Medicare Open Enrollment

During the annual Medicare open enrollment period, from October 15 through December 7, you can make many changes in your Medicare coverage. But it’s important to understand the potential impact of making changes—or making no changes at all. First, if you’re in a Traditional Medicare program, you should sign up for a Medicare Part D prescription drug program within six months of enrolling in Medicare to avoid paying a late-enrollment penalty even if you’re not on any prescriptions right now.  If you have Part D coverage already, it’s important to review your plan every year during this time to find out how much the annual premiums are rising or whether the prescription drugs you use now are still covered by the plan at the same costs. If your current plan no longer meets your needs and budget, consider switching to another plan that does. During the open enrollment period you can also switch from Traditional Medicare to an all-inclusive Medicare Advantage plan. While Medicare Advantage plans have lower premiums than Traditional Medicare, they’ll generally only cover physicians in their network and all requests for non-emergency care must be approved before they’ll cover the expenses. And if you have a catastrophic illness, you may end up having to pay up to $7,500 per year in out-of-pocket expenses billed by in-network healthcare providers—and up to $11,000 for out-of-network providers. That’s why it’s critically important to read the fine print and understand what is and isn’t covered by any Medicare Advantage plan and compare it to the costs of your current Traditional Medicare coverage. Fortunately, there are many resources you can turn for help in this complicated decision-making process. If it still seems overwhelming, considering working with a qualified fee-only fiduciary financial planner who can help you understand your various options.   Clarification: In the discussion of the maximum out of pocket costs for Medicare Advantage plans, listeners may have had the impression that Traditional Medicare plans don't have deductibles or co-pays. In fact, Medicare Parts A, B and D do have either deductibles, copays, or both. Unless you add supplemental Medicap coverage to cover these costs, you could end up paying significantly more out-of-pocket each year for critical medical care than with a Medicare Advantage plan, since Traditional Medicare has no annual cost caps.