Medicare open enrollment begins October 15 and ends December 7 each year – this is the time for anyone on Medicare to consider whether changes need to be made to their coverage.
But wait, is it necessary? That depends!
Have you moved? Has your health changed? Have your prescriptions changed? Has your financial situation changed? Have you run into problems with finding providers?
If you answered “yes” to any of the above questions, it’s time to investigate whether a change makes sense – and we’re here to help.
Related: 2022 Wrap Up: 7 Year-end Tax Planning Questions to Consider
What is Medicare?
Medicare can seem like an alphabet soup: Parts A and B comprise “traditional” Medicare coverage. Part A is for in-patient care and Part B covers out-patient services. Part D is for prescription drugs. These building blocks of Medicare, however, have deductibles and do not provide 100% coverage. Most people opt to supplement traditional Medicare with a Medigap (Supplement) plan or choose a Medicare Advantage plan.
In all cases, the Part B premium must be paid. If you are receiving social security it is debited from your payment. If you delay social security you must apply and arrange payment.
Note: You have 3 months before and 3 months after the month you turn 65 to enroll for the first time. If you are eligible for Medicare and did not enroll in Medicare B or Part D during this timeframe, there may be penalties. You accrue penalties that will be with you for your lifetime on Medicare Part D, so don’t delay!
Medicare Advantage Plans
Medicare Advantage programs are available through private health insurance companies with networks of local providers. The monthly premiums of these programs can change. As a result, you “pay-as-you-go” – a copay or percentage coinsurance each time you access a medical service.
Advantage plans cover everything that Medicare covers and additionally may offer extra benefits – limited dental, vision, hearing, and even gym memberships. Drug coverage is normally included in the plan. When you compare plans you can enter the drugs you take to find out if they are 100% covered.
Medigap Plans
With Medigap (Supplement) plans you can choose different levels of coverage but, once you pay the monthly premium, there are no copays or deductibles for any medically necessary services that traditional Medicare covers. It’s a “pre-paid” plan and the cost for your health care is known and predictable. Since it doesn’t include Rx coverage, you must add a Part D plan.
Usually, there are no extra benefits such as those offered by Advantage plans. And, while Advantage plans have to accept any applicant; Medigap plans can – after a person’s first six months on Medicare – deny coverage for health reasons to new applicants. While any year you could switch from a Medigap to an Advantage plan, you might not be able to go the opposite direction.
What If You’re Traveling Often?
Advantage plans have contracted networks of local providers. HMO plans limit coverage to their local network; PPO plans allow you to go outside the network for somewhat higher copays. Medigap (Supplement) plans are national rather than local and will cover any provider who accepts Medicare.
For travelers, this may be a better choice for snowbirds or others who expect to spend time out of the area. All Medicare plans, however, will provide emergency coverage, often world-wide. The plan may require you to return to your local network providers to receive follow-up care when you get home. Usually, separate travel insurance is recommended for international travel.
Take Care of Your Health with Clarity
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