original Medicare program administered by the federal government since Medicare was enacted in 1965 (  Original Medicare administers Part A and Part B benefits.  For maximum coverage, you can enroll in Original Medicare, a Part D Drug Plan, and a Medigap Plan.  The enrollment process would be greatly simplified if Congress authorized Original Medicare to administer Part D drug benefits, and all Americans would benefit from substantially lower prescription drug costs.

[4] Medicare Initial Enrollment Period.  If you are eligible to enroll in Medicare, when you reach age 65 you have a 7-month window to enroll, known as your Initial Enrollment Period, which includes:  the 3 months before your birthday month, your birthday month, and the 3 months after your birthday month.  The sooner you enroll, the sooner coverage will begin, however the earliest possible date is usually the first day of your birthday month.

During the Initial Enrollment Period you may enroll in Medicare Part A (hospitalization), Part B (physician and outpatient services), and Part D (prescription drug benefits).  You may be enrolled automatically in Part A, which is free, however enrollment in Parts B and D is voluntary and requires payment of monthly premiums.  If you enroll late, after your Initial Enrollment Period, you will be penalized and charged higher premiums each month.  Additionally, if you do not enroll during the Initial Enrollment Period, the next opportunity to enroll is the General Enrollment Period, January 1 – March 31 of each year, with coverage taking effect the following July 1 and higher premiums charged for Parts A, B, and D as a penalty for late enrollment.

Medicare covers only about 80 percent of health care costs and the remaining 20 percent must be paid by the beneficiary as co-insurance or copayments.  A Medigap or Medicare Supplement plan covers the 20% “gap” and can substantially reduce the beneficiary’s’ out-of-pocket expenses for costly medical services, such as hospitalization and skilled nursing facility services. 

New Medicare beneficiaries have a 6-month Medigap Open Enrollment Period beginning in the month when you reach age 65 and are enrolled in Medicare Part B.  During open enrollment you have the right to enroll in any Medigap Plan or Medicare Supplement Plan sold by an insurance company in Texas regardless of preexisting condition.  For the first 6 months that you are enrolled in Medicare Part B, Medigap plans are prohibited from denying coverage or charging higher premiums based on preexisting conditions.  If you apply for a Medigap plan after Open Enrollment, you may be denied coverage or charged higher premiums.