When it comes to retirement, there seems to be a never-ending checklist of tasks to complete in order to prepare yourself for this major milestone. You need to save enough to maintain your lifestyle, create a withdrawal strategy, work to minimize your taxes, and claim your Social Security benefits. One other critical action to take is to sign up for Medicare so you have the appropriate amount of healthcare during your golden years.
The problem with Medicare, a federal insurance program designed for people age 65 and older, is that it often seems complicated and confusing. Since there are multiple plans and various enrollment periods, how do you make sense of all the information? Here’s a breakdown of Medicare’s open enrollment period and the options available to you.
When Is Medicare Open Enrollment?
The Medicare open enrollment period happens at the same time every year due to the changes enacted in 2011, starting on October 15th and ending December 7th. For coverage in 2019, open enrollment will run from October 15, 2018, to December 7, 2018. Once December 8th arrives, the enrollment period closes until the following October. During this time, current Medicare users can switch coverage or add or drop parts of their plan.
Open enrollment is not for those who have never signed up for Medicare, unless the open enrollment period also falls during your initial enrollment time, which begins three months before you turn 65 and ends three months after the month you turn 65. But if you only signed up for Medicare Parts A and B during your initial enrollment, open enrollment gives you the opportunity to make changes to your coverage.
What Are My Open Enrollment Options?
Here is an overview of the changes you can make to your Medicare plan during open enrollment:
If you have Parts A and B, you can switch to Medicare Part C (or Medicare Advantage), which is often contracted by outside companies that have an agreement with Medicare. This service includes the coverage of both Plan A and Plan B (Original Medicare), as well as additional services, like prescription drug coverage and private fee-for-service plans.
If you have Medicare Part C, you can switch back to Original Medicare (Parts A and B).
You can reevaluate your Part C plan and switch to a different Medicare Advantage plan.
If you already have Parts A and B, you can join or drop a Part D prescription drug plan. This part of Medicare adds the prescription drug coverage for Original Medicare, private fee-for-service plans, and some Medicare cost plans.
You can switch your Part D prescription drug plan to a different Part D plan.
What Will Medicare Cost?
The amount you will pay for Medicare insurance depends on a variety of factors. While many people choose Plan A, the premium for Plan B is paid automatically and costs about $134 monthly on average. The cost may vary depending on your income, whether or not you’re still working, and when you originally enrolled. Review the factors to get the best coverage.
As an example to demonstrate the differences in cost, if you worked for more than 10 years, your monthly cost for the Plan A premium is $0 because you paid it while you worked. But the costs get higher if you worked for fewer than 10 years, climbing to $422 a month.
The Plan B premium also offers coinsurance after you’ve paid your deductible. This means that for some services, you’ll pay only 20% of the total cost.
How Do I Know Which Plan Is Right For Me?
Plan C and Plan D are known as the options with the most coverage. Financially speaking, they are the most comprehensive plans. If you have either the basic Plan A or Plan B, you can improve your coverage using Medigap. This will help you pay for some of the services that are not covered by the higher coverage plans. Part C is also a prudent choice because it provides for services like dental and hearing health, which are not covered by the basic insurance plans.
As you can see, Medicare is complicated and ever-evolving, so don’t try to handle the intricacies alone. At Beacon Wealth Management, our goal is to help you enjoy more and worry less. We want to help you make informed retirement decisions so you can have added peace of mind.
If you need help evaluating your Medicare options, reviewing your insurance coverage, or just want to ask a couple of questions, we’re here to help. Call us at (304) 626-3900 or email firstname.lastname@example.org for your free 60-minute discovery consultation, and download your free retirement readiness kit today!
John is the founder and owner of Beacon Wealth Management. He specializes in helping entrepreneurs, professional practitioners, and retiree red-zoners overcome the major financial challenges facing affluent families.
As a trusted and friendly financial partner, John delivers a collaborative client experience that empowers and guides people to reach a greater purpose for their wealth and pursue their financial dreams. He understands the multifaceted set of financial worries people face as they become more successful and get within the retirement red zone.
John is well-regarded throughout the business community for his expertise. He has appeared as an expert guest on the The Brian Tracy Show and Hollywood Live with Jack Canfield, is the co-author of the book Masters of Success with Brian Tracy, is the host of the WDTV News 5 segment “Solutions 4 Financial Independence,” and has conducted hundreds of educational events on Retirement and Investment Advisory, Tax Reduction, and Wealth Transfer Planning. These include many Universities, Federal Employee Organizations, Professional Associations, and Large Energy Companies throughout the eastern United States.
With more than two decades of experience, John is credentialed as a Certified Wealth Strategist (CWS), Accredited Investment Fiduciary (AIF), Certified Estate Planner (CEP), Chartered Federal Employee Benefits Consultant (ChFEBC), Professional Plan Consultant (PPC), and Registered Financial Consultant (RFC). He is also a past multi-year member of Ed Slott’s Master Elite IRA Study Group.
A native of Weston, West Virginia, John served in the United States Air Force prior to becoming a Wealth Advisor. Today, he resides with his family in Clarksburg, West Virginia. He and his wife, Lisa, have been married since 2005 and have three amazing children. A family-oriented man, he is passionate about giving back to his community, coaching youth sports, landscaping, architectural design, and playing racquetball.