Maximize Your Benefits and Understand the Changes
Medicare Open Enrollment: Key Dates and Changes
This year’s open enrollment for Medicare runs from Oct. 15 to Dec. 7. Any changes you make to your Medicare plan will begin on Jan. 1, 2024. Eligible Medicare beneficiaries can start receiving benefits once they turn age 65. Those who were already drawing Social Security benefits before that age are automatically enrolled in Original Medicare.
Switching and Comparing: Making the Appropriate Choice
During the open enrollment season, you can switch from Original Medicare to a Medicare Advantage (MA) plan, or vice versa, or even change from one MA plan to another. You can enroll in a new Medicare Advantage plan or Medicare prescription drug plan or drop drug coverage altogether.1
It’s a good idea to use the open enrollment window to compare your current plan to other plans and shop for better benefits or greater value. Even if you’re not interested in making changes, this is a good time to review your current plan as some insurers change their benefits from year to year. But, perhaps, more importantly, comparison shopping enables you to see if there is another plan that offers better health and/or drug coverage at a more affordable price. Recent research found that nearly half of Medicare beneficiaries who shop for a new plan during open enrollment cut their premiums by at least 5%.2
The Importance of Regular Medicare Reviews
We spend a lot of time discussing Social Security benefit strategies, such as when to begin drawing a payout. Because Medicare has a set age of 65, we don’t always take the time necessary to investigate what’s available — particularly after the first year. It’s often a “set and forget” proposition. However, it’s important to consider your Medicare benefits within the full context of your retirement income needs each year, particularly if you continue working past age 65. If you’d like a comprehensive review of how your health and insurance needs work with your retirement income plan, feel free to contact us.
Employer Coverage and Medicare: What to Know
If you are eligible for Medicare but receive health care coverage from an employer, see if your company requires you to enroll in Medicare upon eligibility. If not, you can wait for up to eight months after your employer coverage ends for a Medicare special enrollment period (Jan. 1 to March 31).3
Automatic Enrollment and Premiums: The Details
Also, be aware that not all Americans are automatically enrolled in Medicare at age 65. Specifically, those who did not work 40 quarters (10 years of paying FICA payroll taxes) will not automatically be enrolled. Unless they qualify through a spouse’s work record, they may have to pay a premium of either $259 or $471 (2021 rates) a month for Medicare Part A. This is the hospital insurance plan that is free for those with the requisite earnings history.
Furthermore, note that if you don’t sign up for Medicare when you first become eligible for the program, your monthly premium could potentially increase by up to 10% — which you’ll have to pay for twice the number of years in which you delayed signing up.4
Medicare Part B pays for doctor visits, preventive care, screenings, treatments, and medical equipment. However, it does not cover dental, vision, or hearing care and only pays for procedures determined to be medically necessary. The premium in 2021 started at $148.50 a month (2024 premiums were not published as of this writing).
Medicare Part B and D: Coverage and Costs
Medicare Part D covers prescription drugs. Premiums vary among insurers and typically include an annual deductible (no more than $445 in 2021), as well as an unusual coverage known as the “donut hole.” In other words, in 2022, once a Part D beneficiary spends/receives coverage totaling $4,430, he or she will begin sharing up to 25% of the cost for covered brand-name and generic prescription drugs until spending reaches $7,050. After that, full coverage kicks in again.5
Another option is to skip the alphabet soup and enroll in a comprehensive Medicare Advantage plan. Also known as Medicare Part C, MA combines Medicare Part A and Part B coverage, and in some cases, drug coverage as well. While MA plans generally do not include hospice care like Original Medicare, they typically do offer coverage for things like dental care and eyeglasses.6
1 Raymond James. Aug. 31, 2021. “Making the Most of Medicare’s Open Enrollment Period.” https://www.raymondjames.com/commentary-and-insights/retirement-longevity/2021/08/31/making-the-most-of-medicares-open-enrollment-period. Accessed Sept. 15, 2021.
2 ElderLawAnswers. Sept. 13, 2021. “It’s Medicare Open Enrollment Time: Is Your Plan Still Working for You?” https://www.elderlawanswers.com/its-medicare-open-enrollment-time-is-your-plan-still-working-for-you-18483. Accessed Sept. 15, 2021.
3 Raymond James. Aug. 30, 2021. “Navigating Medicare.” https://www.raymondjames.com/commentary-and-insights/retirement-longevity/2021/08/30/navigating-medicare-infographic. Accessed Sept. 15, 2021.
4 Alessandra Malito. MarketWatch. Sept. 10, 2021. “Avoid the 10%-per-year penalty for not enrolling in Medicare — know these rules.” https://www.marketwatch.com/story/avoid-the-10-per-year-penalty-for-not-enrolling-in-medicare-know-these-rules-11631301599. Accessed Sept. 15, 2021.
5 Andrea King Collier. MarketWatch. Aug. 18, 2021. “The twists, turns and myths of applying for Medicare: How we navigated the enrollment road.” https://www.marketwatch.com/story/the-twists-turns-and-myths-of-applying-for-medicare-how-we-navigated-the-enrollment-road-11628869916. Accessed Sept. 15, 2021.
6 Ibid.
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