A little-known section of the Social Security Act is landing some seniors in hot waters. This year has introduced us to a few cases that show how this clause, created in 1997 as part of the Social Security Act, actually works.

While it seems that many private insurance companies do not use this clause, there are some that do.

In a story covered by PBS, an unnamed woman who turned 65 last year thought she had signed up for basic Medicare (Parts A and B). Along with a Medigap supplemental insurance and a Part D insurance for her prescription drugs.Soon after turning 65, this woman needed two surgeries. Living outside of a major metropolis, the woman needed to travel across a state line for her surgery. After the surgeries were complete, the hospital called to give her bad news. Medicare would not cover her bills because the hospital was outside of the Medicare Advantage plan’s network.

The woman had thought she was enrolled in Original Medicare, not a Medicare Advantage plan. Stuck with a huge bill and no clue how she had a Medicare Advantage plan instead of a Medicare Part A and B plan, she soon found out the following.

How automatic enrollment can confuse just about anyone

Upon a person’s 65th birthday, individuals qualify for Medicare Parts A and B. Part A covers hospital stays. Part B covers outpatient services and visits to the doctor’s office. Most individuals do not pay for Part A, and a premium of under $104.90 is charged for Part B each month.

Before retiring, she had been enrolled in her company’s health insurance plan. Because she did not specifically opt out of her company’s insurance plan when she turned 65, she still belonged to that insurance plan. Even though she naturally assumed that she would be covered by Medicare after her 65th birthday.Insurance companies that use this automatic enrollment clause are required to notify participants beforehand. But turning 65 means that one’s mailbox is daily overflowing with letters from insurance companies. And their notice was likely lost in the deluge.

The Center for Medicare Advocacy heard of the woman’s plight and filed requests to have her signed out of the unwanted insurance policy. The woman eventually had her bills covered by Medicaid.

How to get out of automatic enrollment

The idea that many seniors would want to have their insurance taken care of for them appears well intentioned. But the reality is that the Medicare landscape is confusing at best, and pitfall ridden at worst. At age 65, most seniors know to sign up and are planning to do so. Automatic conversion complicates matters by giving seniors yet another thing they need to do in order to be covered.

What can people do who are turning 65 and don’t want to be automatically enrolled into an insurance policy? First, find out from their employer what insurance plan the company is using. Next, call the insurance company and actively opt out.If an individual finds out too late that they have been signed up for an insurance plan, they can change their coverage during open enrollment. Open enrollment period is from October 15 to December 7.

The other option is to petition Centers for Medicare and Medicaid Services for disenrollment. But they grant this in rare circumstances.Advocates are petitioning their representatives to have this clause changed. And better protections for seniors instituted.

In the meantime, as open enrollment season nears, look for the best Medicare options available in your area. Medicare can be a headache to navigate alone. Free consultations and appointments with licensed agents can help you understand where you are at present. And where you need to go. Research and asking the right questions will make you an educated consumer, and one who is less likely to wake up in a Medicare nightmare.