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With Medicare Open Enrollment fast approaching, many Americans are evaluating their benefit plans for the 2018 calendar year. Whether you’re 65 and about to enroll for the first time or are currently a beneficiary, now is an opportune time to get wise about your Medicare options.
Open Enrollment
Medicare’s Open Enrollment period is October 15 to December 7. During this period, you can make changes to your existing benefits plan. The changes are in effect for the year beginning January 1, 2018. Only beneficiaries can make changes to their benefits plan during this period. If you are eligible for Medicare but have not enrolled, you are supposed to sign up for Part A 90 days prior to the first of the month of your 65th birthday. For example, if your birthday is November 29, you are eligible for Medicare as of November 1st but can sign up as soon as August 1st .
Part A covers hospital care, skilled nursing facility care, nursing home care, hospice care and home health services.
Making Sense of Medicare
Although Medicare gives you the freedom to amend your benefits during the Open Enrollment period, it’s very important to explore all of your options before you reach age 65. Meeting with a Medicare advisor to go over your options can save you significant time and money in the long run. The initial consultation should be done a minimum of 3-4 months prior to your 65th birthday. A Medicare advisor can help you determine whether an Advantage or Supplemental Plan is right for you.
The Medicare Advantage plan is very similar to HMOs, where a primary physician is required and you must adhere to your network for further treatment. While you can be treated for emergencies anywhere, you must turn to your network for further treatment. The Supplemental plan allows you to see any doctor in the country without a referral. This option is especially useful for regular vacationers or snowbirds spending the winter in Florida.
In either case, your Medicare insurance broker will help you determine how to select the plan to best address your healthcare needs. You also have the option of working with a certified financial planner, who can advise you on how the costs will affect your long-term financial planning needs. A CFP™ has a fiduciary standard to act in your best interest at all times. For example, The Harvest Group can help you assess the impact of Medicare on your long-term financial needs through their Harvest Wealth Management for Life™ service.
Important Factors to Consider
According to Rebecca Emerson, an experienced Medicare Specialist and owner of RS Emerson Insurance, one of the biggest factors to consider when choosing a Medicare plan is the amount of the monthly premiums. This is especially the case for couples, where the costs of Medicare B (medical insurance), Supplemental and Prescription plans can be overwhelming. Beneficiaries who opt for the Medicare Advantage Plans may not have to pay monthly premiums, but instead pay at the prevailing rate to visit the doctor.
“Having no premiums makes the co-pays easier to swallow,” Emerson said.
The Medicare Advantage plans have a disenrollment or opt-out period starting January 1 and running through February 14. During this period, beneficiaries can opt out of the Advantage plan and get a standalone prescription drug plan and/or a Supplemental plan.
“Not having a prescription plan results in penalties that will occur and follow you for the rest of your life,” Emerson added.
The penalty is 31 cents per month for every month you don’t have coverage. If a couple had no plan for ten years, that would amount to an additional monthly payment of $37.20 per individual ($74.40 for the couple) for the rest of their lives.
Throughout its 50-year history, Medicare has helped retirees close the gap in healthcare coverage. Unlike Social Security, where you essentially choose your benefits once and are largely done.
Medicare requires much more attention year in and year out. Even after you select your Medicare plans, you need to learn how to use them. This includes evaluating your options regularly, perhaps even yearly, to ensure you have the best coverage.
By working with a Medicare specialist, individuals can learn to maximize their benefits in accordance with their needs, lifestyle and overall financial situation. Medicare Open Enrollment is a great a time to learn about your options whether you implement them next year or at any time in the future.
Laurie E. Ingwersen is a Senior Wealth Management Advisor with The Harvest Group. She is a Certified Financial Planner™ Practitioner, CFP®, a Chartered Retirement Planning Counselor, CRPC®, and a Certified Divorce Financial Analyst, CDFA™.
