The Medicare open enrollment period runs from October 15 through December 7 every year. This is the best time to review your Medicare coverage, relative to your health and your wealth. It’s especially important if you’ve recently received a major health diagnosis, your medications have changed, you’ve moved interstate, or your financial situation is different. Here’s what to think about when evaluating your Medicare coverage during this year’s Medicare open enrollment period.
Your Medicare Coverage
Your Medicare card shows what Medicare plans you’re enrolled in. You’ll have a separate card for any supplemental Medicare coverage.
If you don’t want to make any changes, you don’t need to do anything during Medicare Open enrollment. Your plans should automatically renew.
However, if your Medicare plan is discontinued, you’ll receive a non-renewal notice from your provider and will have to choose a new Medicare plan.
Plan changes made during Medicare open enrollment take effect January 1 of the following year.
Most people sign up for Medicare and then renew the same coverage every year. However, your health changes as you age. Your Medicare coverage may no longer be the most appropriate or economical e.g., you may need more benefits than you’re receiving, or be paying for benefits you don’t need.
Note that some plans require medical underwriting, even if initiated during the open enrollment period. Check with the plan provider before switching.
Your Partner’s Health
If you’re a couple, Medicare premiums are calculated using your joint income. You may also be eligible for Medicare based on your spouse’s work history, or if you’re widowed or divorced (and were married at least 10 years).
However, there are no couples’ rates for Medicare, or joint sign-up. You’ll each sign up separately. This helps ensure your individual healthcare needs are best met with a Medicare plan that’s right for each of you.
Medicare plans offering prescription drug coverage issue a formulary list of drugs that are covered and their out-of-pocket costs. This list can change at any time; a drug that was previously covered may no longer be covered, or may be classified in a higher price tier. This can prove costly. Prepare a list of medications and dosages, then compare your current plan’s formulary list and other Medicare options to get the best value for your prescription drug needs.
Your Medical Providers
The health professionals you need to see and those covered by your plan can also change. The Medicare open enrollment period is an ideal time to confirm that your selected medical providers remain available and in-network (out-of-network providers cost more). You can check if a new healthcare provider accepts Medicare at Medicare’s Physician Compare website.
Cost-effective coverage takes into account factors like your age and health, as well as the cost of premiums and out-of-pocket expenses. For example, Medicare plans with higher deductibles typically yield lower monthly payments. This might prove suitable when you’re younger or in good health, but could prove costly as you age or if you have greater healthcare needs.
Your premiums, deductibles, and copays must also be appropriate, relative to your broader wealth. If your current plan doesn’t fit within your budget, now’s the time to review your options and, if the savings are sufficient, switch to Medicare coverage with lower out-of-pocket expenses.
If you have frequent appointments, regular treatments, or ongoing medication needs, a Medigap policy may be worth the cost to help pay for out-of-pocket expenses like copays.
Your Other Coverage
If you still have access, an employer-sponsored retirement plan might remain your best healthcare option during retirement. Your former employer will undertake due diligence requirements for the plan, and they may even contribute towards the cost.
Your Level Of Satisfaction
You may wish to change your Medicare coverage if you’re dissatisfied with the care or coverage you’re currently getting. You can compare ratings for different plans using the Medicare star rating system.
If you’re moving, you may find cheaper Medicare coverage available in your new location. You may also qualify for a Special Enrollment Period outside of the Medicare open enrollment period.
Even if you’re not planning a move, comparing your Medicare coverage with other local plans can sometimes reveal lower cost options in your area.
One reason why many retirees avoid updating Medicare coverage is to the complexity of the Medicare system. However, help is available:
- The SageVest article, Age 65: Medicare Enrollment, offers a basic overview of the Medicare system.
- The government’s main Medicare website includes the most up-to-date information about Medicare, plus links to other useful resources.
- The State Health Insurance Assistance Program (SHIP) provides state-by-state Medicare assistance.
- Speak toll-free with a Medicare representative at 1-800-MEDICARE to discuss your plan options and change your Medicare coverage.
Taking the time to evaluate your Medicare coverage during the annual Medicare open enrollment period is good for your health and for your wealth, allowing you to evaluate your current Medicare plan, compare different options, and if warranted, select more suitable or more economical coverage.
SageVest Wealth Management is an independent financial advisor in McLean, VA. We offer comprehensive, customized retirement plans, and a Retirement Resources Center, to help you prepare for the future. Please contact us to discuss your financial considerations for retirement.