Don't let medicare insurance be confusing. Let us help.

You may have noticed that in the last few months of any year, the American public is bombarded with radio, television and newspaper ads advising people about the “Changes in Medicare” and why you need to be alert during what is known as the “Annual Enrollment” period. Probably the most confusing talk is delivered by the groups telling you that you must review your coverage because you may want to switch your Medicare plans.

The advice offered in these promos is confusing, and actually, the ads are very unfair to you. While the ads may not quite reach an “alarmist” stage, they are crafted to make all Medicare recipients think they must make contact with a Medicare Advantage program or they will lose benefits if they don’t switch to some unknown plan. What they fail to say is that not everybody is on Medicare Advantage, and in fact, only 25% of current Medicare recipients enroll in Medicare Advantage. So while the word “Medicare” is used as a “carrot,” the “stick” is the other 75% of reality—that most people on Medicare do not need to heed this message—because they are not in Medicare Advantage and do not have “annual enrollment periods.”

All of which puts you in a position of wondering what is going on with Medicare!

You are not alone. While technically the ads are structured to discuss Medicare on a broad base, they are misleading, because they insinuate that all people on Medicare need to look into this “urgent” message—when in reality, most of them don’t need to. There is a reason this happens. But, we have to go back to the beginning to simplify things.

When you become eligible for Medicare, essentially you have three choices.

1. You can order and receive a Medicare Supplement policy, which is a guaranteed issue if made within certain time limits of the month in which you turn 65. The Medicare Supplement policy (also known as “Medigap” in government circles) can fill in the “gaps” of Original Medicare—the deductibles and coinsurances.

2. You can enroll in Medicare Advantage, which is offered by several companies, with several choices in the way you wish to receive benefits. But you need to be aware of the fact that Medicare Advantage policies are allowed to change their plans (and most do), or completely abandon them, each year. Abandoning of plans (called an “exit” letter, happened to about a million MA enrollees during 2010. That’s why you are hearing the message to check out new MA plans at the end of the year.

3. You can go “bare” and hope that when your health changes (it will) you have enough ready cash to self-insure and cover the deductibles and coinsurances yourself.

Now, here’s where the confusion sets in. The technical definitions of the Medicare programs are where the problem lies. First, there is what is actually known as “Original Medicare.” This is Medicare in its’ true and original form, which means that there are deductibles and coinsurances in the “Original Medicare” program, and those “gaps” can be covered by a well-chosen Medicare Supplement.

The second way to realize Medicare benefits is to enroll in one of several Medicare Advantage programs, which are offered by “private insurance companies” and therefore, are not a part of “Original Medicare.” Since Medicare Advantage enrollees are not in “Original Medicare,” they need to worry about certain Medicare Advantage deadlines, or changes, or “exiting.”

So, we have two legally different Medicare structures—Original Medicare with a Medicare Supplement that does not change for several years, or Medicare Advantage with any number of private carriers, which will very likely change every year.

But the advertising doesn’t come across that way, and you are led to believe that you must panic to find a new MA service, when, if you are on Original Medicare and a Medicare Supplement, you do not have to worry about any changes or deadlines.

In summary, here are three material facts you can count on.

1. If you have a Medicare Supplement, you can count on it being the very same coverage for several years. In fact, in the past fifteen years, only three changes have been made to Med Supp policies, and two of those were adding new plans—K and L one year, and M and N this year. This came about on June 1 of 2010, when the new series of policies was introduced, and essentially the basic coverages were very similar to policies issued as far back as fifteen years. So, you can count on your Medicare Supplement policy not changing benefits for several years.

2. If you join a Medicare Advantage plan, you can count on the plan changing every year, because Medicare has legally allowed Medicare Advantage companies to do so. Many times, the changes will occur with what are called Medicare Advantage Prescription Drug (MAPD) plans, and the MA company is allowed to change the structure (benefits) of the Prescription Drug portion of the plan. In a nutshell, that is why Medicare enrollees on MA plans or MAPD plans should be concerned about changes in these plans each year. But, if you have a Medicare Supplement plan, you don’t have to be alarmed—there are no special enrollment periods.

3. Stand-Alone Part D (Prescription Drug) plans are another story. Since stand-alone PD plans are allowed to change their coverages and formularies each year, just as MA plans are, you should review your coverages each year. Medicare has simplified the mystery of searching through as many as 40 different plans each year, by making the “Drug Finder” at the Medicare.gov site much easier than even a year ago.