We're heading into Medicare's annual open enrollment period. Whether you're a new retiree or a current Medicare enrollee who wants to review your coverage, you only have from October 15th through December 7th to buy or change plans. As you review your coverage, there are key considerations in deciding whether you need to make a change. You should also be aware of how to research your options and key considerations on what changes you can make.
Key Questions in Determining If You Have the Right Coverage
To make sure that you're getting the coverage that you need, ask yourself these four important questions about any plans you're considering.
1. Are your doctors covered?
When you sign up for Medicare, you'll automatically be enrolled in Medicare Part A, which covers hospital visits and short, recuperative stays in nursing facilities. There are no premiums to pay for Medicare Part A.
Your doctor visits and other preventative care are covered by Medicare Part B. Medicare Part D covers prescription drugs. You'll pay monthly premiums for these plans based on your retirement income.
Some seniors purchase Medicare Part C, which are Medicare Advantage plans sold by private insurers. Generally, these plans combine Parts A, B, and D with additional coverage for things like vision, hearing, and dental.
Ask your primary care doctor and any specialists you see regularly if they accept original Medicare or Medicare Advantage. If you don't want to switch doctors, this will help you narrow down your options.
2. Are in-network pharmacies close by?
Many insurers have started to offer low-premium Part D policies with preferred pharmacies. Depending on your plan, you might be able to find a nearby pharmacy with lower copays, saving you both time and money.
Medicare enrollees who are leaning towards keeping their current plan should also review their coverage for any changes to drug tiers and copays that could affect the cost of prescriptions. You should receive an annual notice from your current plan near the end of September. If there's too much fine print to digest, contact Medicare, your private insurer, or a health care professional who can help.
3. Do you need flexibility?
Medicare Advantage plans can be less expensive than buying Parts B and D separately. But they can also be much more restrictive. Many Part C plans lock you into HMOs or PPOs. If you decide to move out of state, your Part C plan might not cover you anymore. Those same restrictions could be a problem if you plan on travelling a lot and need medical attention outside of your coverage area.
Frequent travelers should also be aware that traditional Medicare only covers you in the United States. If you have overseas trips on your bucket list, you might want to investigate supplemental insurance policies as discussed below.
4. What is your medical risk tolerance?
Medicare B, C, and D plans use the same calculus as other insurance plans: you'll have to pay higher premiums for better coverage. Is that coverage worth it to you?
If, early in your retirement, you're healthy, you exercise and eat well, and you use the routine check-ups that your coverage provides, a less expensive plan might be sufficient. You could dedicate the money you’re saving on premiums to an emergency savings account that will help you cope with surprises in retirement, like a sudden health issue or a home repair.
Folks with ongoing medical issues and significant prescription drug needs should prepare their retirement budgets for those higher monthly premiums.
And all retirees should plan for the things that Medicare doesn't cover, especially long-term care or in-home nursing that you could need later in retirement.
Outside of the open enrollment period, you're only allowed to make changes to your health care plan for very specific reasons, such as moving from your coverage zone. That's why it's so important that you make time to review your coverage before December 7th.
How to Search For Medicare Plan Options
It shouldn’t take a ton of research to determine what your current coverage is and what options are available for you during this coming enrollment period. You should receive information from the government regarding your current Medicare coverage each year. Even if your coverage hasn’t changed within the last few years, it’s important to still take time to review your current coverage and identify any areas for improvement.
There are tools available online or by phone to learn more about other plans if you’re thinking about switching or changing coverage. Medicare offers a Plan Finder tool online or you can call 1-800-MEDICARE to find out about new Advantage plans in your area. Or, check out the State Health Insurance Assistance Program site to find help in your state.
Can Anyone Make Changes During the Open Enrollment Period?
Medicare’s Open Enrollment Period is only for those who are already existing Medicare beneficiaries.
If you have yet to sign up for Medicare, your period to do so runs between the three months before and three months after you turn 65.1 If you miss this initial enrollment period, you cannot sign up for Medicare during the open enrollment period beginning in October. Instead, you must wait until Medicare’s general enrollment period, which runs from January 1 through March 31.2
Are Changes Made During Open-Enrollment Effective Immediately?
No, the changes you elect to make during Medicare’s open enrollment period will not go into effect until January 1, 2022.
What Changes Can Be Made During Medicare’s Open Enrollment?
During the open enrollment period, you are eligible to change your Medicare coverage, and you also have the option to switch between different Medicare plans. Below are a few coverage options you can choose to add, drop or adjust depending on your needs for the new year.
Medigap is a supplemental insurance policy designed to help cover the costs of certain medical expenses that Medicare doesn’t cover. Your medigap policy may cover expenses such as:
- Medical care when traveling abroad2
Whether you’ve had Medigap coverage in the past or you’d find it beneficial moving forward, you can adjust, add or drop your Medigap coverage during open enrollment.
Medicare Advantage (or Part C) is a type of healthcare plan offered by private companies contracted through Medicare. As mentioned above, it’s designed to combine Part A (hospital insurance) and Part B (medical insurance) as well as, in some instances, offer a prescription drug plan or other additional coverage.
During open enrollment, you can choose to switch back to an original Medicare plan, if you found that Medicare Advantage did not fit your needs. Alternatively, you are also free to switch to a Medicare Advantage plan from an original Medicare plan during this period. Be sure to shop around for different options, as you’ll have several choices from various providers when it comes to choosing a Medicare Advantage plan.
Medicare Part D (Prescription Drug Plan)
If you are utilizing a Medicare Advantage plan, this may not apply to you. But for those who have an original Medicare plan, it’s important to check for changes to your Part D coverage every year. Coverage through your plan can change yearly, and your prescription needs may change as well. Make sure your current plan has your needs covered through the next year. If not, now’s the time to look around for new coverage.
Medical expenses can add up quickly, especially if your current coverage is not tailored to address your needs. Use this time to shop around for any changes that could be beneficial for the upcoming year.
As state laws can vary and what insurance providers offer in the various states can vary, we recommend working with a Medicare and Medigap specialist before making any significant change. If we can help answer any questions or put you in contact with a health care professional, please don't hesitate to get in touch.