As people approach age 65, they should be thinking about their Medicare enrollment choices, including whether to sign up for traditional Medicare or with a Medicare Advantage plan and, if so, which one. But it turns out that some seniors are having these important decisions made for them, often without their knowledge.
Traditional Medicare Alternatives
Before they become eligible for Medicare, many Americans are covered by an employer-sponsored health care plan or a Medicaid plan run by an insurance company. These insurers often also operate Medicare Advantage plans, which are the privately run managed-care alternative to traditional Medicare. Under a little-known "seamless conversion" process authorized by the federal government, insurers began shifting their beneficiaries who were turning 65 to their own Medicare Advantage plan. It only required the insurer to obtain Medicare’s prior approval and send a letter to the beneficiary explaining that the new coverage would remain in effect unless the member opted out within 60 days.
The idea was to preserve continuity for those who want to stay with the same company, but some seniors are unaware that they have been signed up, in part due to the flood of mail they get from insurers around age 65. In 2016, Kaiser Health News reported stories of several Medicare beneficiaries who were shocked to learn they had been enrolled in a Medicare Advantage plan. In one case, a beneficiary had already enrolled in a traditional plan, which caused problems when attempting to pay for a surgical procedure.
In 2018, some changes were made to the seamless conversion process. It was renamed to "default enrollment" and limited to certain types of Medicare Advantage plans called special needs plans designed to provide comprehensive, affordable coverage to dual-eligible Medicare and Medicaid recipients. These same people may qualify for low-income subsidy (LIS) programs like Extra Help, Medicare Savings Programs, or Social Security, which also allows CMS to auto-enroll them in a low-cost prescription drug plan. Again, once notified, there is a 60-day period to opt out or plans can be switched during open enrollment.
Medicare officials have developed procedures for default enrollment requests and implementation with stronger consumer protections in 2024. If you have a Medicaid plan, qualify for LIS, and are nearing age 65, watch out for default enrollment. It's unfortunate insurers that auto-enroll put the responsibility on the insured to cancel the policy if they don't want it. These plans may not be right for your situation. They may use network providers that don't include your preferred doctors or limit the coverage you need. They may also be more expensive than a plan you would have chosen on your own. Learn more about the default enrollment practice.
Insurance companies approved to seamlessly convert their members to their own Medicare Advantage plans in some parts of the country may include Aetna, United Healthcare, and Humana.
A Smooth Transition
Those enrolled in a health plan offered by a Medicare Advantage organization when they become eligible for Medicare must pay attention to notices in the mail regarding conversion and carefully consider whether to opt out of the Medicare Advantage plan that was selected for them.
If you have been auto-enrolled in a Medicare Advantage (Part C) or prescription drug plan (Part D) and aren't sure it suits your needs, you should reach out to a licensed health insurance agent for guidance in choosing a better plan.
If default enrollment has caused problems for you regarding coverage for treatment or care, contact an elder law attorney near you for advice or representation to resolve your issues.