Let me put it to you plainly - In my almost 10 years in this business I have never met a single person who was confident in their knowledge of Medicare as they transitioned from private/employer-sponsored insurance. This is especially scary, because if you look at the top causes of financial ruin, it's extremely rare to NOT see medical bills topping the charts at #1 in surveys (https://www.cnbc.com/id/100840148). The rules regarding Medicare are confusing enough. The open enrollment period adds another layer of uncertainty for those who help getting their healthcare plan squared away, be it a newly enrolled individual or someone making a plan change. As a special note: the term “open enrollment period” is also used for those signing up for the Affordable Care Act, so be careful not to confuse that period when you mean to sign up for Medicare or change your plan.
The Open Enrollment Period
The Medicare open enrollment period happens yearly between October 15 until December 7. That is the time frame in which you are eligible to change your Medicare coverage, and you also have the option to switch between different Medicare plans during that window. During the open enrollment period you can:
- Join a new Medicare Advantage plan.
- Join a standalone prescription plan.
- Switch from a standard Medicare plan to a Medicare Advantage plan.
- Switch from an Advantage plan to standard Medicare (with a prescription plan, as you’ll be losing the prescription coverage in your Advantage plan).
- Drop your prescription coverage.
Review Your Medical Coverage During Open Enrollment
Every Medicare member should take this opportunity given in the open enrollment period to review your current plan and at least take some time to look at other plans. Some items to look for: Are there other options out there that may be more beneficial? Are you getting the coverage you need? There may be other plans, especially prescription coverage, that pay more benefits and cost less than your current plan.
If you're not too sure what you should be looking for, don't worry, you shouldn’t have to do a lot of research to find out what coverage you have and what other plans are available. You will receive information annually from the government regarding your current plan, whether original Medicare or Advantage. This will notify you of your current coverage and any upcoming changes if there are any.
There are tools available online or by phone to find out about other plans. Medicare offers a convenient tool called the Plan Finder online or you can call 1-800-MEDICARE to find out about new Advantage plans in your area or to join. You can also visit the website of the State Health Insurance Assistance Program to get help in your specific state. Some states have their own website for their program, a call center, social media pages, etc.
You should always talk directly with a representative from the insurance plan you want to pick before you sign up. this includes independent brokers who specialize in Medicare. They are likely to have the most current information.This may go without saying, but make sure to take extra special care to contact your doctors and make sure they accept any new coverage you're exploring before signing up and dropping your old plan. The WORST thing that could happen is that you are no longer covered at your main doctor(s).
You may already be aware that Medicare doesn’t cover all of your medical expenses. Some states offer what's called Medigap coverage, and the same open enrollment period is the time to sign-up if you’re eligible. Medigap coverage will help you pay for items that standard Medicare doesn’t cover, like co-pays or some procedures or deductibles. It could be worth looking into depending on your individual situation, care needs, prescription needs, etc.
Missing the OEP Deadline
If you wanted to make changes to your Medicare program during the open enrollment period, but missed the deadline, unfortunately you will have to wait until the next period to make those changes to your plan. You may be eligible to make changes under the Special Enrollment Period, but only under certain specific circumstances. Some of these circumstances include losing enrollment in an insurance plan that is better than Medicare’s plan or you lose access to an employer-sponsored program. Additional circumstances are listed in the government’s guide to special enrollment situations.
Unexpected medical expenses causes many people to dip deeply into their retirement savings. This can have a huge impact on lifetime retirement income and spending power if not addressed properly. It is extremely beneficial to shop around for the Medicare plan that best meets our needs, especially given that many seniors are living on a fixed income.
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About the author: Kyle A. Davis is a Chartered Financial Consultant® , Chartered Advisor in Philanthropy® , and president of Integrity Financial Group in Orlando, FL. He is a Florida native and an advocate for financial literacy and practical money education. When not assisting clients in planning for retirement, he creates educational videos on financial wellness on his YouTube Channel - https://www.youtube.com/user/financialplannerinfl