Medicare is a health insurance program for people aged 65 or older. It may also apply to persons under 65 with certain disabilities. The Medicare Open Enrollment begins October 15 and you may have questions about how Open Enrollment affects you and what steps you may need to take. I hope to answer some of those questions. I bring my experience from two careers—one as an orthopedic hand surgeon, the other as a wealth manager here at Plancorp.
What is the Medicare Open Enrollment Period?
The Medicare Open Enrollment Period is the time during which people with Medicare can make new choices and pick plans that work best for them. Each year, Medicare plan costs and coverage typically change. In addition, your health-care needs may have changed over the past year. The Open Enrollment Period is your opportunity to switch Medicare health and prescription drug plans to better suit your needs.
When does the Open Enrollment Period start?
The Medicare Open Enrollment Period begins on October 15 and runs through December 7. Any changes made during Open Enrollment are effective as of January 1, 2019.
During the Open Enrollment Period, you can:
- Join a Medicare Prescription Drug (Part D) Plan
- Switch from one Part D Plan to another Part D Plan
- Drop your Part D coverage altogether
- Switch from Original Medicare to a Medicare Advantage Plan
- Switch from a Medicare Advantage Plan to Original Medicare
- Change from one Medicare Advantage Plan to a different Medicare Advantage Plan
- Change from a Medicare Advantage Plan that offers prescription drug coverage to a Medicare Advantage Plan that doesn't offer prescription drug coverage
- Switch from a Medicare Advantage Plan that doesn't offer prescription drug coverage to a Medicare Advantage Plan that does offer prescription drug coverage
What should you do?
Now is a good time to review your current Medicare plan. As part of the evaluation, you may want to consider several factors. For instance, are you satisfied with the coverage and level of care you're receiving with your current plan? Are your premium costs or out-of-pocket expenses too high? Has your health changed, or do you anticipate needing medical care or treatment?
Open Enrollment Period is the time to determine whether your current plan will cover your treatment and what your potential out-of-pocket costs may be. If your current plan doesn't meet your health-care needs or fit within your budget, you can switch to a plan that may work better for you.
The exercise that will apply to most Medicare beneficiaries is a review of Medicare Part D plans. This should be done annually as the formularies and tier structures of the programs often change, and this year’s plan may not be the most economical next year. For this comparison, the Medicare.gov website (select “Sign Up/ Change Plan”) is actually quite useful and easy to navigate.
By entering your prescription drugs (including the dosage and frequency), your preferred pharmacies (you can select two), and your ZIP code, you can generate a list of all of the Part D plans that are available, along with an estimate of the total cost over the course of the year (including the base plan premium) and consumer rating. If you enter your Social Security number and birthdate, the system will store your drug list, making it easy to update in the future. It is even possible to sign up for a new Part D plan directly from the website. Run the review for each beneficiary separately, and remember that spouses are not required to enroll in the same plan.
What's new in 2019?
Beginning in 2019, Medicare Part D Prescription Drug Plan participants will no longer be exposed to a coverage gap, referred to as the donut hole. Due to changes made by the Bipartisan Budget Act of 2018, Part D participants will see a reduction in their out-of-pocket costs for brand-name drugs from 35% to 25% — a reduction that was originally scheduled to take place in 2020. The gap in coverage for generic drugs will not be closed until 2020. In 2019, Part D participants will pay 37% of the cost of generic drugs.
Also in 2019, the Medicare Advantage Disenrollment Period will be replaced by the Medicare Advantage Open Enrollment Period. The Medicare Advantage Disenrollment Period, which ran from January 1 through February 14, allowed you to drop your Medicare Advantage Plan and return to Original Medicare (Parts A and B) and it allowed you to sign up for a Medicare Part D Prescription Drug Plan. In 2019, a new Medicare Advantage Open Enrollment Period will run annually from January 1 through March 31. If you're enrolled in a Medicare Advantage Plan, you'll have the opportunity to switch to another Medicare Advantage Plan, switch to Original Medicare Parts A and B, sign up for stand-alone Medicare Part D Prescription Drug Plan (if you are covered by Original Medicare), or drop your Medicare Part D Prescription Drug Plan.
Where can you get more information?
Determining what coverage you have now and comparing it to other Medicare plans can be confusing and complicated. Pay attention to notices you receive from Medicare and from your plan and take advantage of help available by calling 1-800-MEDICARE or by visiting the Medicare website, medicare.gov.
If you have questions about your options or steps to take during the Open Enrollment Period, please call your Plancorp Wealth Manager to discuss. We would be happy to put you in touch with a consultant who can guide you through the process.
Plancorp does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.